Telecom's $202 million profit based on capturing the internet.

The Alliance said Telecom's increased profit of $202 million has been on the back of its monopoly over phone lines and its increasing control of internet services and at this rate Telecom will control all access to the internet before long.

'Telecom's profits are not good for New Zealand. At least $100 million of this profit is going to overseas shareholders, directly contributing to our balance of payments crisis, ' Alliance Commerce spokesperson Laila Harré said.

'The only reason that the CEO of Telecom can be paid $36,000 a week is because Telecom's over inflated line charges are just like a monopoly tax on all homes and businesses.

'Telecom's aggressive 0867 number grab to take control of all internet traffic can only look more serious now Rod Deane has admitted Telecom's future is in internet services.

'Telecom says they have created what they call 'New Zealand's internet backbone'. To do this they have broken the back of the Kiwi share by threatening to charge 2c a minute to people not using their lines for internet access. This has shut out competitors such as Clear and has the potential to stifle all competition in internet development in New Zealand.

'Telecom's increasing internet services have been built on the back of its monopoly.

'First Telecom subsidised XTRA, its internet service provider, though a huge an ongoing advertising campaign and it also bundled billing services with its phone billing services.

'Secondly Telecom has used it's control of local lines and control of numbers to tip competition in its favour with local Internet Service Providers.

'Now Telecom has blatantly made a grab for all of New Zealand's internet traffic thought its 0867 number that would charge people for local calls if they don't use their service.

'Meanwhile this government has done nothing to stop Telecom. Their recent suggested changes to the Commerce Act have come far too late and they have ignored legal advice that Telecom is breaching the Kiwishare.

'Telecom's alliance with Microsoft points the way to the kind of monopoly on all telecommunication and internet services that New Zealand is headed for unless Telecom is stopped. Only the Alliance has been consistently committed to doing something about creating real competition in the telecommunications industry,' Laila Harre said.

ENDS

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