Telecom Xtra's pitch for the corporate market rests heavily on what that market has been calling for--more bandwidth--but at prices which will not overly trouble the competition.
The ISP's new package, Xtra Business, offers dial-up ISDN, DDS and Frame Relay Internet connections, as well as Xtra Address, a domain name, IP address and mailbox service for companies wishing to connect their own networks to the Internet.
The pricing is, like Xtra's consumer service, towards the high end of its market, but Telecom will be counting on its investment in state-of-the-art hardware to woo corporate custom.
In Auckland, the most competitive market for Internet access, Xtra's ISDN pricing compares poorly with market leaders the Internet Group ($49 a month plus $3/hr; or $99 a month with 60 hours free, additional hours $2) and Internet Prolink ($49.95 a month, $8/hr).
Not everything in Xtra's offering is premium-priced, however. The DDS charges are somewhat more in line with current market rates and one component of the offering is a positive bargain--Xtra Address offers licensed copies of Netscape Navigator for use on LANs for only $25, half the price from Netscape direct.
Xtra market development manger Guy McKee told a full room at the IDG Internet Expo on the day of the announcement that the Xtra frame relay service would be able to provide "burst capacity" above a standard set rate for commercial users who required it. He said home and office workers were becoming aligned, leading to a demand for more bandwidth to the home. "The network is in place and we can't rigidly control these things."
"Telecom still doesn't want people using ISDN because it can't keep up with demand, and I think this pricing reflects that," says IHUG manager Nick Wood. "I put in an order for a basic rate connection at my home, to try a few things out, and was told there'd be a two-month wait. I know that providing a 64kbit/s service doesn't cost a hell of a lot more than ordinary dial-up--all you're changing is the international component.
"Xtra has once again positioned itself at the top of the market, but that won't last for ever. They're giving themselves time to learn their business and eventually I think you'll see a real drop in their rates.
"But as far as ISDN goes, Telecom's still got everyone else by the nuts. Clear is beginning a primary rate ISDN service, but basic rate would involve interconnect deals with Telecom. I think we're 12 to 16 months away from better ISDN line rates for business--let alone the domestic market."
One problem with Telecom's ISDN installation is thought to be a shortage of network terminal units. Telecom currently installs its own NTU at either end of an ISDN circuit and thus can not currently connect with the cheaper and more plentiful American ISDN boxes which come with NTUs built-in.
Xtra Business--The Prices
Prices include Xtra Internet connectivity only. Costs for other products and services--such as phone lines, data circuits (both ends), modems, routers, other hardware and software--not included.
*Domain name--$50 (subject to change)
*Xtra LAN Browser Client--$25 per PC
Digital Dial-Up (per 64kbit/s circuit)
*Connection--$49.95 (includes standard software and email account)
*Monthly Minimum--$149.95 (includes 10 free hours online)
*Usage--$14.95 / hour
Xtra Dedicated (not available until August)
Digital Data Service and Frame Relay
*Monthly Access--$100 per 64kbit/s circuit
*Monthly Data Minimum--$100 (includes 100 free Mb)