Internode enters fixed voice business

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Internode enters fixed voice business

Banks on call costs because access fees are “margin negative”.

Internode hopes to recoup the money it will lose on monthly access line charges on its newly-launched analogue telephone service via voice call costs.

The ISP yesterday unveiled Nodeline, a standard telephone service with a monthly line rental fee of $29.95 with 20c untimed local calls, national calls for 15c per minute and fixed-to-mobile calls for 29c per minute, with no flagfall.

Product manager Jim Kellett said Internode was hoping to offer the service to the two-thirds of sign-ups that currently rent a copper line "from another company".

"We figured that [company] might as well be us," Kellett said.

The other advantage being touted - at least in forums - is that it will allow Internode customers to have their fixed line and broadband costs on the same bill for the first time.

With a churn fee of $39 for customers with an existing fixed line connection, Internode has essentially put a price on Telstra pain prevention.

But Kellett acknowledged it could also be challenging for Internode to make money from the service.

"There's a negative margin on the monthly access line and only modest margin on the call access charges," he said.

"The biggest chunk of most home phone bills is fixed-to-mobile and then long distance call costs.

"We've sharpened these prices as much as we could get away with, but the service as a whole isn't something we're doing as a great big money spinner."

Although Nodeline is only available to residential customers, there are plans to launch a business service in the second half of 2009.

The ISP is also working on bundled broadband and fixed line plans but could not reveal when these will be made available.

Managing director Simon Hackett also said in a forum post that getting Internode's systems to interface with Telstra's had been challenging.

"Interfacing to Telstra to do this one required a whole new set of interfaces to be built and tested," he said.

"And, to add some more challenge, the Telstra interfaces got changed under us by Telstra part way through the process".

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