TelstraClear strikes first in broadband

TelstraClear has introduced better broadband deals just days before Telecom rolls out its new residential plans.

Australian-owned TelstraClear has increased the traffic allowance on residential plans using its own network, which is available only to about 160,000 homes in Wellington and Christchurch.

Telecommunications Users Association of New Zealand chief executive Ernie Newman said the move was competition at its best "and what a shame it was that TelstraClear's network never found its way to Auckland".

Steve Jackson, TelstraClear head of consumer markets, said the data needs of users was becoming a bigger issue as internet use increased.

"So we saw this as an opportunity to extend [services] for the same price [and] give people larger traffic allowances."

TelstraClear's entry level plan, effective today for $29.95 a month, has a traffic allowance of 1 gigabyte and a download speed of 2 megabits a second.

Telecom's new entry level plan - to be launched on April 2 - costs the same but has a 200 megabytes allowance and a download speed of 256 kilobits a second.

Telecom's top-end plan has a 40 gigabyte allowance, a download speed of 3.5 megabits a second and will cost $149.95 a month.

TelstraClear's 40 gigabyte plan is nearly three times faster at 10 megabits per second and costs significantly less at $99.95 a month.

TelstraClear has also reduced the charges for over-running allowances. Its users will pay $2.95 for extra usage of up to 2 gigabytes depending on their plan.

Telecom's new plans will either throttle users back to dial-up speeds or charge 2c for each additional megabyte used - equivalent to $20 a gigabyte.

A Telecom spokesperson said TelstraClear's move reflected how competitive the broadband market was. By Christmas, Telecom will have plans with download speeds of up to 24 megabits a second.