Rivals slate Telecom plan for exchanges

CallPlus says Telecom's plan to establish thousands of roadside exchanges has made a mockery of the Government's move to force the company to open its network to rivals.

Telecom today announced a ramp up in its plans that will see over 2000 roadside exchanges deployed over the next two years.

"This is a major blow for its competitors' investment plans to place cabinets in exchanges," CallPlus chief executive Martin Wylie said.

"By deploying cabinets on the roadside Telecom will effectively cut-off customers from the exchanges, thereby stranding any equipment that competitors have deployed and making unbundling the local loop redundant."

CallPlus estimated half of its customers would be affected, making the business case for competitors to put equipment into Telecom's exchanges uneconomic in most cases.

Telecom would hope most New Zealanders would take the view it was good news the threat of competition had forced Telecom to invest, Mr Wylie said, but the action meant people would continue to rely on a monopoly network and ultimately would pay higher prices.

"It raises some serious questions about Telecom's behaviour and claims from the new management that their attitude to competition has changed."

Telecom announced two appointments today which it said would help accelerate the momentum of its operational separation programme forced on it by the Government.

Chief operating officer technology and enterprises, Mark Ratcliffe, was appointed ceo-designate of its network business Access Network Services (ANS).

ANS would go live on March 31, next year the date by which the operational separation of Telecom becomes legally enforceable.

The unit is charged with delivering equivalent network access for access seekers and Telecom's retail unit.

Matt Crockett was appointed Telecom Wholesale chief executive and a new member of the executive team, reporting directly to Telecom chief executive Paul Reynolds.

Telecom sent industry and the Commerce Commission its plans and timetable for installing fibre to thousands of new roadside network nodes, and associated work, over the next three years.

It said the programme would shorten the copper connections across the network and deliver faster broadband.

Mr Wylie said Telecom, the commission and industry had worked for 18 months on how to quickly improve access to the network and a final determination was made this month.

"With the ink still drying on the document, Telecom's move makes a mockery of the commission's determination," he said.

He said Telecom was claiming it only had resources to open 15 exchanges a quarter but meanwhile had an aggressive cabinetisation plan in their back pocket.

"Installing a cabinet would involve the same sort of effort as unbundling an exchange, it is not a simple exercise. The target was 15 exchanges unbundled per quarter and now Telecom announces over 2000 cabinets in two years.

"A programme of this scale will have been worked upon for over 12 months. Why on earth didn't Telecom disclose their plans? Why have we all wasted 18 months when we should have focused on different issues? There is only one answer – the delay to competition suited Telecom."

He called on the commission and the minister to act quickly to ensure others got access to the roadside cabinets on the same basis as Telecom.

The announcement of the charges for wholesale broadband due on December 5 would be even more critical for competitors, he said.

"If LLU (local loop unbundling) plans are slowed then competitors will rely more heavily on wholesale broadband in the interim."

Enhanced broadband, which supports voice and real time applications, needed to be delivered earlier, Mr Wylie said.

- NZPA