.au domain prices drop as war begins

The price war has seen a gradual drop in retail prices for a 2-year licence of com.au and net.au domains over the last two years,. While premium full service registrar MelbourneIT is continuing to charge AU$140, new entrant Domain Central's is now offering AU$49 for the same .au domain service -- cheaper than the current lowest reseller price from Net Registry of AU$49.95.

Domain Central's operations officer, George Pongas said the company was aiming to "encourage people to secure their IP and market position by registering as many domains relating to their business as possible".

However, Domain Central's price comes with limited support for customers to e-mail only so the company can "lower the operation overheads".

"Phone support is very expensive and most domain registrants rarely require anything after the initial registration. So why should the majority pay for the needs of a select few? At the end of the day, people can buy a domain through us and if they are not happy with the service, they can transfer their domain free of charge to a registrar that offers phone support. If a customer needs to be contacted, we don't hesitate to call them but we don't have inbound calls," Pongas said.

Pongas added that Domain Central's volume has doubled and almost tripled in number just a week after they started promoting the new price. So far, they have not received complaints regarding their lack of phone support and Pongas expects that customers will be satisfied with just relying on e-mail support.

Pongas said he expects other domain registrars will try and beat the AU$49 offer. However, he assured they won't hesitate to drop their price again to compete with other registrars even if it means just breaking even.

A Domain Central rival, Bottle Domains, said their company's price beating policy will see them competing with lower prices in the market. Chief executive officer Nicholas Bolton said customers only need to call their office quoting another registrar's price and they will beat it.

"We are a full service registrar, however our company's price-beating policy -- under which we agree to beat the registration cost of other registrars -- means our customers are protected both with service and price," he said.

Bolton believes that the current low prices in the market, like that of Domain Central's, is "not sustainable" but believes that ultimately prices from other registrars will keep dropping.

.au domain administration (auDA) chief executive officer Chris Disspain said his organisation was very pleased with the reduced prices for business domains and the increase of choices for customers. However, he said that auDA will leave the business model and price war to the registrars and that their only concern is "to make sure they do their job properly."

"Whatever price they are charging is not relevant to us," he said.

Chris Dobbyn, MelbourneIT general manager of products and marketing, also believes that a cheaper domain price is "unsustainable".

"There certainly are cheaper providers out there but from our point of view, the main thing for customers is that if they want long term commitment they should partner with someone they can trust and who will be around for a long time.

"With AU$49 there isn't a lot of margin in that, it is hard to imagine making a lot of money in that and you need to make money in this industry. You need to invest in technology, services, hardware and software. With only AU$49, it will be very hard to get a sustainable business," Dobbyn said.

He added that businesses need more than just domain names to have a presence online and that customers should not be focusing only on the price and component product but more on the bundle being offered by the registrar.

Dobbyn said he is confident of MelbourneIT's position in the market even with the entry of other players.

"I am pretty confident that as long as we are providing value for money across our bundle of services, we will get good word of mouth. I think as long as we continue to do that, customers will stay with MelbourneIT. That's the key to our strategy, it's about long term sustainable future," he said.