Contact joins busy broadband market
Contact Energy has entered the broadband market, selling copper-based and ultrafast broadband.
Like My Republic, Vocus-owned Orcon and Stuff Fibre, it is only offering plans with uncapped data, which it has priced from $89.99 a month.
The move by the country’s thirdlargest power firm came without fanfare.
Contact has entered the market despite a forecast by Spark managing director Simon Moutter last month that the broadband market was ripe for consolidation.
The Commerce Commission estimated in its last annual monitoring report that Spark, Vodafone and Vocus New Zealand sold about 89 per cent of fixed-line broadband connections between them.
But Vodafone consumer director Matt Williams said last week that the market was ‘‘intensively competitive’’, with about 86 retailers battling for business.
Contact Energy is offering broadband customers a free modem without the requirement to enter into a fixed-term contract.
However, at the moment it is only selling broadband to its existing electricity customers.
Contact spokesman Jason Krupp said the strategy was to target those customers who preferred bundled services and the ‘‘convenience of dealing with one service provider’’.
Rival power firm Trustpower has built up a significant broadband business, which it now treats as an activity in its own right.
The Commerce Commission estimated in its last annual monitoring report that Trustpower had won 4 per cent of the broadband market, putting it in fourth position behind Vocus NZ, which has responded by starting to selling electricity and gas through the acquisition of power company Switch Utilities.
A commission spokeswoman said the watchdog was aware of comments made by Moutter at Spark’s annual meeting last month, during which Moutter appeared to suggest broadband prices might need to rise.
The competition regulator indicated the comments did not cross any lines.
‘‘New Zealand doesn’t have any legislation that explicitly prohibits price signalling, similar to that in Australia for the banking sector.’’
Contact Energy is selling broadband as a ‘‘bundle’’ to existing power customers.