Pressure made Telecom move, says rival

Mark Rushworth

Telecom's announcement of a roll-out of advanced broadband services from June onward is an attempt to stave off harsher regulation, rival iHug and the Telecommunications User's Association (Tuanz) say.

But Telecom batted away the criticism, saying plans for a mid-year roll-out of ADSL2+ capability were laid long before the present broadband brouhaha blew up.

Ihug chief executive Mark Rushworth said Telecom's announcement yesterday was "in response to all the regulatory pressure", a view shared by association chief executive Ernie Newman.

"The technology's been available for a number of years now and with the pressure that the industry's putting on them, they finally realised that they have to do it," said Rushworth.

Newman said ADSL2+ , which can provide internet download speeds up to 12 times faster than existing services, was late arriving in New Zealand. He was also concerned about the lack of a specific timetable for the introduction of retail services in Telecom's announcement.

But Telecom's Matt Crockett said said the announcement of the programme, which will cost up to $170 million, was not timed to influence the government's review of competition in the broadband market.

"This is something that's part of a multi-year $1.4 billion programme of work. You don't just turn on a 20c piece and bring forward a whole load of things because there's some media and PR interest in it."

The time table for deploying ADSL2+ technology from mid 2006 on had been in place "for quite some time now, probably 12 months".

Meanwhile, Rushworth said ihug would be keen to resell Telecom's ADSL2+ services if it could buy them at a "retail minus" rate - Telecom's retail price minus a margin of 18 to 25 per cent.

The Government's review may result in Telecom later this year being forced to rent its fixed line network to competitors like ihug under the scenario known as local loop unbundling (LLU).

"The unfortunate aspect for us is that we'll get LLU in June," said Rushworth.

"But it will take 12 months for Telecom to give us access to their exchanges and, by that stage, they'll have their service up and running and they'll cherry pick the most profitable customers and put them on to the ADSL2+ technology straight away."