Ihug considers suing Telecom for lost revenue

The Internet Group (Ihug) is considering legal action against Telecom after calling a halt to new registrations outside Auckland because of what is says are delays in delivery of additional dial-in lines and frame relay capacity. Ihug director Tim Wood says upgrades to the company's national bandwidth with Telecom subsidiary Netway are more than a month late. The moratorium is the third declared by Ihug in a year.

The Internet Group (Ihug) is considering legal action against Telecom after calling a halt to new registrations outside Auckland because of what it says are delays in delivery of additional dial-in lines and frame relay capacity

Ihug director Tim Wood says upgrades to the company's national bandwidth with Telecom subsidiary Netway are more than a month late.

"And the phone lines are even further behind. I haven't added any phone lines since early December. It's only the fact that we had such a good user-to-modem ratio then that's let us get this far. In Auckland, we've gone from 6-1 to more than 9-1 while we've waited."

Wood says the moratorium should be over in about a week, "so this while one isn't as bad as the six or seven week week period last July and August, it comes at a time when we have committed to large amounts of advertising expenditure.

Ihug's business model is strongly based around growth, and Wood claims delays in the past 12 months have cost the company $200,000 in "initial earnings", with unrealised income from lost customers running close to $500,000.

Wood says he has had preliminary talks with with his solictor on the issue of legal action "and it's definitely something we're looking at, because our service contract agreement has been broken - right back to the single-number hunting problem and the lack of lines."

Wood says he is more optimistic about future improvement in service from Telecom and is pleased with the efforts of Telecom's marketing manager for computer communications, Graham Rowe, who assumed responsibility for the ISP sector late last year.

"Graham has made a difference - but a lot of what he's doing should have been done a while ago."

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