Toll cuts ‘illustrate emergence of competitive telecomms market’

Telecom's decision to drop international toll rates by up to 60% is being hailed as a sign that competition is slowly but surely opening up the telecommunications market. Steve Stanford, managing director of international call carrier WorldXchange, says that the latest round of price reductions is encouraging, but he wonders how Telecom has got away with charging so much for so long.

Telecom’s decision to drop international toll rates by up to 60% is being hailed as a sign that competition is slowly but surely opening up the telecommunications market.

Steve Stanford, managing director of international call carrier WorldXchange, says that the latest round of price reductions is encouraging, but he wonders how Telecom has got away with charging so much for so long.

“It seems that to offer these discounts Telecom has had to put up the price of local business calls,” says Stanford.

WorldXChange has an interconnection agreement with Tele-com for its international services and is currently negotiating an interconnection agreement for local services.

Stanford says the agreement should be completed by March. While he won’t be specific on prices and services to be offered, WorldX-Change will be offering “innovative rates for local customers”.

Grant Forsyth, of TUANZ, shares the view that the cuts are a sign of competition. “TUANZ has recently com-pleted a survey which, at the time it was undertaken, showed that Telecom was by far the most expensive local carrier. These new prices are a response to competition and are in fact a demonstration of competition working.”

The progress made in the international toll market is in stark contrast to business charges going up 27% in the face of no competition.

“The most disturbing thing is that what Telecom is offering with one hand it is taking away with the other,” says Forsyth.

“The people who are going to be hit hardest in all of this are the small businesses which don’t have a high international toll requirement. But overall the new rates are a good thing and show that the market is at work.”

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