Telecom offers ISPs cash for broadband customers

$158 per customer proposed

Telecom is offering ISPs a cash incentive in an effort to meet its end-of-year broadband deadline.

For each new customer an ISP acquires, Telecom will pay $158 — enough to offer a free connection and modem, says Telecom’s head of wholesale commercial, Chris Dyhrberg.

Dyhrberg confirms the telco is using the incentive to encourage ISPs to sell broadband connections to meet Telecom’s targets. “Some people might see it that way, and to be quite honest, in a way it is a bribe and we’re quite happy to admit that.”

Dyhrberg says Telecom has offered two other incentives to ISPs to try to boost broadband uptake in the past year. “In April we introduced an $88 plus GST offer for each new installation, which wasn’t too successful, to be honest. But we learned a lot about what our customers are looking for.”

In July, Telecom relaunched the scheme with new targets on customer numbers that set minimum sales targets. “That’s worked better so we’re hopeful about the new offer,” Dyhrberg says.

ISPs that take Telecom up on the offer will be able to use the cash however they see fit — whether it’s for a free modem and installation, a cash back offer or simply to bank it, he says.

“We set ourselves some aggressive targets [for broadband uptake] and as you know, there were some teething troubles initially that meant we couldn’t deliver the service we wanted. That’s behind us now so it’s the right time to offer such a deal.”

The offer is available for September and October and applies to new users, not to users moving from another ISP.

Telecom has set itself two targets by the end of December: to reach 250,000 residential broadband customers and have 30% of those delivered via its wholesale regime. While the company looks likely to exceed the 250,000 number, its wholesale figures are not so rosy.

The Government and the Telecommunications Commissioner, Douglas Webb, say they are monitoring the broadband uptake numbers.

Communications Minister David Cunliffe has said he is unhappy with the price of broadband in New Zealand and with Telecom’s attitude to the regulatory regime and that he will be watching the broadband uptake closely in the months ahead.

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