By PETER GRIFFIN
Broking firm and telecoms analyst ABN Amro expects TelstraClear to appeal against the Commerce Commission's pricing guidelines for Telecom residential services TelstraClear is seeking to wholesale to its own customers.
The commission's draft decision gives TelstraClear a retail price minus 2 per cent discount for price-capped residential line access
and local calling, but ABN Amro expects it to seek a discount of between 18 and 25 per cent.
TelstraClear wants the best possible wholesaling deal from Telecom so it can sell more telecoms and internet services to the residential market, where it has no direct access outside of Wellington, Christchurch and Kapiti.
"Not surprisingly, TelstraClear is unimpressed with the 2 per cent discount on basic access, and is likely to appeal if unchanged for the final determination," says an ABN Amro analyst report.
"TelstraClear will argue for a discount in the 18-25 per cent range."
But ABN Amro predicts only a small increase in the discount once the final decision is given in June.
"We do not expect the discount to change that significantly, but would not be surprised if the final determination increases the discount slightly, possibly to around 5 per cent."
TelstraClear can take advantage of a 16 per cent discount on "related and bundled services".
But Telecom is required to deliver the services only outside metropolitan areas.
ABN Amro said Telecom's regulatory risk had diminished since the commission recommend against fully opening its network to competitors.
The Telecommunications Users Association last week presented Members of Parliament with a glossy booklet titled "Telecom and its local loop stranglehold".
In effect, the booklet is a last-ditch effort to put pressure on Communications Minister Paul Swain to reject the commission's report on unbundling.
"The Commerce Commission's recommendation would have us believe that Telecom will voluntarily embrace competition," Tuanz says.
"Sadly, that sort of belief is defied by 15 years of commercially-driven behaviour to the contrary."
Tuanz outlined several "myths" around unbundling - the perception that wireless broadband technology eliminates the need for unbundling and that building an alternative cable network is the best challenge to Telecom's dominance.
"How can growing the market be bad for an incumbent reaping nearly 70 per cent of revenues from the contestable voice and data market?" Tuanz asked in the booklet.
The entire booklet can be downloaded from the Tuanz website.
