In a coincidence of timing, I attended in Auckland yesterday a NZ Computer Society breakfast with the Chief Operating Officer of Telecom as the guest speaker talking on broadband. I suspect if it had been this morning it would be a different presentation 🙂
Anyway the COO spoke about Telecom’s perspective which crudely put is we need to charge business more for broadband so we can invest that in rolling out broadband to rural areas.
Naturally at question time I had a question, and pointed out that Telecom’s top business broadband plan used to be around $29,000 a year and had now dropped to $1,000 and assuming they still make a profit on it, this suggests they were making $28,000 profit *per line* and that would it not be a fair assumption that not all or even most of that profit goes into rural infrastructure. I did clarify I’m am all in favour of profits, but that $28,000 profit per line is why support for regulation has grown.
Now I didn’t expect the Telecom COO to agree with me, but I was amazed at the umm I’ll be nice and call them porkies that came forward. Firstly we were told that prices decrease in the IT sector all the time, over time giving an example of how PCs today are much cheaper than years ago. I then replied and pointed out my figures are not over an extended period of time but are all from 2006 – the decrease happened in one swoop after the Commerce Commission determination.
Then the COO claimed that the top plan had never been that high, was only $1,000 a month or so. Well Telecom’s own webpages listed the $2,400+GST a month plan earlier this year so strike two.
Finally it was then claimed I was confusing the prices for just a broadband line with prices for managed data services which are very costly. But no I wasn’t. The $29,000 a year was the price for one single DSL broadband line, not for a full managed package.
So in the end my question elicited no less than three porkies from the Telecom Chief Operating Officer. Very ironic that the advertised topic for the speech was “Dispelling the myths around broadband”. They mis-spelt “creating”.