Rebate for DSL outages the right move, analyst says

Telecommunications analyst Paul Budde says Telecom New Zealand Ltd. could learn a lesson from Telstra Corp. Ltd.'s decision to reimburse customers in Australia whose DSL (Digital Subscriber Line) service was cut for 12 hours last week.

Telstra's network was down across New South Wales state and parts of the Australian Capital Territory and involved tens of thousands of customers, all of whom are eligible for a 10 percent rebate on this month's bill.

Telecom NZ's general marketing manager Kevin Kenrick says Telecom has a sliding scale of responses depending on the price point of the service and the expectations that contains.

"Obviously dial-up customers are going to have a different level of service to a managed virtual private network solution with high service level agreements."

Kenrick says Telecom will judge any customer requests for compensation on a case-by-case basis should the need arise.

"We're learning about what service levels are appropriate for each offering and that's an ongoing process."

Last week Telecom suffered a major outage on its DSL network, cutting off customers in Wellington and the South Island for several hours. Problems with Telecom's usage meter and with quality of service issues have plagued the company since it launched JetStream in 1999 and users have consistently blamed the pricing model as being prohibitive to real use of the service.

Budde says Telstra recognizes broadband is the future of telecommunications.

"They've realized that instead of mobile technologies, like 3G, being the future, it's in broadband instead. Finally they're getting serious about broadband and have invested $A1 billion (US$540 million) so the other telcos are paying attention as well."

Budde says Telecom has not realized this and is yet to put serious effort into broadband initiatives, although he hopes this is changing.

"There's no real competition to spur them on. You need competition on the network, not between networks as TelstraClear is proposing to make it work. Telecom will be reluctant to move towards allowing more competition on its network because it will be cannibalizing its own high-value customer base in the form of its over-priced public data networks, like ISDN and leased line business."

Budde says Telecom can ill-afford to lose revenue at a time when it's posted its first loss.

Telecommunication Users Association (TUANZ) chief executive Ernie Newman says he would rather see money spent on ensuring the service worked than have customers reimbursed for outages.

"Surely in this day and age such problems should be a rarity on the network?"

Budde says New Zealand is falling behind Australia in the broadband stakes -- despite being on a par with it only a year or so ago.

"Since then with Telstra jumping on the broadband wagon in such a big way driving take-up of the service, New Zealand has fallen further and further behind."

Telecom claims to have 20,000 residential users signed up with JetStream while Telstra in Australia is claiming to sign up 20,000 customers per month. Overall, including business customers, Telecom has 45,000 DSL users.

Budde says the argument that lack of content is keeping customers away is spurious and is simply an excuse on the part of the telcos.

"There isn't any content anywhere in the world. There isn't more content for broadband in the U.S. or in Korea, but they have much higher take-up rates than New Zealand. It's an argument Telstra tried to make as well in the past and it just doesn't stack up."

However, Budde believes having government support for broadband is a vital driver in the New Zealand market.

"Without competition we need to find a driver somewhere else and the government is doing a marvellous job at that -- Paul Swain (Minister of Communications) and Prime Minister Helen Clark are both championing broadband and forcing the telcos to move forward."

Budde believes the New Zealand government is more progressive than Australia's, but that it will still cost around $NZ1 billion (US$464 million) to get all of New Zealand on to a broadband platform.

Join the newsletter!

Error: Please check your email address.
Rocket to Success - Your 10 Tips for Smarter ERP System Selection
Keep up with the latest tech news, reviews and previews by subscribing to the Good Gear Guide newsletter.

Paul Brislen

PC World
Show Comments

Brand Post

Most Popular Reviews

Latest Articles


PCW Evaluation Team

Andrew Teoh

Brother MFC-L9570CDW Multifunction Printer

Touch screen visibility and operation was great and easy to navigate. Each menu and sub-menu was in an understandable order and category

Louise Coady

Brother MFC-L9570CDW Multifunction Printer

The printer was convenient, produced clear and vibrant images and was very easy to use

Edwina Hargreaves

WD My Cloud Home

I would recommend this device for families and small businesses who want one safe place to store all their important digital content and a way to easily share it with friends, family, business partners, or customers.

Walid Mikhael

Brother QL-820NWB Professional Label Printer

It’s easy to set up, it’s compact and quiet when printing and to top if off, the print quality is excellent. This is hands down the best printer I’ve used for printing labels.

Ben Ramsden

Sharp PN-40TC1 Huddle Board

Brainstorming, innovation, problem solving, and negotiation have all become much more productive and valuable if people can easily collaborate in real time with minimal friction.

Sarah Ieroianni

Brother QL-820NWB Professional Label Printer

The print quality also does not disappoint, it’s clear, bold, doesn’t smudge and the text is perfectly sized.

Featured Content

Product Launch Showcase

Latest Jobs

Don’t have an account? Sign up here

Don't have an account? Sign up now

Forgot password?