Update: Telecom NZ charged $9.42 million for anti-competitive behaviour

Update: Telecom NZ charged $9.42 million for anti-competitive behaviour

The New Zealand High Court has charged incumbent Telecom NZ $9.42 million for anti-competitive conduct. This is the highest recorded fine ever imposed on a telco in the country.

The charge is related to the “data tails” case when retail and wholesale pricing for data was introduced a decade ago. “Data tails” refers to the end of a data circuit that allows Telecom NZ’s competitors to provide data services to customers beyond their own networks.

The New Zealand regulator Commerce Commission found that between 2001 and 2004 Telecom NZ used its strong position in the market to charge overly high prices for wholesale access to its network. This prevented its competitors from offering retail high-speed data services at lower prices.

Telecom NZ is already appealing against the accusation of liability imposed in October 2009. Telecom NZ claims that the “two data tails” breach was technical and unintentional which is the basis of their appeal.

At the Court’s penalty judgment, Justice Rodney Hansen said: “The breach was the result of a deliberate strategy, apparently sanctioned at the highest levels of Telecom NZ, to price data tails at a level that would preclude price competition between Telecom and other telecommunications service providers.”

Rosalie Nelson, analyst from IDC New Zealand explained that Telecom NZ has already undergone an operational separation dividing itself into networks, wholesale and retail units. "I think it is important to note that strong and deep regulatory action has already been taken to prevent and redress these types of issues," said Nelson.

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