Telecom urged to unbundle loop

By RICHARD PAMATATAU

Telecom should view unbundling the local loop as outsourcing, says Chris Gale, chief executive officer of Australia's Swiftel.

Gale was in Auckland last week to view the Commverge technology developed by Auckland's CallPlus which Swiftel, a Perth-based data networking company, will deploy as it expands across Australia and evolves into a full-service carrier.

CallPlus owners Annette Presley and Malcolm Dick have taken a $1 million 10 per cent stake in Swiftel and part of that investment includes a technology transfer.

Commverge, owned by CallPlus, is a "telco bypass network" which enables small and medium-sized businesses to get voice telephony, branch-to-branch networking services such as virtual private networks, and web access over the same high-speed connection.

Swiftel was spawned as a broadband telecommunications outfit and built a high-capacity network in Perth before opening offices in Sydney and Melbourne.

An example of a similar company in New Zealand is Vector possession Tangent Networks.

Gale was very critical of the New Zealand telecommunications regulatory environment and said - as have many other critics of Telecom - that it had to offer better wholesale deals and make the local loop available to every player who might wish to sell it.

Gale said that just as Telecom had outsourced its information technology, fixed-wire and cellular networks, it had to consider unbundling the local loop as another form of outsourcing.

He said the reseller took the credit risk, and was also responsible for the service to the customer.

In the broadband market, Gale said, prices had dropped to 6Ac a megabyte.

Gale would not reveal details of the commercial arrangement with Telstra but said it was working well - especially with online access to Telstra for making moves and changes.

Ever since Telstra made its broadband services available to resellers, use of the technology in Australia had rocketed.

If Telecom "outsourced" the local loop it would find customers would be offered better service by the resellers, leaving it to focus on bigger issues.

Gale said the number of broadband resellers in Australia had risen to more than 100, which meant better service for customers.

There were about five million Internet users in Australia, with three million on dial-up access, but the broadband market opening meant there was huge opportunity for growth.

Colin Marland, a director of Sydney-based People Telecom, has also invested in Swiftel and was also in Auckland viewing Commverge.

Marland is known in the Australian telecommunications market for his company CorpTel, bought in 1998 by AAPT.

He has another investment vehicle - the Chiffley Group - which he owns with Ryan O'Hare, brother-in-law of media prince Lauchlan Murdoch.

Marland was instrumental in the listing of Telemedia on the Australian Stock Exchange, and backed Internet Sheriff, a filtering system used to monitor and sanitise internet traffic between internet providers and customers.

Peter Williamson, former managing director of Telstra NZ, is sales director of People Telecom, which has given Swiftel access to about 12,000 customers.

Marland said the Government's approach to deregulation in New Zealand was backward. "I am amazed at how much power Telecom has."

Swiftel is considering adding a data storage service to its product set. With this service, customers would pay around A$10 a month to have access to an "outsourced F drive".

Gale said most small businesses did not back up data, and a service like this would make things easy for them.

He said Swiftel was on track to report revenue of A$15 million next June 30.