Telecom competitors hit back

Theresa Gattung

Telecom's move to raise home line-rental charges for non-toll subscribers is prompting charges of anti-competitiveness and confusion-sowing from rival providers and customers.

The company has been canvassing customers on its Anytime plan who have their toll calling with other providers, such as CallPlus and ihug, to switch back to Telecom.

Customers who choose to stay with other toll providers will face a home line-rental increase from $39.85 to about $42 per month.

But many competitors offer a $10 discount on internet services to customers who sign with them for tolls.

Some Anytime customers are thus being forced to choose between a $3 increase from Telecom or, if they switch their tolls back to the company, a $10 increase from their ISP.

"It's clearly a sign of confusion out there," said ihug chief executive Mark Rushworth, who is a former Telecom consumer-calling manager. "They're using one tool that we can't compete on to win back on a product that has an element of competition."

Telecom, which saw its shares slide another 5c yesterday to $4.63, landed in hot water this week for admitting to confusing customers.

Prime Minister Helen Clark sharply rebuked chief executive Theresa Gattung for a speech she gave in March in which she admitted telcos had in the past used confusion as their chief marketing tool.

The Commerce Commission confirmed that three complaints on the tolls matter had been received in the past two weeks.

Telecom said it was contacting only a small number of customers about the increase, which was justified because Anytime is in effect a line rental and toll bundle.

Customers who have their tolls with other providers had essentially violated the Anytime terms and conditions, available on Telecom's website, and were thus not entitled to the cheaper monthly rate.

"We have a legal obligation to do this kind of enforcement," said Matt Crockett, general manager of Telecom's wired division.

Crockett said the company was clearly informing Anytime customers that they had to choose between price increases, either from Telecom or their ISP.