Xtra cries foul at ISP claims of $10 a month

By MICHAEL FOREMAN

Auckland-based internet company VirtualISP has attracted the ire of Xtra by claiming that its new $10 a month E3 service is comparable to services offered by the Telecom New Zealand-owned provider and Clear.

At the same time, sources close to VirtualISP have claimed that Xtra has squeezed VirtualISP-owned Ezysurf out of one of its key retail outlets, by inducing Noel Leeming into an exclusive distribution deal.

VirtualISP chief executive Michael Spencer claimed in E3 pre-launch publicity that the service at www.e3.net.nz "brings together all the top-range services offered by the major players such as Xtra and Clear, for just $10 a month."

Xtra product strategy manager Chris Thompson disagreed, and last week sent an e-mail to Mr Spencer objecting to the claim.

"He was stating that the service would equal Xtra's," said Mr Thompson. "Obviously, that's not the case.

"The primary [difference] is that we don't charge you $2+GST a minute to use our helpdesk, it's a free service.

"If E3 is targeting users of free internet services, customers might be surprised at being charged for help," Mr Thompson argued.

This could amount to a substantial charge, as in Xtra's case the average length of a helpdesk call was 11 minutes.

"I'm worried a lot of people might be misled."

Mr Spencer said E3 would be superior to Telecom in some respects because he guaranteed a 5:1 user to port ratio.

If an insufficient number of ports or modems are provided by an ISP, users would receive busy signals when attempting to connect.

Mr Spencer said that some established ISPs were running ratios of 15 or 18 users to each port.

This was dismissed as a "spurious argument" by Mr Thompson, who pointed out that if many customers were connected permanently, a 5:1 user to port ratio may be inadequate.

"If a hundred people are online and there's a hundred ports then the hundred and first person would get a busy signal - 5:1 is a good standard for the industry but it's also typical of somebody who doesn't have any customers."

But Mr Thompson would not divulge Xtra's port ratio.

"It varies by time and area - we run it to keep busy signals off."

Meanwhile, Mr Spencer confirmed that Pacific Retail Group, which owns Noel Leeming, was no longer distributing Ezysurf CDs following an exclusive deal with Telecom.



Pacific Retail Group general manager of sales and marketing Michele Teague confirmed that Xtra had been selected as an exclusive distribution partner, but she did not regard the deal as being anti-competitive.

E3 is available in two flat-rate plans, which cost $10 a month if a user pays annually or $15 if paid monthly.

So far, 100 people had signed up for the $10 annual plan and 70 for the $15 a month service.

Mr Spencer, who also owns the national ISP coolnet and Tauranga-based Vnet as well as Ezysurf, said customers for all three combined brands stood at just under 4000.