Resale of Telecom's services pondered

A principles paper on discounts for the resale of Telecom's services was released yesterday by the Commerce Commission.

Telecom and TelstraClear asked the commission to review the discounts it set for resale of Telecom's business and residential services.

The discount for the resale of Telecom's non-capped services sits at 16 per cent, while price-capped services are resold at a 2 per cent discount.

In July last year, Telecom and TelstraClear applied for a pricing review. As part of its ongoing review, the commission will re-calculate wholesale discounts based on two cost standards: one for price-capped services, and services sold in areas with competition, and the other for areas without effective competition.

Both standards are based on the costs that are saved by Telecom when resellers perform all or some of the retailing function.

Three types of service are under review: retail services via Telecom's fixed line network; residential local access and calling service offered by Telecom's fixed line network; and a bundle of retail services offered via Telecom's fixed network.

- NZPA