Customers will benefit, but small regional ISPs seem certain to feel the squeeze from Xtra's new pricing plan - which fixes access charges at $2.50 an hour anywhere in the country.
NZPlan, which was announced earlier today, sees Xtra become the second customer of Telecom's IPNet access network, allowing it to provide a single nationwide number (087-303030) to replace both 0800 and local dial-in services. The first IPNet customer was Ellcon, which is providing Internet services in support of the Ellcon Web set-top box it sells through retail outlets.
Customers not within a local call of an Xtra point of presence (POP) have until now been paying $4.95 an hour for 0800 access. Research company IDC said late last year that small ISPs in those regions were able to compete with Xtra's higher 0800 rate, and that an expected cull of small ISPs had not happened. Now that they have to match Xtra's city rate, the independent ISPs may struggle to survive.
Xtra marketing manager Ian Scherger maintains that "the same questions were asked when we first came into the market. There were 33 ISPs then, and there are more than 50 now, and I think there'll always be a place for the smaller companies."
Scherger says Xtra has just passed the 90,000 customer mark and is aiming for six figures by the end of the financial year on March 31. Marketing campaigns based around NZPlan and a number of other products due for announcement in the next few weeks should help boost the numbers.