Telecom could have dragged its heels: Gattung

All is going well ahead of changes, despite 'patently untrue' industry claims and allegations in media

Telecom's chief executive Theresa Gattung announced her own industry stocktake at an address to the Telecommunications Users' Association of New Zealand (TUANZ) in Wellington yesterday, pointing to a large number of developments since the government issued its appraisal of the situation six months ago.

"We could have dragged our heels," Gattung says stating that it would've been easy for Telecom to wait for the new telecommunications legislation to pass and for the Commerce Commission to develop a reference offer for unbundling and to drive all the micro detail.

However, Gattung says Telecom hasn't stalled the process, but instead anticipated change and shown commitment to embracing the changes.

Telecom's wholesale business, Gattung says, can achive one million residential and broadband connections by 2010. This, she says, will earn Telecom revenues of over $1 billion within five years.

Wholesale was the main focus of Gattung's TUANZ address, and she defended Telecom against accusations that it is squeezing competitors through the pricing of Xtra's entry-level unconstrained plans.

Gattung points out that the price for the Regulated Unbundled Bitstream Service (RUBS) is set by the Telecommunications Commissioner and not Telecom. The price is calculated by Telecom as a weighted average across all plans with 128kbit/s upstream as per the Commission's determined method.

The Commerce Commission recently approved Telecom's review of the RUBS pricing, which sets it at $27.76 compared to $28.05 a month as set out in its June 2006 determination.

With GST, the cost of RUBS is $31.23 a month, which compares to Xtra's entry-level retail plan charge of $29.95.

The Xtra entry-level plan has been at that price for nine months, Gattung says, and adds that customers get more for their money now. She also says that before the unconstrained plans were launched, some ISPs priced their products aggressively, below the wholesale cost.

Stating that Telecom is competing, but doing so fairly, the company wants the broadband market to grow. This Gattung says, is the same goal that the government and Telecom's competitors has, and it is what TUANZ wanted.

While talking up Telecom's efforts over the past six months, Gattung took a swipe at the incumbent's detractors. Telecom has had to "bite our tongues" she says when some in the industry make "patently untrue" claims and allegations that "get a run" in the media. However, Gattung didn't give any specifics about these clains and allegations.

Telecom expects to be judged on its actions, Gattung concluded, and says the next six months will see much more progress. This especially as the new legislation is passed and new services such as unbundled local loop and naked DSL come into fruition.

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