Telstra's level playing field

Tomorrow we collect the keys to our new house, and as the phone is essential for work, my wife arranged a new phone line through Telstra. When she signed up for the line, they also offered her the chance to instantly sign up for their Bigpond ADSL broadband service. She declined Telstra's helpful sales offer. Our current home ISP is Netspace, and we chose them because (arguably) they offered the best speeds and download limits for the money at the time.

When we contacted Netspace, they were unable to get any information about the new line from Telstra, and Telstra even informed them (incorrectly I hope) that it was not a Telstra number. Due to reliance on Telstra, Netspace will only be able to begin connection of our ADSL once Telstra actually admits the line exists - whenever that might be. We can already phone the number, so you'd think it would be in their database. It's a new exchange in a mainly commercial area, you'd hope things would proceed smoothly? Apparently, it's not in the database they use to answer enquiries from external companies.

So, where's the level playing field for ISPs? Netspace can't even begin the connection process, but BigPond can start right away - and it's being marketed to you at the moment you connect your line. Similar issues apply to using an alternative long-distance carrier: most people will sign up with Telstra because it's quick and easy. I'm guessing that most people who want to get a phone line, or an internet service, don't want to wait a long time for it to be connected.

Netspace have been an adequate provider. Their service so far has been fine, though I am not thrilled with they way they terminated their 'unlimited' service when I was barely two weeks into my subscription to it, replacing it with a capped plan. They did this to everyone, but they must have known they would do this before they even sold me the service. Why were they selling a service they planned to immediately cancel? Does look a little strange doesn't it? I suppose they will do anything they can to make a sale, and no wonder when you look at the handicap they have to operate with compared to Bigpond.

Netspace's replacement capped service is still competitive on price/performance, but when you consider the way the cap is split into peak and off-peak usage, it's not quite as good as it sounds - but I see the logic in the system, and even with the split it remains fair value.

In contrast, Bigpond's offerings are very expensive indeed, and you have to wonder why they can charge more than their competitors and keep market share? I don't believe it's because of their quality of customer support, because it's not noticably different to anyone else's. Sure, you can call Telstra 24 hours, but try calling their broadband support line at 4am in the morning and see what sort of answers you get: they might be of the 'its broken and nobody will be in to fix it until 7am' kind.

If the playing field isn't level now, does the government really imagine it will be after the sell off? My guess is that Telstra will simply swallow fines and penalties for anti-competitive behaviour as part of its business strategy, as it has done in the past. As for whether the shares are a good bet, it will depend on who they get to run the company in the future. With good leadership they could go up and up ... or they might not. However much they are milking it now, the Australian domestic phone business doesn't offer much potential for business growth, and they will need serious growth to push share prices up.

posted by Peter Wake @ 4:00 pm