Ihug offers unlimited broadband ... in Oz

Ihug is offering an unlimited traffic DSL connection for only $80 a month, however there is one catch: you have to live in Australia to use it.

Ihug is offering an unlimited traffic DSL connection for only $80 a month, however there is one catch: you have to live in Australia to use it.

Ihug has announced new pricing on its Ultra broadband service there that includes three uncapped levels of service: 256Kbit/s download speed for $A80, 512Kbit/s for $A100 and 1500 Kbit/s for $A220. A capped version of each service is also on offer, with excess traffic charges costing 11 cents per megabyte.

Ihug CEO Martin Wylie says the wholesale market in New Zealand does not allow Ihug to offer such a service in this country.

"We'd kill to offer it here."

Wylie says the wholesale regime in New Zealand is really nothing more than a reselling of Telecom's DSL product, while in Australia the regulator has called for the complete unbundling of the local loop.

Ihug is buying its Australian DSL service from a wholesale company called Comindico which is placing its own DSLAMs in Telstra's exchanges. According to Ihug Australia's marketing and sales manager Ben Foote that allows Ihug to buy a product off Comindico that Telstra itself might not necessarily offer.

"There are different levels of wholesale over here - from the basic model where you're just re-billing Telstra's service right through to the likes of Comindico which is putting its own gear into the network."

Ihug, which is the 8th largest ISP in Australia, is also reselling the service to smaller ISPs. There are about 700 ISPs in Australia and Foote says there is a great deal of potential in the wholesaling of the product.

"We already wholesale the Ultra satellite product to other ISPs and the two work well together to extend an ISPs broadband reach."

Wylie says Ihug only offers DSL in New Zealand to keep the customer happy - it makes no money from the transaction.

"At the moment the wholesaling regime doesn't really work to anything like the extent it does in Australia. Here we're just offering it as a service to hang on to the customer. Economically it doesn't make a lot of sense for us and that's why the market really isn't growing."

Wylie says he is eager to find out what plans Telecom has for the DSL product family but that Telecom is not informing the ISPs of its planned changes to DSL.

"We've been kept in the dark about it all. It's incredibly frustrating - we just don't know what's coming up. We can't plan, we can't organise marketing."

Telecom has said it will re-launch its DSL product suite in the middle of the year.

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