Xtra is expecting that about 20% of its customer base will be keen to take up its new Advance20 pricing scheme.
The scheme, announced to customers this week in an email from Xtra marketing manager Ian Scherger, is the most significant on price by a major ISP this year. It comes in the form many commentators expected - a discounted monthly rate for blocks of time online.
Whereas standard Xtra accounts carry no standing charge, customers can now choose to pay $35 per month for 20 hours' access - equivalent to $1.75 per hour. Time in excess of the 20 hours will be charged at the standard rates of $2.50/hour for local access and $4.95 for 0800 access.
Xtra chief Bob Smith says the ISP chose Christmas to make the offer "because the holiday season is when many of our customers have time to surf," but the plan may have been in the works since before the recent home computer expo, where Clear Net was widely expected to make a price announcement - but didn't.
The plan is beneficial to Xtra customers who spend more than 14 hours a month online - or half that for 0800 customers. The small regional providers who have been able stay in business by undercutting the $4.95 0800 rates charged by Xtra, Clear Net and others may be the hardest hit by the move.
Xtra spokeswoman Robyn Bern says the new price plan was offered only after considerable market research.
"The majority of our customers are at the lower end of the usage scale," she says. "And that's probably because of price sensitivity. We're looking at perhaps 20% of them who are perfectly targeted for this sort of pricing plan."