Australians firms look to NZ after unbundling decision

Australian telecommunications companies are expected to expand across the Tasman to take advantage of the Government's decision to open up Telecom's phone and internet network.

Sydney-based People Telecom yesterday became the first Australian telco to start business here after the Government's unbundling decision.

The company, which had revenue of A$100 million ($118 million) last year, said it had struck a deal with CallPlus that would see it using CallPlus' network to sell a range of data and voice services focusing on the small to medium-sized business market.

People Telecom chief executive Ryan O'Hare said the deal with CallPlus would enable a fast and inexpensive entry to the newly deregulated market.

"With the recent announcements on deregulation, the market will become increasingly competitive as global telecommunication players enter over the next few years," O'Hare said.

A Merrill Lynch analyst in Australia - who asked that his name not be used - said significant numbers of small telecommunications players were looking into expanding here.

CallPlus chief executive Martin Wylie said the deal with People Telecom would begin immediately.

He expects the crossover in services between the companies to boost CallPlus' plans for expansion of high-speed wireless internet (Wimax) here, where it expects to be in direct competition with Telecom. Wimax is expected to start commercially in the next three to six months.

Wylie believes People Telecom's voice-over-internet-protocol product, in particular, will take off as the naked DSL market develops.

Naked DSL will allow a digital subscriber line broadband connection without having to rent a phone line as well.