Sponsor's Message

What's worse -- the interconnect fee they're able to charge other Telcos to interface to their network has been slashed and the new rate backdated "by law", meaning they now have to pay back millions of dollars to competitors.

And of course, it's a very competitive marketplace out there so they can't boost revenues by simply hiking prices when they're trying to go head to head with other providers.

They can't even exploit their virtual monopoly in the domestic local loop because of the effects of the "Kiwi Share" and the restrictions it places on price increases.

So what's a poor embattled Telco to do?

Well it seems that Telecom are doing two things to try and remedy their woes.

Firstly, they're continuing to pour money, effort and resources into the Australian marketplace where (unlike here in NZ), they're seen as a "white knight" who is battling the evil dominant player Telstra.

Readers Say (updated irregularly) cost of phone... - Ian Telecom services to... - Chris Have Your Say

This is a complete reversal of the situation here in NZ where many people see Telstra-Clear as the white knight forcing Telecom to reign in its prices and smarten up its service. Funny that.

Evidence of Telecom's continued push into Australia is seen today in the form of this story from AustralianIT which reports the company's move into the Aussie broadband Internet market. I bet there are more than a few Kiwi DSL users who wish Telecom would spend some of that money fixing up their JetStream reporting systems before they go investing in the provision of broadband services offshore eh?

The second string to Telecom's "earn more money" bow seems to be the spectre of a huge hike in the cost of installing new phone lines.

If you're unfortunate enough to live in an area with a low(ish) population density (read: rural or remote) then you're going to have to ante-up with a whole lot more cash to get the phone on. In fact, getting the phone connected could cost you thousands!

To be honest, I don't have a problem with this.

If your local power company can charge you tens of thousands to string power lines to your new country residence, why shouldn't Telecom be allowed to do the same with your phone lines?

When I had two new lines installed several years ago I was astonished that the charge was so low when compared to the amount of work that was involved.

A new cable had to be run under the road and a trench dug to the house. This tied up two guys for almost two days -- and it cost me just a couple of hundred dollars.

Given the very real costs involved in connecting remote dwellings to the phone network, I see no reason why Telecom should continue to subsidise such installations and if I were a shareholder I'd be quite happy at this move.

Of course I'd also expect that any flash, shiny, *expensive* new copper that was laid to my country house at great cost to me would also be fully capable of providing me with the same quality of internet connection that my city cousins enjoy -- wouldn't you?

If you want to have your say on the contents of today's column then please do so. Only comments marked "For Publication" will (if I have time) be published in the readers' comments section.

Just add a couple of lines of JavaScript to your pages and you can get a free summary of Aardvark's daily commentary -- automatically updated each and every week-day.

Aardvark also makes a summary of this daily column available via XML using the RSS format. More details can be found here.

Contact me if you decide to use either of these feeds and have any problems.

Linking Policy
Want to link to this site? Check out Aardvark's Linking Policy.

Did you tell someone else about Aardvark today? If not then do it now!