Telstraclear takes aim at nationwide home phone market

8.15pm

TelstraClear hopes to eventually claim up to 40 percent of the home calling market with new deals that give it a line into households the length of the nation for the first time.

That move allows most Telecom customers to take their line rental and calling business to TelstraClear and keep their phone number. Previously only customers in TelstraClear's strongholds of Wellington and Christchurch have been able to do so.

But is it worth jumping ship? TelstraClear will match Telecom's monthly line-rental fee of $39.85 but is offering discounts based on the tolls calls customers make each month. The key thing is whether those discounts match a variety of discount deals offered by Telecom.

Chief executive Rosemary Howard said 1000 customers had already switched over in the soft launch of the "HomePlan" offers -- 53 percent of its existing customers that had been approached so far.

The deals favour those making lots of toll calls -- spend $200 a month on calls and receive free line rental, spend $40 and save $120 on line rental. Mrs Howard expected existing Internet customers to begin giving their phone line rental to TelstraClear as well.

But Telecom, which up until now has had a monopoly on residential local calling outside of Wellington and Christchurch, claims 63 percent of its customers spend less than $20 a month on top of their line rental. Under TelstraClear's new pricing, those customers would receive no discount.

Just 0.4 percent of customers spend $200 or more a month, said Telecom spokesman John Goulter who pointed out that customers shifting to TelstraClear would miss out on some Telecom deals that require all calling to be placed through Telecom.

Ironically, TelstraClear is effectively re-selling Telecom's phone line access at a 2 percent discount -- so Telecom still takes most of the pie. Other services such as the Jetstream fast Internet products are sold to TelstraClear at a 16 percent discount.

It has taken two and a half years for the Australian owned challenger to win the regulatory concessions and make the technology changes necessary to put the deals in the market.

Joining Mrs Howard at the launch of the deals in Auckland, Communications Minister Paul Swain said the deals would "kickstart" competition in the residential market.

Mrs Howard said TelstraClear would approach the Commerce Commission in a bid to get bigger discounts from Telecom. She still believed the Government should have forced Telecom to fully open its network to competitors.

"We believe still that we'd more quickly see the opening up of the market (with unbundling)."

Existing regulation means TelstraClear cannot offer the deals to customers who are within a 100m of its existing network.

Mrs Howard said that was frustrating but it affected a small number of customers.

The residential resale business will not be lucrative for TelstraClear but it bridges a major gap that previously stopped the telco from reaching the bulk of residential customers.

The deals were launched as TelstraClear revealed it has picked up Inland Revenue's communications business, which has long been held by Telecom. The taxman spends $10 million a year communicating and TelstraClear has the business for four years.

- NZPA