KEY POINTS:
An unexpected lift in the final price Telecom can charge rivals to use its network gave the telco's share price a boost but got a mixed reaction from the industry.
The Commerce Commission yesterday set the price for local loop unbundling at $19.84 per customer per month in urban areas and $36.63 in rural areas.
The charge to switch a customer to an unbundled local loop will be $74.83.
The market reacted positively to the news, pushing Telecom's share price up 14c to $4.34.
The commission had originally proposed a draft price of $16.49 for urban areas and $32.20 in rural areas, with a switching charge of $83.70 a customer. Telecom spokesman Mark Watts said the company was encouraged by a price rise which it thought was previously too low to justify investment.
Telecommunications Commissioner Ross Patterson denied pressure from Telecom brought about the boost to the unbundling prices.
He said the same methodology was applied to work out the draft and final pricing but additional international benchmarking data contributed to the lift.
Ihug chief executive Mark Rushworth said he was surprised by the $3 increase, slightly offset by a reduction in the cost of switching over customers.
Scott Bartlett of Orcon - a company which had previously been bullish on opportunities presented by unbundling - said he was unimpressed by the prices.
"This really does start to put a big question mark around whether or not access seekers can justify investing in broadband and new services," he said.
He didn't rule out an attempt to challenge the commission's decision.
TelstraClear's manager of regulatory access, Wendy Dodd, said it would need to see the details of Telecom's own network investment plans before it made any investment decisions, particularly "cabinetisation" which allows a fibre-based network to bypass the local exchanges.
CallPlus chief executive Martin Wylie said the final price was disappointing and would require analysis of how it stacked up against other options such as wireless and wholesale broadband access.
* IN THE LOOP
The Commerce Commission has given pricing, terms and conditions for internet providers to use Telecom's copper network.
The price for local loop unbundling is $19.84 a customer a month in urban areas and $36.63 in rural areas.
The draft charge to switch a customer to the local loop has been set at $74.83.
Urban areas are: Whangarei, Auckland, Hamilton, Tauranga, Rotorua, Gisborne, Napier-Hastings, New Plymouth, Wanganui, Palmerston North, Kapiti, Wellington, Nelson, Christchurch, Dunedin and Invercargill.
