Paradise found as net costs fall

By MICHAEL FOREMAN

Paradise.net owner Telstra Saturn has become the first major internet service provider to respond to a 40 per cut in internet connection charges by Telecom's Xtra.

Paradise last night cut its charge for 250 hours' monthly access by a third to $20.

The company attributed the move to Telstra Saturn's ability to pass on cost savings of a recent merger between Saturn, Telstra New Zealand, Paradise and Netlink.

But Saturn residential managing director Sean Wynne said the cut had also been prompted by Xtra's decision.

Meanwhile, ihug is expected to announce today a reduction in its $39.95 a month flat rate for dial-up accounts, which will at least match Telecom's $24.95 rate announced this week.

Ihug director Tim Wood said the new rate would probably offer low-cost telephone calls as part of the package, and the company would also introduce a new low-cost plan for its Ultra high-speed internet service.

Mr Wood said the price cut would affect ihug's cashflow, but not to a crippling extent as an increasing number of customers were switching to higher-value services.

"Everyone thinks all our customers are flat rate but a lot of them are on other plans," he said. "We will survive."

Clear spokeswoman Rochelle Lockley said her company had no plans to reduce its flat-rate price but would continue to monitor the pricing.