Users slam Telecom over broadband pricing

Broadband users are less than impressed with Telecom's attitude to the glacial take-up rate of its DSL offering.

Broadband users are less than impressed with Telecom's attitude to the glacial take-up rate of its DSL offering.

Telecom claims only 2% of the potential users of its JetStream DSL service have signed on in just over two years -- roughly 21,000 users.

Telecommunications Users Association chief executive Ernie Newman says the pricing structure is a definite inhibiting factor for most users. "Telecom's JetStream has been ranked by the OECD as the most expensive broadband service in the OECD world, and although they have rebutted that, there are elements of the charging structure that are a deterrent to users."

Newman says if Telecom dropped the price by a third it would double the uptake immediately and the company would quadruple its profit.

Telecom has two problems, says Newman, a marketing problem and a pricing problem.

"Within Telecom there's a certain ambivalence about bringing broadband to the masses at this stage. They seem bemused by the broadband phenomenon and have yet to develop a clear vision of where to go with it." Newman says that until Telecom's hierarchy see broadband as an opportunity rather than a problem it won't be developed in New Zealand.

"It's a tragedy for them as well as New Zealand."

Telecom refuses to comment directly on the allegations, but in a written statement rejects Newman's interpretation of the OECD report's findings.

"The OECD report identifies a number of areas where New Zealand can be very proud of its broadband achievements." These areas apparently include lowest cost DSL service and speediest residential DSL service.

Newman says the problem with the OECD draft report is that Telecom's pricing structure is quite different to the other countries' structures and that makes it difficult to compare "apples with apples".

Telecom spokeswoman Mary Parker says the rate of take-up of DSL is increasing rapidly. Parker claims the growth averages 443% over the last year and that in recent months this rate has accelerated.

Users commenting on the DSL mailing list claim the slow take-up rate is due to Telecom's pricing structure, but also from a lack of services that make the most use out of broadband.

"All broadband suppliers suffer from too few products," says one posting. "These are not more traffic/price products but content and service products. Most use it for the internet but find that apart from downloads and faster browsing there's no real need. For Telecom to get the 400,000 DSL users they have to offer what Sky offers its 400,000 -- content and services."

Newman says broadband is the first major technology to have a profound social impact since government privatised most of its industries.

"If it were still under the Post Office they would say 'here's some more cash, make sure everyone gets a look at it' but they can't do that these days. There's a real tension between public policy imperatives and commercial pressure."

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