Telecom makes Internet market entry

http://www.xtra.co.nz, Telecom's entry into the Internet market, goes live today (try the link after about 6.30pm) with the company boldly promising to make it one of the best services and sites on the Net in the next 12 months.

Telecom is giving as much emphasis to content as service provision as it launches the service, but expects the return on its investment to come from services initially.

The telco's Internet service head, Chris Tyler, says New Zealand's Internet population of 35,000 (his estimate) has the potential to double in the next 12 months and Telecom expects to sign up half of those new connections.

Tyler describes the site as the Telecom site as "immature" yet, but says it will be refined as deals for content are negotiated with information providers. "We're not building a publishing organisation, but more of a packaging unit," says Tyler. He confirms discussions for news content are under way with local provider IRN. So far, the news service consists of a Reuters feed.

Content is divided into 12 categories, Tyler says, which will be accessible from an eWorld-like (Apple's defunct online service) front-end to anyone on the Net. Content categories are news and weather, business, education and reference, computers, sport, lifestyle, entertainment, shopping, community, Xtreme (aimed at the 20-somethings), and Buzz (for kids).

Don't get too excited about the shopping service yet: it kicks off with the ability to buy Xtra-branded goods (baseball caps etc), paid for by credit card. However, Tyler says the plan is to extend the online commerce service to other merchants and use the Telecom phone billing service for payment.

Tyler has offered assurances to existing Internet service providers about the controversial pricing issue. When Telecom's entry into the market was first flagged last year, Voyager, in particular, was nervous that Telecom would exploit its market position to undercut existing providers.

Voyager complained first to the Commerce Commission and then threatened legal action, alleging that Telecom would have an unfair market advantage as both a bandwidth wholesaler (through subsidiary Netway Communications) and ISP.

However, at today's Xtra launch in Wellington (videoconferenced to Auckland), Tyler shrugged off Voyager's fears, saying the issue of how much Xtra pays to connect to the national phone network has been "looked at closely and I believe we're in compliance with legistlative requirements".

Telecom is offering three rates for connecting to the Net. Each has a connection fee of $39.95. The Links Plan costs $19.95 a month, includes two hours online and additional connect time is charged at $6.95 an hour. The Browser Plan cost $29.95 a month, includes four hours online and additional connect time costs the same as under the Links Plan. The Discovery Plan costs $49.95 a month, gives you 10 hours online and additional time at $4.95 an hour.

The service will be billed on the standard Telecom phone account.

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