A long-desired goal of TelstraClear CEO Rosemary Howard was finally reached this week when the telco announced it will offer its own residential telephone service.
The new “Homeplan” range of residential telephone products is the fruit of a Commerce Commission determination two years in the making which allows TelstraClear to resell Telecom services at a small margin.
The service is identical to Telecom’s offerings in terms of functionality and features, but differs in that TelstraClear will discount the line rental depending on how much a customer spends each month. For instance, customers who spend less than $20 receive no discount from the $39.95 monthly rental. $20-$40 per month spending gives a $5 discount and if customers talk their way through more than $200 worth of calls, TelstraClear rebates the cost of the line rental entirely.
The new plans are available nationwide from next week.
While Howard is disappointed at the 2% margin TelstraClear makes from reselling Telecom voice lines, she nevertheless says that the new home phone plans represent true competition in the billion-dollar residential market for the first time.
She says TelstraClear wants the Commerce Commission to review the margins and hopes they will be increased.
The Minister of Communications, Paul Swain, joined Howard in announcing the new plans, saying they showed that Telecommunications Act of 2001 was working to bring “genuine competition in telecommunications” for New Zealand.
Swain says a competitive telecommunications environment is necessary for New Zealand to bring the country back into the top half of the OECD.
Pressed on how well the regulatory process is working in view of Howard’s expressed disappointment with the low margins, Swain admits the lack of timeliness and enforcement are of concern. He says the Telecommunications Act is currently being reviewed with the aim of ensuring a quicker process with new powers for the Commissioner to enforce determinations such as fines. In hindsight, Swain says, there should have been a regulatory environment introduced with the privatisation of Telecom, but he says the current government is having to repair the mistakes of past administrations.
Telecom New Zealand was asked to comment on the new TelstraClear plans, but as of publication, had nothing to say.
Details of the new home phone plans are available on the TelstraClear website.