"It is as far as I know for the first time that Telstra buys a local ISP," BuddeComm analyst Paul Budde told Computerworld Australia. "It is a bit puzzling as it is hard to see what Adam Internet actually brings to the party other than its customers."

"In the overall scheme this of course makes total sense as telecoms has become a commodity, margins are thin and you can only survive on volumes, so in the end there will only be a handful of ISPs/telcos in the country," Budde said. "If Internode was too small to survive on its own Adam Internet most certainly is too."

"But perhaps far more interesting is the fact that Telstra has become active in industry consolidation," he added.

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