Chime settles rental dispute with Telstra

Chime settles rental dispute with Telstra

Chime Communications, a subsidiary of Western Australian ISP iiNet, has settled a long-standing dispute with Telstra over PSTN Terminating Access for data calls.

The two carriers have been embroiled in a debate over the terms of interconnection since late 2000, primarily centred around Telstra's fee to the wholesaler for terminating data calls on Chime's network.

Chime was also protesting the restriction to Western Australia of the existing contract. Over the last 12 months, the ISP has built a substantial wholesale business, supplying over 15,000 dialup ports to customers, which it claims represents 36 per cent share of the total dial port market in WA.

"We believe we've got a winning model and we want to expand it interstate," said Andrew Milner, Chime's managing director.

The settlement was to the satisfaction of both parties. "It was a compromise -- we left a little bit of money on the table and Telstra left a little bit on the table, but it's an acceptable business proposition," Milner said.

He believes the recent issuing of a Part 11B competition notice by the Australian Competition and Consumer Commission to Telstra in relation to broadband prices provided the impetus to get the telco back to the negotiating table. "Whether the ACCC issues a competition notice now or not in relation to our case, their involvement has certainly improved the situation for us," said Milner, adding that the industry watchdog is often unfairly accused of being ineffective.

"Telstra is very good at waiting out the smaller players. Despite what they say, some of their overall corporate policies make them very hard to deal with."

Milner said Internet wholesale is proving a great business, despite the recent epidemic of startup failures. Parent company iiNet has registered a net profit of $1.8 million for the six months to December 31, 2001.

Chime has its sights firmly set on the East Coast. "The strategy for expansion is one of acquisition," Milner said.

The likely candidate will be a retail-based ISP business of substantial size that will give Chime significant inroads into the market, he said.

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