Telcos slug it out over new discount offer

Yet another Telecom Wholesale discount comes with strings attached

Telecom has launched yet another wholesale discount offer to the market, but rivals claim the deal is anti-competitive.

The telco is offering wholesale customers a phone line and broadband discount deal which covers Hamilton, Tauranga, Rotorua, Palmerston North and the Hibiscus Coast at a discount to prices set by the Commerce Commission.

The offer, released last week to wholesale customers for comment, is the third wholesale discount offer from the company.

But like previous deals, it has a catch.

The telcos must serve at least 90 per cent of their customers using Telecom Wholesale products, rather than putting their own equipment into Telecom's exchanges, a process known as unbundling.

The regional offer worries wholesale customer Orcon, which has invested significant amounts in providing unbundled lines in Auckland and has just begun to offer them in Wellington.

Orcon chief executive Scott Bartlett says Telecom Wholesale is marketing the regional offer as a "volume discount'' but only to telcos with fewer land-line customers than Orcon, and those that have significant wireless base customers such as Woosh.

"The discounts are about loyalty, not volume.''

Telecom launched an Auckland-only wholesale loyalty discount broadband and phone line offer in March and then extended a broadband offer to wholesale customers for the rest of the country.

Vodafone's head of regulatory fixed line, David Diprose, said the Auckland-only offer was anti-competitive and effectively shut Vodafone out.

The Commerce Commission is deciding whether to launch a formal Commerce Act investigation into the first two offers, and a decision is expected soon.

Telecom's Independent Oversight Group is also considering whether the loyalty discounts are compatible with the company's undertakings on operational separation, but there was no reply by press time to The Independent's queries  about when that decision is likely, or the process involved.

TelstraClear spokesman Chris Mirams says Telecom's latest regional offer still has the same ''universally recognised'' challenges as its previous wholesale broadband offers.

"We are really waiting for the IOG and Commerce Commission to come out with its decision, about what action, if any, we can really take,'' says Mirams.

Telecom Wholesale spokesman Nicole Walker says: ''We are being competitive, and making sure offers are out in the market place.

"If [customers with unbundled lines] wanted to take up our Auckland only offer, we'd be more than happy for them to do that.''

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