Chorus price cut is ‘a good start’
Spark says a decision by Chorus to cut the wholesale price of gigabit ultrafast broadband connections next year is a ‘‘step in the right direction’’.
However, spokeswoman Michelle Baguley said the wholesale price of fibre-optic broadband remained ‘‘far too high’’ and the retail prices Spark charged didn’t ‘‘allow for anything like an acceptable margin’’.
Network company Chorus will cut the wholesale price of its gigabit ultrafast broadband (UFB) service from $65 to $60 in July with a further drop to $56 in July 2020.
The wholesale price is the fee that retailers such as Spark, Vodafone and Vocus need to pay Chorus for each connection.
A deal with the Government announced last month will mean Chorus can increase the price of its 100 megabit-per-second service by $1, to $46, from July.
That means there will be only a $14 differential in the wholesale cost of 100Mpbs and gigabit connections from July.
Spark increased the price of its copper broadband services by $5 a month in October and chief executive Simon Moutter said earlier this month that retail price rises for UFB were in the pipeline.
Baguley said it was pleased Chorus was reducing its prices to be "more in line with other fibre providers for their gigabit plans".
‘‘However, the vast majority of our fibre customers are on other plans, most of which were subject to annual price increases from Chorus earlier this year and will see price increases again next year,’’ she said.
‘‘It’s a step in the right direction but we would like to see further action on some of the more popular plans if this is intended to make a significant difference to Rugby World Cup viewers as claimed.’’
Currently, it is expected the price Chorus can charge for UFB after 2020 will be anchored on price regulation of its 100Mbps product.
However, the Telecommunications Users Association and InternetNZ have argued gigabit broadband would make a better anchor product for price regulation. Chorus said the number of UFB connections it supported had now topped 500,000.
In September, Crown Infrastructure Partners said the total number of UFB connections provided by Chorus and other local fibre companies combined had reached 605,000.