Telecom yesterday announced a range of new residential Jetstream DSL plans which offer substantially higher download speeds and “flat-rate” data caps than current offerings. The plans will be available from October 24 and can be resold by ISPs who have signed the Wholesale Services Agreement (WSA) with Telecom.
Customers currently on Jetstream Surf flat-rate will automatically be migrated the Jetstream Plus plan, which throttles to 64kbit/s after the monthly data cap of 10GB has been reached. However, customers can opt for the Swift plan as well, which doesn't throttle the speed but costs 2c per megabytes in excess data charges after 10GB.
The telco is also scrapping the two residential full-speed plans, Jetstream 500 and 1000, although existing users can choose to stay on the plans if they wish.
However, ISPs planning on selling the Unbundled Bitstream Service (UBS) DSL connections, which Telecom is required to offer in leiu of unbundling the local loop, fear the new plans mean they won’t be able to compete with Telecom Xtra for residential customers.
"This move makes the unbundled bitstream plans that ISPs have available look second-rate compared to the service now offered directly by Telecom," says Inspire Net's managing director, James Watts. "It will be very hard to compete with Xtra using UBS when their retail product is faster and cheaper, and not available under UBS."
Maxnet network manager Alastair Johnson says his company is “not impressed” and says they didn’t receive any warning about the new plans. Johnson is concerned that Telecom’s new plans will hit the uptake of Maxnet’s UBS offerings. “Why would anyone pay $50 a month for 256/128kbit/s DSL when they can get [2Mbit/s downstream and 192kbit/s upstream] for just $9.95 more?”
The general manager of Maxnet, Brett Herkt, says that while the new plans are great news for end users, third-party ISPs risk being squeezed out of the residential internet access market completely.
“Now that the interim UBS is delivered as layer 3 service, there is no technical reason why Telecom couldn’t offer ISPs the same plans on a wholesale basis.” Herkt adds.
Telecom is "pretty excited" about the new plans, says Chris Thompson, the head of Telecom Xtra. He says the plans will be available through other ISPs. Although the wholesale margin for the plans is around 23 cents per month, Thompson says ISPs will receive a $10 discount and commission on top of being able to set the monthly ISP fee themselves.
Asked how the new plans will affect UBS, Thompson says ISPs won't now be restricted by UBS' performance limits and rollout schedule. “We have announced higher speed UBS services will be available in the future, and making these plans available at resale means that ISPs can offer higher speed products without being tied to UBS delivery timelines.”
Thompson says yesterday’s announcement gives ISPs 30 days to prepare for the new plans.
TUANZ welcomed the plans as a "major catch-up for New Zealand" but expressed concern at the fate of UBS. "This will take New Zealand's broadband speed from one of the slowest in the Asia–Pacific region to one of the faster," chief executive Ernie Newman said in a statement.
"However, TUANZ is concerned that at the time Telecom is announcing this change it has failed to deliver on its commitment to deliver an Unbundled Bitstream Service to allow its competitors access to this service as required by the Commerce Commission. The combination of these two circumstances will result in Telecom gaining market share in a way that appears very unfair and in conflict with principles of a competitive market," Newman said.
"The best outcome would be for the Commerce Commission to demand that Telecom accelerates the delivery of its new service to coincide with the delivery of these new higher speed services."
Computerworld asked Communications Minister Paul Swain’s office to comment on the new plans and their implication for UBS, but didn’t receive a reply by deadline.
New Telecom DSL plans: higher speeds and flat-rate
|Monthly data allowance (GB)||Monthly price with Telecom tolls||Monthly price without Telecom tolls||Excess data charge|
|Nil; throttle to 64kbit/s after cap is exceeded|