Three of a kind: Xtra goes flat-rate

It's official - the country's three largest ISPs will all be offering flat-rate access. With Xtra's announcement yesterday of its $39.95 monthly plan, the most intriguing question is how well the networks of the formerly time-based providers, Xtra and Clear Net, will hold up under the new model. And the next is how the country's small ISPs will fare in the face of the all-you-can-eat blitz from the big players.

It's official – the country's three largest ISPs will all be offering flat-rate access.

With Xtra's announcement yesterday of its $39.95 flat-rate plan, the most intriguing question is how well the networks of the formerly time-based providers, Xtra and Clear Net, will hold up under the new model.

And the next is how the country's small ISPs will fare in the face of the all-you-can-eat blitz from the big players.

Clear Net signalled its intention to go flat-rate on Tuesday, emphasising a $2 million network upgrade to support the anticipated surge in traffic, but will not announce pricing until the service launches on June 8. Xtra's flat rate of $39.95 including GST undercuts flat-rate pioneer Ihug's $45 a month, but Ihug director Tim Wood was striking a relaxed pose yesterday afternoon.

"We'll wait and see what Clear do, and perhaps make a price announcement around that time," said Wood. "I'm not going to start leaping around. It was inevitable that this was going to happen, especially since our deal with Sky.

"But I think Clear and Xtra might have bitten off more than they can chew. I hope their network capacity is five times what they reckon they should have, because flat-rate is a different ballgame.

"That's why I'm not rushing to make any moves. We will match them when we get round to it, but I don't think our customers will be moving services to save five dollars. There are reasons why they're with us and not with Xtra in the first place."

Ihug has already this week doubled the hours allowed under its $30 Sapphire plan to 60 a month, and dropped its sign-up fee from $59 to $39.

The new Xtra plan – being promoted with the slogan "Stay on the Internet longer" - comes with a number of conditions. Customers "may" be disconnected after more than 12 continuous hours online - compared to the "three hour kick" applied by Ihug when dial-in capacity is at 90% or more.

Customers are also not allowed to run servers, use static IP addresses or "provide any public information service" while connected on the flat-rate plan. Additional users can, however, dial in on the same ID and be charge at NZPlan hourly rates.

Xtra has also introduced new Advance 10 (10 hours for $15 a month) and Advance 20 (20 hours for $25) plans.

A flat-rate ISDN plan has also be offered, but the $299 monthly rate suggests Xtra does not yet seek to be competitive at anything other than dial-up speeds.

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