National broadband providers Internode and iiNet have cried foul with regards to a massive price cut unveiled yesterday by Telstra’s BigPond internet service provider division on its broadband plans.

BigPond slashed the price on its top-speed 200GB plan by half from $179.95 per month down to just $89.95, dramatically undercutting the prices of similarly rated plans at Internode, iiNet and others.

A number of readers immediately questioned yesterday whether Telstra was planning to pass on the price cuts to its wholesale customers so that retail customers like Internode, iiNet, Optus and others would receive similar pricing from Telstra’s wholesale division as BigPond did.

“We are in discussions with our wholesale customers regarding their pricing,” said a Telstra spokesperson this morning. “Lower broadband prices and increased value for money are great news for customers, with our new offers a direct response to the very high level of competition in the broadband market.”

But that answer was not good enough for Internode, with a spokesperson for the ISP saying this morning that it would amend its existing complaint on Telstra prices to the Australian Competition and Consumer Commission to include Telstra’s latest pricing change.

Internode general manager of Regulatory and Corporate Affairs John Lindsay said BigPond’s price cuts provided additional evidence of Telstra using its monopoly position to limit competition, and that Internode would now await a response from the ACCC.

“In the meantime, Internode continues to sell price-competitive services on its own broadband infrastructure,” he said.

Delimiter has been unable to contact an iiNet spokesperson to get the ISP’s view on the situation. However, the group’s chief regulatory officer Steve Dalby told ARN today that BigPond’s move was “uncompetitive” and that Telstra’s wholesale prices were “artificially high”, with retail prices being below wholesale pricing.

It’s not the first time a brouhaha has erupted in Australia’s broadband market over Telstra wholesale prices. As far back as 2001 Telstra was wrangling with the ACCC and other telcos over the issue – and the problem has continued to plague the big T since that time.

Image credit: Michal Ufniak, royalty free

Related posts:

1. BigPond massively cuts broadband plan costs
2. Telstra declines “public battle” with customer Internode
3. Telstra playing favourites, Internode claims
4. Internode cuts terabyte pricing by $30/month
5. Telstra ‘price squeeze’: Hackett slams ACCC inaction

1. Juha
   Posted 26/07/2010 at 2:50 pm | Permalink | Reply

   Oh woah… is that the latest 3G iCalculator? Very cool.

2. Matthew Hatton
   Posted 26/07/2010 at 2:53 pm | Permalink | Reply

   I guess my question is, do these cuts apply to both their retail ADSL and ADSL2+ plans, or is it just the latter?

   If it’s the latter (even only most the latter), they can go jump. Telstra is the only ADSL2+ I could get at my house because none of the other ISPs have bothered to serve my area. Bring on pricing that makes Telstra (finally) a possible option.

3. Pete
   Posted 26/07/2010 at 2:58 pm | Permalink | Reply

   Hoovering up customers before NBN kicks in and they move folks over to NextG, eh? Sneaky move is sneaky!

4. Henry
   Posted 26/07/2010 at 3:46 pm | Permalink | Reply

   Could some one plaese answer this

   does internode and its wholesale arm agile have the same boss in charge of both if so

   Then why is it ok for internode to undercut a competitor on its agile network for example look at empcom prices compared to internode.

   isnt internode doing the a similar thing to what its complaining about telstra

   • Pete
     Posted 26/07/2010 at 4:15 pm | Permalink | Reply

     Yes, Internode and Agile are both privately owned by the same person. Why is it OK for them to undercut? Could be a number of reasons involved here. The price they’ve negotiated with backhaul providers is one that the providers won’t offer others. There’s no room on existing systems so new systems have to be brought in for ‘newer’ providers. Even simpler, is that no one’s challenged it via the ACCC yet (and realistically, if another provider is being unfairly competed out of the segment you indicate, and they don’t take it to ACCC, it’s their own fault)

     • Henry
       Posted 26/07/2010 at 4:39 pm | Permalink | Reply

       Hi Pete

       Thanks for the answer ,

       p/s

       Just in case if any one thinks no i dont work for empcom ,, i was just browsing the plans

5. Tezz
   Posted 26/07/2010 at 4:05 pm | Permalink | Reply

   I would suggest that iiNet and Internode take a drive out of the metro areas and take a look around, I think they might be shocked to realise they have more or less not coverage at all. I would happily use either of their services, unfortunately the only telco that has supplied me with DSLAMs in the local exchange is Telstra.

   Instead of complaining about the wholesale sales price, maybe iiNet and Internode could spend some time looking at installing DSLAMs in populated regional areas instead.

6. Pete
   Posted 26/07/2010 at 4:13 pm | Permalink | Reply

   Did a whole bunch of people recently have brainfade? There’s not been a level playing field in Australia telco for over 35 years. Well, until the last couple of years anyway. That’s why the other telco’s aren’t ‘out of the metro’ areas yet. One can remove the artificial barriers put in by Telstra, but that doesn’t magically mean money starts falling from the sky so competition goes in everywhere. Compound on top of this the pending NBN, and only a corporate idiot would be spending huge $$ right now putting custom DSLAMs around the country.

   • Tezz
     Posted 26/07/2010 at 8:08 pm | Permalink | Reply

     Pete, a couple of points.

     Deregulation in the Australian telcommunications market occurred in 1982, that’s 28 years ago, so am I surprised that it wasn’t a level playing field even 30 years ago? Not really considering Telecom was the only player in it.

     As for the installation of DSLAMs out of the metro areas of capital cities, it is happening, there is a whole host of DSLAMs from a variety of providers in a couple of exchanges not far from where I live. But these are being targeted in exchanges where there is a lot of business customers, not residential. And they have all been there for quite a while so it’s not as if this is recent investment.

     For interests sake I live on the Central Coast, in a suburb (and I understand exchanges cross suburb lines but it gives you a ballpark guesstimate) that according to the 2006 census has 9000 people, and that number is growing and has been growing. And that’s ignoring any recent estimates on the population increase that is going to occur locally here in coming years. In the words of Telstra other providers are “cherry picking” the exchanges they go to and ignoring residential customers out of major metro areas, as someone who lives in an area ignored by other providers this price drop actually makes ADSL2+ a viable option.

     And no, I don’t work for Telstra, or iiNet, or Internode.

7. Sean
   Posted 26/07/2010 at 4:58 pm | Permalink | Reply

   3rd party ISP’s do not have the resources to compete with Telstra at the wholesale level. It costs on average $150,000 to install one ISAM unit to compete with similar infrastructure in a typical Sydney suburb (most suburbs would require 3-4 ISAM cabinets). Plus that is assuming Telstra would even agree to allow a 3rd party ISP to install their cable in Telstra’s ducts which they won’t. Such costs would quickly bankrupt a Tier 2 ISP.

   The NBN can’t come soon enough.

   • Pete
     Posted 26/07/2010 at 5:01 pm | Permalink | Reply

     Know what you mean, Sean. I’ve had the TasNBN fibre outside my front door for over a year just waiting for stupid paperwork to clear… ARGH! ;)