InternetNZ questions Telecom's retail tactics

InternetNZ questions Telecom's retail tactics

Media Release
21 September 2006

InternetNZ (The Internet Society of New Zealand) is concerned at the competitive implications in media reports this week of Telecom's broadband pricing tactics.

The media reports suggest Telecom's planned unconstrained retail broadband pricing plans will not be able to be matched by ISPs through UBS without making a significant loss on the services, as UBS charges will be too high relative to the Xtra broadband retail charges.

With ISPs dependent upon an historically based wholesale price in a market where retail broadband prices are decreasing Telecom has an advantage in attracting new broadband customers, and in attracting customers off other ISPs, through tactics of lowering pricing.

“If the reports are true, this would appear to be counter to the Government-led process under way to ensure a more competitive market for broadband,” says InternetNZ executive director Keith Davidson.

“If Telecom is taking advantage of this situation this would not be in keeping with Telecom executive's comments that they 'Get it' and are now aligned with the Government's direction. It would also bring into question Telecom's seriousness towards providing “Equivalence of Inputs” to wholesale customers.”

InternetNZ has proposed that both Telecom's network and wholesale divisions be operationally separated so that all ISPs, including Xtra, are transparently treated on an equal basis.

ENDS

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