Telecom bats back $57.6m Clear offer

By CHRIS BARTON, IT editor

Clear Communications has offered a $57.6 million olive branch to Telecom to settle a bitter row over interconnect payments. But the offer has been rejected.

The companies have been at loggerheads since last year's $35 million interconnect agreement expired at the end of September.

Clear says Telecom is trying to raise interconnect payments by 70 per cent, and has threatened to cut off its access to Telecom's network.

Telecom says Clear owes it $19 million in unpaid accounts.

The latest offer by Clear is a minimum of $4.8 million a month paid in advance to cover both interconnect fees and wholesale services.

Interconnect payments are like tollgate charges - levied when traffic passes between networks.

"We're trying to put Telecom in a zero-risk position so we can get on with running the business," said Clear corporate affairs general manager Kevin Millar.

Telecom spokesman Andrew Bristol said the company was continuing to negotiate.

"We would like to reach agreement at a fair market price, as we have with TelstraSaturn and Vodafone. Clear is not paying market rates and would appear to want preferential treatment."

He said Clear was still "millions of dollars in arrears", and continuity of supply was "an issue between Telecom and Clear".

The Clear offer includes provisions to cover increased traffic volumes and an arrangement for Clear to pay more as a result of a subsequent settlement. Mr Millar hoped the impasse would be bridged once the Telecommunications Bill was passed.

The bill, which is awaiting changes to be introduced to Parliament, by supplementary order paper, sets down new rules for interconnect payments using the "TSLRIC" cost-based pricing system.

The methodology, which uses international benchmarking of prices, is expected to cut interconnect payments from the current 2-3c a minute to 0.5-1.5c. The bill also allows for a commissioner to settle disputes.

Mr Millar said Clear had presented Telecom with 300 pages of correspondence regarding its disputed invoices - including admissions by Telecom billing staff of overcharging.

He would not comment on rumours of the sale of Clear to Telstra except to say that the company's parent BT had indicated there would be no firesale. Mr Millar said Clear revenue was growing at 20 per cent and the company was on track to post a net profit after tax of between $27 and $30 million for the year ending 31 March 2002. Growth was coming primarily from the small to medium business market and local broadband services for businesses.

Mr Millar said although Clear was happy with its resale agreement for Vodafone mobile services, it was talking to new entrant Econet, which is due to start offering a competing mobile network late next year.

"We're considering a range of options - everything from taking an equity position to becoming a virtual mobile network operator."