CallPlus accuses Telecom of unfair pricing tactics

By PETER GRIFFIN

Second-tier toll call operator CallPlus claims Telecom has tightened the thumbscrews on smaller competitors and is bumping up prices to claw back revenue lost through unfavourable Commerce Commission rulings.

Auckland-based CallPlus has followed in the footsteps of TelstraClear and filed an application with the commission seeking better deals from Telecom for network interconnection and wholesale services.

CallPlus chief executive Malcolm Dick said he had been told by Telecom account managers that per-minute interconnect pricing was being increased to cover price reductions worth millions of dollars won by TelstraClear.

"They bluntly admitted that they were doing this to recover the forced price reduction caused by the commission's last determination."

Dick said the new pricing, along with payments CallPlus will have to make next year to cover its contribution to the Kiwi Share, would make his business uneconomical to run.

"We are now in the insane situation where the determined rate for a call from Great Barrier Island to Pukekohe is 1.13c per minute, but a call from Orewa to Warkworth is 7.2c per minute - more than we pay for a call to Puerto Rico," he said.

With a relatively small telecoms network, CallPlus relies on the use of Telecom's network for sending long-distance calls around the country.

By building out more "points of presence" CallPlus decreases its dependence on Telecom but faces a large capital outlay to duplicate infrastructure.

Telecom says CallPlus does not enjoy as favourable pricing as its larger competitors because it carries only 5 per cent of the call traffic TelstraClear carries.

Telecom's group general manager, government relations, Bruce Parkes, said prices were being put up for CallPlus, but that the long-distance or "national transport" services it supplied to CallPlus were not covered by the Telecommunications Act.

"We're looking to move those prices to [more] closely account for cost recovery than they currently do," he said.

Dick wants similar rates to that which the commission handed down to TelstraClear - 1.13c per minute.

"Long haul termination on that basis would be 1.8c to 2c a minute. Telecom has responded to us by going from 4.5c to 7.2c per minute."

He said Telecom was also dragging the chain in granted access to wholesale services.

But the "last straw" was Telecom's decision to put a 15 per cent premium on local calls.