Matt Crockett provides answers for Telecom

Matt Crockett

Telecom has come under fire for its new broadband plans, which it is rolling out on April 2. The company is touting the plans as cheaper and faster, but critics say they are neither. Telecom wired division general manager Matt Crockett explains to Peter Nowak.

Are the new plans cheaper and faster across the board than existing plans?

Our new plans are a good step forward for broadband users. All plans will improve either in speed or price. Customers on some of the existing plans will get a speed upgrade at no extra cost, while some plans keep the same speed but drop in price.

Some enjoy a speed increase and a price drop. For businesses, the price cuts are really big, so broadband is getting a lot more affordable for small businesses where it will really help productivity.


Why are the download limits on the two comparable plans going down rather than up?

We have looked closely at what customers actually do with their plans and we've tried to find ways to give them more of what they want.

We have retained three existing plans - and all three are getting better in various ways. The Xtra Go plan previously had a data allowance of 1 gigabyte for $39.95 and download speed of 256Kbps. The new version still has a 1 gig allowance, still costs $39.95 but now has a maximum download speed four times faster at 1 megabit per second. If anyone wants to stay on their old plan, they can.


Why does Telecom impose download limits?

Like Australia, most internet traffic here comes from the other side of the world, rather than internally. So most ISPs in Australasia use capped data plans. That way, they can keep broadband most affordable for most people. Most people don't come anywhere near using their full data amount.

We had a close look at those patterns recently and found that just 5 per cent of customers use about 50 per cent of the total bandwidth. That small group are the people who ride up close to or above the data caps and we don't think the great majority of customers should be paying more to subsidise the extreme users. For big users who want to know that the bill will be exactly the same every month, there are plans where the speed slows down once they pass the cap, but the price stays the same.


Telecom owns half of Southern Cross Cable, which controls international traffic. Isn't it in your interest to keep the cost of that traffic high?

You've got the equation the wrong way round. Yes we did make a huge investment in Southern Cross - because it makes sense for New Zealand to have great connections with the rest of the world. But Telecom is charged by Southern Cross just the same as any other customer is.

International bandwidth is a commodity market. We try to get the best deal possible and pass the benefits on to our own customers.

Don't download limits discourage customers from using things like online television, which eat into those caps quickly?

We do offer big plans for customers who use a lot of data - but we don't think ordinary users should be subsidising them. When IP video becomes a reality - and we made big steps towards that with yesterday's announcement of Next Generation Broadband - you can expect to see pricing plans that make it most affordable for customers.

Telecom has specified the minimum speed of existing plans. What is the minimum on the new ones?

Broadband speeds the world over are presented as maximum speeds because there are so many factors that can influence the speed that an individual experiences at any time.

We can set the speed of our driveway to the internet, but once customers are out on the international internet highway, lots of factors determine their speed. So you see speed expressed as then maximum possible with wireless, DSL and satellite broadband products.

Why are customers being charged extra for higher upload speeds?

We've got lots of plans to suit different customers. Like in any business, if you just need a little you pay less. If you want more, you pay a bit more. It costs more to fly business class than economy class.