Telstra New Zealand will "take the matter further" on last week's High Court decision on new re-billing arrangements, which went in Telecom's favour.
The decision by Justice Williams allows Telecom to refuse new re-billing arrangements for Telstra (and other carriers') customers. Telstra managing director Peter Williamson says Telstra was surprised at the decision and "we'll definitely take this further". The development, he says, "attacks competition and consumer choice".
The re-billing issue, "is only one of a range of issues with Telecom that affect every player in the market. I'm horrified for New Zealand - this type of decision in ruining the competitiveness of New Zealand internationally."
Re-billing allows Telstra customers (and those of other carriers) to continue using some Telecom services but they only receive one bill. Their Telecom accounts are forwarded to Telstra who amalgamate the accounts. Telstra argued that re-billing is vital to its business locally which has been built around providing integrated services to business customers.
Telecom will honour existing "letters of authority" until they expire, usually within a year, but the court would not grant an interim injunction forcing it to honour new ones.
"Although Telecom's retreat from re-billing may make Telstra's business more difficult, and may make management of their telecommunications less convenient for . a relatively modest proportion of [its] corporate customers, there does not appear to be anything to debar Telstra or those customers from offering or receiving [telecommunications management services] with or without re-billing," said Justice Williams.
The service was the result of an informal agreement by middle management, he said, and had been in place for a relatively short period of time. In a competitive marketplace it was hard to stigmatise its withdrawal as anti-competitive.
However, TUANZ chief executive Ernie Newman says the decision shows New Zealand has "lost the plot" in its telecommunications deregulation.
In a press release, he said the decision was a step backwards for users and "one more episode in a pattern where Telecom has used its monopoly on local phone services to eliminate competition".
Williamson says Telstra has tried to resolve the issue through commercial negotiation - without success.
"After providing re-billing since 1996, Telecom's behaviour changed dramatically in March of this year. Since then it has not had a genuine interest in reaching a commercial solution."
Telecom external relations manager Clive Litt says the judgement is a positive one for Telecom. "Our position has always been that Telecom was making a straightforward commercial decision in ceasing re-billing and the judge's comments support that view."