Criticism
While there are now many competitors in the cellular, toll-call and internet markets, Telecom continues to be criticised for using its status as a former general monopoly to charge high prices whilst providing, in some people's opinion, poor service. Prices have dropped as competition in the broadband market has increased. Despite Local-loop unbundling, it has proved difficult for other companies to establish residential services due to Telecom’s former control of local loop services. Telecom has also leveraged its control of residential services to establish the country’s largest ISP, Xtra.
Competitors have alleged that Telecom engages in unfair practices to prevent them from gaining ground, for example by reselling broadband capacity to Xtra at lower prices than to other ISPs.
In July 2005, two dozen Internet service providers formally complained to New Zealand's Commerce Commission via a letter. Notably absent from the list of signatories were Telecom's ISP, Xtra, and several ISPs owned by its main competitor, TelstraClear.
On 1 February 2007 the Consumers' Institute gave its "supreme ass award" for bad products to Telecom for its Xtra broadband service, Consumers Institute executive director David Russell claimed that since Telecom "unleashed" its broadband speeds, the institute had been "inundated with complaints of slower speeds and frustrating cutouts".
Telecom has been given the Roger Award more than once, in 2004 and 2007 - and only the second company awarded as such, with the defunct TranzRail being the first.
Read more about this topic: Telecom New Zealand
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