Aardvark Daily
ClearNet won't chase Xtra's new pricing
Copyright © 1998 to Bruce Simpson, syndication rights available
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13 Feb 1998

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Clear Communications have never felt the need to strive for price-parity with Telecom's Xtra ISP offering and they're not about to change now.

ClearNet claim they already offer nation-wide coverage through their 0800 access and that they're not about to enter into a price-war with Xtra.

Keen to highlight the perceived benefits of ClearNet's service, the company issued a press release yesterday in which they emphasize the availability of 56Kbps access "so that time on line can be significantly reduced". In response, Xtra are saying that they expect the IPNet service, on which the new pricing plan is based, will be upgraded to support the new ITU 56K standard as soon as equipment is available. Presently ClearNet supports the proprietary K56Flex protocol however most K56Flex and X2 modem manufacturers have announced an upgrade path to the new standard for their existing products.

ClearNet also emphasize that there are "no hidden costs" in their pricing, making the point that Telecom NZ business customers are still paying 5.12c (incl GST) per minute for in local-call charges on top of the amount levied.

Peter Hutterli, communications business manager for Xtra says "Yes, the new $2.50 per hour NZPlan will be slightly more expensive for business users than the previous 0800 service because now they will be paying the local-call charge as well, but it's only a few cents".

A quick calculation reveals that Xtra business customers previously using the 0800 dial-up service at $4.95 per hour will now be paying $5.57 per hour during business hours, an increase of around 10%. Xtra are quick to claim however, that this price is still less than the $5.95 being charged for toll-free access by ClearNet and that if business users are accessing the Xtra service during off-peak hours, that price will drop to $3.16 per hour. ClearNet offer no off-peak discount on their 0800 service.

As predicted yesterday, a number of smaller ISP operators have already expressed concern that the new pricing from Xtra is anti-competitive and may undermine their own positions within the market.

Telecom claim that the IPNet service will be available to any ISP who wants it, however when contacted, they would not provide a base-pricing for the service, claiming "commercial sensitivity". Despite not being able to disclose the price, they are claiming that several other ISPs are signing up for the IPNet service.

Regardless of how real the Chinese wall between Xtra and Telecom may be - it would appear that the Telecom spin-doctors still have their work cut out in convincing a skeptical industry.

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