Telecom denies MP3 claims

By MICHAEL FOREMAN

Telecom says reports that it has entered into a partnership with local digital music website MP3.net.nz are "overstated."

Telecom spokesman Glen Sowry confirmed that its internet service provider Xtra had bought a 5 per cent stake in MP3.net.nz for $22,000 six months ago.

But the transaction had taken place only to secure content on Xtra's website, he said.

The deal had been considered too small to be worth announcing to the Stock Exchange, said Mr Sowry, and did not represent a strategic partnership.

MP3.net.nz supplies digital music from around 200 local artists in the MP3 format over the internet.

Once downloaded, MP3 files may be played on PCs or purpose-built portable players, which offer close to CD quality.

Free MP3 services have proved hugely popular.

ACNielsen eRatings.com says more than 50,000 New Zealanders use the leading international service Napster every month.

Entertainment lawyer Chris Hocquard, founder of the MP3.net.nz site, said he was meeting Xtra today to clarify the situation.

But he agreed that the Telecom payment had related to his supplying chart information to the Xtra website.

"They asked us to do something that would have cost us money, and we said, 'Fine - if you pay for it'."

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