Broadband Sales Not Enough for Government

By BATHGATE, Adrian

TELECOM has claimed a victory with the number of broadband connections it had by the end of 2005, but the Government says it has failed to meet its goal.

In its half-year result yesterday, Telecom reported that it had 279,000 residential broadband customers.

Of these, 63,000 were wholesale customers: they took a retail Internet service with another provider, such as ihug.

Toward the end of last year Telecom and the Government were at odds over whether it had agreed to get 83,000 wholesale customers by the end of 2005, an issue that had yet to be resolved. Communications Minister David Cunliffe said yesterday he considered Telecom to have failed to meet this target, though it made an increased effort to promote wholesale.

“The failure to meet the broadband target is one of the factors that we are considering as part of our stocktake of the sector.”

Asked if 63,000 represented satisfactory progress in wholesale, Mr Cunliffe replied: “No, satisfactory would have been 83,000″.

Telecom has about 75 per cent of the broadband market, which industry bodies said reflected a poor wholesale environment.

But Telecom chief executive Theresa Gattung said she expected to see the competitive pressure step up this year, as TelstraClear enters the market, after a deal with Telecom last month.

“Its going to be a big action year in broadband. The combination of our deal with TelstraClear and the Commerce Commission deal is likely to see new offers, prices and speeds.”

Having passed 250,000 residential customers, Ms Gattung said Telecom was “potentially up for setting a new target”.

Telecom now has even numbers of total dial-up and broadband customers, about 340,000 of each.