TelstraClear unimpressed by Telecom's 'tiny step'

By PETER GRIFFIN


TelstraClear will be able to resell Telecom's local calling services by the end of the year, with a Commerce Commission draft report setting the terms for co-operation between the rival telcos.

But TelstraClear chief executive Rosemary Howard cynically described the development as a "tiny step for mankind" and one that should have come about 2 1/2 years ago under the terms of the Telecommunications Act, which was introduced in December 2001.

TelstraClear and Telecom had been commercially negotiating terms of a wholesale deal for residential telecoms services.

Effectively, TelstraClear will be able to offer residential customers local calling, branded and billed under the TelstraClear name.

It will receive a 2 per cent discount on Telecom's standard price for local calling services and a range of discounts for "bundles" of Telecom services it wishes to sell.

Those services might include Telecom deals such as Favourite Place, MessageLine, a second phone line and Call Minder.

"It's what we anticipated," Howard said, "but by international comparisons it's an extraordinary poor set of discounts."

TelstraClear would be able to "own" the relationship with its residential customers in areas such as Auckland for the first time, but would struggle to profit from them given the small discount.

Howard said customers could move all their business to TelstraClear but no new services would be on offer.

"It's a choice of service provider but not a choice of services."

The commission's final report will be released in June.

Howard said it would probably take six months after that to work through the technicalities of the wholesale deal.

She said the opening up of Telecom's copper wire network to competitors - an issue now before Communications Minister Paul Swain - would benefit TelstraClear to a far greater degree than the wholesaling arrangement.

But Telecommunications Commissioner Douglas Webb described it as a "win-win outcome" that would give consumers greater choice of telecoms services.