Voyager has pulled out of the 0800 Internet access business which it helped pioneer--blaming unfair pricing from Telecom Xtra.
Voyager head John O'Hara says Telecom has been told to cut off its 0800 services--which only months ago carried all Voyager's business--because we "can not compete in price with Xtra, so are withdrawing to leave Telecom as the monopoly provider.
"As the inventor of the 0800 Internet access market in New Zealand, it is a bitter pill for us and our customers to have to swallow. We are being forced out of the market by our own major supplier".
Voyager has been losing $1 an hour on its $4.95 an hour 0800 access service for the past 12 weeks and O'Hara claims "while conceding they could reduce our prices, Telecom has steadfastly refused to do so".
He says that Xtra, which charges the same for the service--and should in theory be charged the same fee for 0800 use by its parent company--is losing more than $1 million a month on 0800 access.
O'Hara dismisses the distinction between Telecom and its "Internet brand", saying "Telecom retails its Internet product to its own customers for $4.95 an hour. This price includes 0800 Internet access and technical support. At the same time Telecom requires Voyager to pay $5.95 an hour for the 0800 component alone."
Meanwhile, Voyager appears to have won its side of an argument with the Advertising Standards Authority. Xtra referred Voyager's recent highly aggressive newspaper ads to the authority, whose decision has been given but can not be made public for two weeks. The fact that Voyager has booked a repeat of the advertisements in Friday's papers indicates it has received an all-clear.