Telecom and TelstraClear reach interim deal on interconnection

By NZPA

Thursday 6th June 2002

Rival telcos Telecom New Zealand and TelstraClear have reached an interim agreement on terms for the vexed issue of interconnection.

Telecom and TelstraClear said in a joint statement yesterday that as a result of the agreement, TelstraClear has withdrawn its proceedings from the High Court in Auckland.

TelstraClear chief executive Rosemary Howard told NZPA the terms of the agreement were confidential but "it's a very good thing we've reached things commercially".

The agreement stands until the Telecommunications Commissioner makes a final decision on interconnection and pricing later this year, if he accepts there is grounds to hear the dispute.

Both telcos have applied to the commissioner for a decision on interconnection prices. The interim agreement allowed for prices to be backdated to today.

In May TelstraClear sought a High Court injunction to force Telecom to activate links between the two networks.

However, Telecom said TelstraClear was deliberately underpaying on a standard interconnection rate, amounting to a shortfall of about $40 million still owing.

TelstraClear, known as TelstraSaturn until late last year, has networks in major and provincial cities, but Telecom has New Zealand's only nationwide fixed-line network.

TelstraClear buys capacity from Telecom to provide services where it has no coverage.

Telecom's Australian unit AAPT recently reached an agreement with Telstra on wholesaling and interconnection.

Telstra and pay TV operator Austar bought Clear Communications from British Telecommunications late year as part of its plans to provide a stronger challenge to Telecom.

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