Optus download plans leave Telstra flailingAuthor: Lucy...

Optus download plans leave Telstra flailing



Author: Lucy Battersby
Date: 29/04/2010
Words: 398
Source: SMH
Publication: Sydney Morning Herald
Section: Business
Page: 3
TELSTRA'S BigPond is being left behind in a broadband pricing war, with Optus becoming the latest provider to increase download limits without raising prices.

The move has left BigPond as the most expensive provider of high-usage broadband services - at $100 dearer than the market leader TPG for 200 gigabyte-per-month plans.

Nor does Telstra offer unlimited plans, which allow users to download as much data as they like every month. These are offered by Optus, TPG and AAPT, although AAPT's plan is the only one that does not slow down once customers reach 200 gigabytes of downloads.

"We are continually monitoring the market to ensure we are competitive in the market place," the executive director of Telstra Consumer, Peter Jamieson, said yesterday.

"It is not just about prices or included data ... it is about innovation, it is about providing services that meet the needs of a broad range of people."

Mr Jamieson said Telstra would adjust prices whenever necessary.

But industry analysts say Telstra has not kept up with the competition over the years and Optus's latest move has left it further behind. Internode and iinet also recently boosted download data limits.

"At the investor conference [Telstra's chief executive] David Thodey made it clear [Telstra] wants to maintain its broadband market share," said Nathan Burley, a senior analyst at the telecommunications research firm Ovum. "We believe in order to do that it has to cut its fixed broadband prices. [Telstra's] pricing at the moment is above market rates, especially following the Optus reduction."

TPG continues to benefit from its purchase of Pipe Networks, which owns a fibreoptic submarine cable to the US. Owning the backhaul infrastructure allows TPG to charge less, Mr Burley said.

But the fixed-broadband market in Australia had reached saturation point and this was changing the landscape, although the wireless market continued to grow, said a Goldman Sachs JBWere analyst, Christian Guerra. "Operators now face a market-share game as opposed to a market-growth game." Mr Guerra said Telstra would not meet its profit guidance this year because of decreasing market share.

Telstra recently cut broadband bundles by between $12 and $42 per month, but this still left it 20 to 25 per cent more expensive than competitors, Mr Guerra said.

For $50 per month, people can now choose between 25 gigabytes of data downloads per month on BigPond, or 20 gigabytes on AAPT, 30 gigabytes on iiNet, 65 on Primus, 50 gigabytes on Optus or 70 gigabytes on TPG.