Telecom loses a battle but could win the war

16 Jan 2006

In a surprise announcement last Friday, New Zealand’s largest telecoms operator Telecom said it had struck a deal with rival telco TelstraClear giving the latter access to ‘certain broadband and other services’ on its networks, thus ending a bitter pricing dispute that threatened to arouse the interest of the country’s lawmakers. The decision to offer TelstraClear set prices for access is an astute move as it reduces the regulatory risks hanging over Telecom.

Under the deal, Telecom has agreed to pay TelstraClear NZD17.5 million (USD12.23 million) as part of a wholesale internet agreement that will see it giving its rival higher discounts to use its network. The wholesale discount for residential landline services will rise from 2% to 5%, while the discount for all other wholesale services, will increase from 16% to 18%, Telecom said.

New Zealand, Spark, TelstraClear