RealTime IT News

Telstra Gives Away a Free Kick on ISP Pricing

Telstra has moved quickly to scotch mainstream media reports that it was considering introducing free Internet access through its ISP arm, Big Pond.

The Australian newspaper, the only national broadsheet paper in the country, carried a front page story on Tuesday morning quoting Telstra executive John Rolland as saying the free access model had "established itself in the market", and that internal documents showed it had been considering the model as a way of growing its subscriber base from the existing 350,000 to 400,000 users to one million.

However, a Telstra spokesperson told a reporter from Australian Associated Press later in the day that there were "no current plans" to include a free access element in Big Pond's services.

The spokeswoman also criticised the Australian's use of an internal Telstra memo regarding an experimental broadband network being set up in a suburb of Melbourne called Townline, saying that it had "no bearing whatsoever" on its wider plans for Internet access provided by the company.

The furore comes only days after Telstra dropped its prices for retail Internet access by 20 per cent across all of its consumer products. Both moves were seen as attempts by Telstra to aggressively undercut the 800 other ISPs in Australia, many of whom are its wholesale customers.

Telstra's share price dropped seven cents during the day to AUS$7.37 to be less than 25c above its 52-week low of AUS$7.14, after being above AUS$7.70 a week ago before news of the price cuts was released.