The outspoken chief executive of broadband provider Exetel has blasted a series of plan changes by rival Internode yesterday as a "joke of an announcement", claiming the move represented "desperation" in the face of Telstra's recent attempt to win back market share in broadband.
Internode deleted some 60 of its 78 broadband plans from its roster, drastically simplifying its options and adding several "packs" that could be added onto new standard plans. However, in a fiery post on his blog this morning, Exetel chief John Linton lambasted the changes, claiming the move was "simply the desperation of a bunch of accountants, who say: 'We need more money to pay the bills, but you can't incur any more cost'".
Linton claimed several of the items offered by Internode in its $10 Power and $30 Business add-on packs actually cost the broadband company "nothing", and that it was getting away with charging "the dumber customers for it by pretending it's got some value". "Now, if that isn't desperation, I don't know what is," he said.
"You will see similar attempts by more and more suppliers in the not very distant future," said Linton. "It is part of the ever-encroaching dishonesty in the selling of communication services to residential users that was always a problem, but, thanks to Telstra's efforts over the past two years had become endemic."
Internode has been invited to respond to Linton's claims.
Linton is referring to Telstra's recent marketing push into the broadband area, which has seen it cut plan prices drastically and boost quotas on its offerings, in an effort to make them more competitive in the market. The telco has also introduced a range of bundled offerings with its other product lines, for example, mobile.
Since that time, rivals like iiNet and Internode have sought relief from the Australian Competition and Consumer Commission with relation to the company's new pricing, claiming that Telstra was not making the same pricing available to wholesale customers as it was to its own retail division.
The full extent of the impact of Telstra's fight back will be revealed tomorrow as the telco publishes its half-yearly financial results. However, at its annual results briefing in September, a trend in the area was already visible. In the first two months of the financial year, Telstra added 32,000 fixed broadband customers, compared with a net loss in the previous year. In the same bi-month period, 176,000 mobile broadband customers had come aboard. The company added 608,000 in the past financial year.
In the briefing, Telstra's new group managing director of its Consumer and Country Wide division, Gordon Ballantyne, said Telstra was engaged in a "fight back" effort in the fixed broadband market.
"The 600,000+ residential ADSL customers 'won back' by Telstra obviously came from other ISPs (including 10,000 over two years from Exetel) and it would seem from this joke of an announcement a fair few from Internode," said Linton this morning, claiming providers like Internode were in a tough position as they had grown "fat, dumb and happy" in terms of their retail broadband pricing.