11 February 2000

Telstra moves to cut data costs - Business QLD

Telstra is going after the SME e-commerce market with promises of cheaper prices for data lines.
Karrina Lawrence, Telstra Business Solutions spokeswoman, says the company will introduce more affordable ISDN (Integrated Services Digital Network) products for SME customers next month. But she is tight-lipped on details.

“The product and prices will tip the ISDN market on its head. There is the perception that these lines are too expensive for some businesses but prices will fall,” Lawrence says.

Lawrence says telecommunications companies are chasing the SME market and Telstra aims to sell 400,000 ISDN services this year.

“There are more than 1 million small businesses in Australia providing 3.5 million jobs and at the moment most of them spend more on their stationary than communications,” she says.

Brisbane technology firm Braintree Communications has developed a “one-stop box” providing cheap voice and data services to banks and retailers.

Peter Mason, Braintree Communications director, says the system will be expanded to include non-financial areas such as fire alarms, security and gambling machines.

“I expect to see it expand very rapidly. It just plugs into the wall like a modem and you have a great gateway to the internet with the ability to use the phone, internet or EFTPOS at the same time.”

Mason says the system offers faster and more secure EFTPOS services. Other applications, including video, are being developed.

“We have been developing the system for 12 months and were ready to release it last year but the banks’ attention was taken up with Y2K.”

The Australian Telecommunications User Group (ATUG) attributes high access costs for data lines to a lack of competition among carriers.

“Competition between telcos such as Optus and AAPT has been confined to the long-distance and mobile call market and has had little impact on the data line market,” says ATUG vice-chairman Tom Amos.

Amos says access lines cost $240 a year, $100 more than residential lines.

Christine Groh, Telstra’s principal ISDN manager, admits competition in the sector is weak but says prices compare well with standard fixed-line services.

“For example, at $50 per month, customers can afford two digital lines suitable for high-speed internet access, file transfer, video and telephony,” Groh says.

“This price range is increasingly attractive to SMEs, which currently pay $40 per month for two standard business phone lines.

“The growth of business from SMEs has been fantastic. Telstra sells 5000 ISDN services per month and the majority are to SMEs.”

Lisa Watts, principal of Brisbane travel and conference agency Ozaccom, rejects the argument that data line access costs are inhibiting e-commerce growth among SMEs.

Watts says e-commerce is a growing share of her business and is satisfied with costs.

“About 30% of our bookings are done online and we organise more than 200 conferences each year so access costs are an important factor,” she says.

“We’ve got a very cost-effective deal through Telstra and are very happy with the price we’re charged.”

Telstra rivals Optus, AAPT and Vodaphone did not respond to Brisbane Queensland’s requests for interviews.


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