The findings of the Telsyte report on broadband pricing have been contemptuously dismissed by Telstra BigPond managing director, Justin Milne, who questioned the underlying methodology on which it was based.
The report’s central contention — that the average price of a residential ADSL plan had fallen by just 0.79 per cent since the sub-$30 broadband price wars of February — was an ‘utterly absurd’ conclusion, according to Milne.
“They’re certainly not basing it on any data,” he said. “The report is based on supposition, interpretation and intelligent guesses — so I wouldn’t give it much credibility.”
Milne said the jury was still out — as far as Telstra’s attempts to examine broadband customer behaviour were concerned — because the company only had one or two months of data upon which to base findings. He said that every other ISP in Australia was in the same position.
Pacific Internet managing director, Dennis Muscat, acknowledged the contribution the cut in broadband prices had made to the industry but said the $29.95 price point was problematic.
“[Pacific Internet] hasn’t gone down to $29.95 because we believe that price point isn’t legitimate in the sense that it relies on people running into excess charges,” he said. “We think, ultimately, that once a residential customer sees their first bill the relationship with their ISP will sour.”
Milne also contested the Telsyte report’s finding that the average price of an ADSL plan for SMEs had only decreased by 17.22 per cent.
Telsyte managing director, Shara Evans, said ADSL pricing was a minefield and that customers could lose their shirts by rushing in to sign residential plans with low usage allowances.
Milne said this was wrong. Telstra was upfront in the body copy of its advertisements as to exactly what customers got for their $29.95 entry-level plan, he said.
“We tell people what they can [download] for 200MB and they understand that’s what they’ll get for their money,” he said. “If they use more they can either choose to pay the excess or migrate up to a higher usage plan,” he said.
Muscat disagreed, and said that Telstra could be as transparent as it liked in regards to fee disclosure but the fact remained that entry-level plans were “traps for young players”.