New Zealand l ISP Ihug Ltd. has dropped its Connect residential wireless broadband service after provider Wired Country increased its wholesale pricing.

Despite earlier saying that it would continue to resell the Wired Country service, Ihug posted a note on its Web site on Monday saying it would no longer sell Wired Country services for residential customers.

Ihug"s general manager of networks, David Diprose, says that while Wired Country"s new wholesale plans were workable for business customers, there was no way the ISP could put together a compelling package for residential customers.

According to Diprose, Ihug will instead concentrate on selling the Unbundled Bitstream Service, which is available nationwide over Telecom copper lines. Although UBS is "far from a perfect product", it is improving, he says, and is much more cost-effective for Ihug than reselling the Wired Country service.

He also expects UBS to improve further after the Commerce Commission"s releases its response to a TelstraClear complaint over access to Telecom wholesale services. The Commission"s determination is expected in a couple of months" time.

Ihug also hopes to offer voice service over UBS in the future.

Existing Ihug customers on the Wired Country service will be able to keep their current plans with no change, says Diprose.