Saturn expansion big challenge to Telecom strategy

Telecom faces a conundrum as cable company Saturn prepares to roll out on Wellington's Kapiti Coast. If it doesn't follow Saturn in offering toll-free calling between Kapiti and Wellington, it is likely to lose a substantial amount of business. If it does, then other districts around New Zealand within a similar radius of a metropolitan centre are likely to seek the same treatment: for example, Whangaparaoa and Auckland.

Cable company Saturn's rollout into the Kapiti Coast area of Wellington will be a real test of Telecom's competitive stance.

Currently calls between Kapiti and Wellington are toll charged — long a bone of contention with residents. However, Saturn is offering a call-free service.

When it launched its telephone service in parts of the Hutt Valley, it pitched its prices below those of Telecom, which responded by lowering its rates.

Telecom seems to face a conundrum. If it doesn't offer toll-free calling between Kapiti and Wellington, it is likely to lose a substantial amount of business. If it does, then other districts around New Zealand within a similar radius of a metropolitan centre are likely to seek the same treatment: for example, Whangaparaoa and Auckland.

A Telecom spokeswoman says the telco will look at what Saturn is offering.

Saturn spokesman Sean Wynne says that, after the initial launch to 100 Raumati homes last week — "to test our processes" — the rollout will move "into full steam" this week.

Full service will be provided to all of the Paraparaumu region by the end of the year, and to Waikanae a few weeks after that. A remote switching centre has been built on Kapiti Road.

"We'd like to go to Otaki but there are some resource management issues to resolved first," Wynne says.

Saturn will charge $29.95 a month for its Kapiti service, and offer a $10 monthly discount for those customers who also take its cable television service. For the 2000 customers who already have cable, the tele-phone will cost $19.95 a month.

Saturn has also been busy in the northern suburbs of Wellington. It's activated Newlands, Johnsonville and Khandallah. Ngaio, Wadestown and Karori are going through final proofing. "We're very pleased with the uptake. We are sitting on something like 20% of the market we can service. When we turn on Karori and the other suburbs, that is going to be a big lift for us."

Saturn also plans to launch a range of Internet products over the next few months.

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