Telecom to remove loyalty programme as soon as possible
Telecom has just released a statement saying it is disappointed with the Independent Oversight Group's ruling, released this morning, that it is in breach of its Separation Undertakings.
However, the telco has told its wholesale customers - which include CallPlus and Woosh - that the offending offer will be withdrawn as soon as possible.
In quickly complying with the IOG's ruling, Telecom avoids further action from the Commerce Commision, and ultimately a fine of $10 million - or $500,000 a day - being levied by the courts.
But at the same time, it opens the door for Vodafone, Orcon (and soon TelstraClear) to renew their assault on Telecom's exchanges (the pair had put their bundling plans on hold pending the IOG's decision, saying the special wholesale rates offered to CallPlus and Woosh - who had stayed out of Telecom exchanges - made further unbundling uneconomic).
“The IOG's review of the offer is the first guidance on some complex operational
separation rules so today’s decision is an important one,” said Telecom Wholesale
chief executive Matt Crockett after a meeting with other Telecom managers, and lawyers.
“We launched the broadband and residential PSTN offers to compete for our
customers’ business. We felt the offers were consistent with, and in the spirit of, the Undertakings and competition.
“While we are disappointed, now that the IOG has confirmed its interpretation of
the undertakings we will abide by the decision and act accordingly,” Mr Crockett
said.
“We have responded immediately and Telecom Wholesale’s customers are being
informed today of our intent to remove the offers as soon as practicable."
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Comments and questions6
Ernie, quick... get out a press release praising Telecom's quick move! Never mind that for the past eight months it's been engaging in anti-competitive behaviour. Never mind paying back the money. Never mind taking any kind of penalty, it's all OK because Paul "I'll pay my TUANZ dues" Reynolds has agreed to back down starting some time soon.
What complete nonsense. This was an offer which allowed other telco's to use Telecom wholesale products and for them to make money and to be competitive across the country. A few of these so called rival companies will now no longer be able to compete.
The so called anti-competitive behaviour comes from trying to regulate a market through civil servants who know nothing about the market sector concerned. This is why in all other regulated countries, the regulation has been removed pretty quickly to allow the incumbent to give far better value to the customers all over the country and not just licking and choosing like the new entrants.
Suggest the person writing the other comment actually finds something know about before commenting.
Telecom charge $120 for one new business line and a jackpoint,contractor gets $75
Telecom charge $240 for two new business lines and jackpoints, contractor gets $75.
Telecom charge $360 for three new business lines and jackpoints, contractor gets $75.
Telecom charge $480..........
An electrician, plumber etc, gets to quote or is payed time and materials.
Thats why no one wants to contract to Visionstream.
Prices approx, include material costs.
I think perhaps it's you who needs to go and revisit the facts of the case.
I have no problem with a company competing for customers. That's exactly what I expect of a company. But when a company competes for customers by being anti-competitive, that's when the Commerce Commission or similar (in this case the company's own board) needs to step in and take action.
Would you support a company that began assassinating its competitiors' senior staff? Or does your largesse with our legal system only extend to financial misbehaving?
Telecom cannot offer discounts to wholesale fixed line customers who fail to take advantage of costly regulated unbundling access in local exchanges so generously acquired for them by government fiat - indeed it appears that it can be fined for doing so.
Vodafone can and does offer mobile termination rate discounts (relative to other customers) to a specific customer who sought, got and then failed to take advantage of regulated access to put their equipment on Vodafone towers so generously acquiured for them by the same powers of regulatory fiat. Or so we believe. Regulatory fiat seems more interested here in preventing the public from knowing if this state of affairs has actually occurred than addressing any apparent anomaly in application of competition law.
What is the real difference between the two cases (assuming Vodafone has actually done a deal with 2 Degrees that is better than the one offered to Telecom and others)? I would argue none, except that the IAG (and mandatory separation of Telecom) has added yet a further layer of regulatory bureaucracy and potential for inconsistencies in decisionmaking that was not present prior to separation. What we see here is failure of the regulatory process to accept competition to its own agreements -i.e. in New Zealand no parties are allowed to be free to negotiate a better deal than the one negotiated on their behalf by the regulator. I shudder to think that structural separation may be posed as a 'solution' to the problem of Vodafone 'discriminating' in favour of one of its customers over others.
Wait till the Commerce Commission notices that Telecom wholesale's no mobile services at all (I don't count the CDMA network) and that Vodafone has a "monopoly" on the MVNO market.
Bet you a case of beer the CC decides to investigate Vodafone for being the only game in town.
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