If 2007 was the year that the much-anticipated regulatory reforms were drafted, 2008 is the year in which they will be enacted. But will the New Zealand User, who has waited patiently through seemingly endless rounds of determinations, finally get cheaper calls and faster broadband?
First off the blocks is Naked DSL – the ability for a competing telco to provide services over the incumbent’s copper network. This is where ISPs such as CallPlus and WorldxChange can make a difference with their innovative VoIP products.
But, as Kevin Nicol discovered when he went to sign up to the WorldxChange VoIP product Fusion, so much depends on location. Nicol lives on the outskirts of a major provincial town but his house is close to a cabinet so he has an excellent DSL connection. However, he discovered that Naked DSL only makes financial sense if you are an ‘urban’ customer and he emailed TUANZ to find out why.
“I'm interested in Naked DSL (WXC Fusion) however its a very close thing financially as if I'm a "urban" customer I save $11.00 /month over Telecom (the incumbent), however If I'm deemed a "Rural" customer Its $15.00+/month more expensive than Telecom.”
He had no idea why there were two prices, so I emailed him to explain that the Commerce Commission determination set a rural and an urban price and this was presumably being passed onto the customer. Nicol then contacted the Commission himself and discovered to his relief he is connected to an ‘urban exchange’ and sent me the following response:
“The Fusion Pricing model seems so tight that only small savings are made for a typical Urban customer $11.00 per month in my case - but under the Rural offering near $20 worse off by using the WXC offering (marginally better with Slingshot).
Don't get me wrong I'm a long-term customer of WXC and have no love lost with Telecom (if I can make the numbers work WXC would have my custom).”
Reforms such as Naked DSL are designed to create a more competitive environment. The idea being that competition will drive down prices and in turn stimulate much needed investment in the telco sector.
But Nicol’s experience is not good news, for the following two reasons:
- The price difference between Telecom and its competitor’s products is not large enough to encourage the average consumer to change. Only customers who are seriously disgruntled with Telecom’s service or who are informed and interested in new technology will be motivated to change suppliers on a service as critical as voice.
- No one from Telecom or WorldxChange would tell Nicol why there was a price differential between ‘rural’ and ‘urban’. Yet informing contact centre agents so that they can explain basic regulatory decisions is surely part of delivering good customer service in 2008.