Vodafone accuses Chorus of cynical tactics
Broadband prices could be on the rise from July.
Network company Chorus will increase the wholesale price of its ultrafast broadband (UFB) service that provides 100-megabit downloads and 20Mbps uploads by $2 a month, to $45, Vodafone said.
Vodafone New Zealand chief executive Russell Stanners wrote to a select committee accusing Chorus of engaging in ‘‘bait and switch’’ tactics over the price rise.
It looked like a ‘‘cynical’’ attempt by Chorus to lock in higher prices for the service before it became the possible anchor product for UFB price regulation in 2020, Stanners told Jonathan Young, the chairman of the economic development, science and innovation committee.
Chorus had encouraged internet providers to market the 100/20Mbps service as their ‘‘main consumer product’’, Stanners said.
Vodafone NZ – which put a possible stock exchange float on the back-burner last month – would have to absorb the price increase or pass it on to customers, he said.
Spark spokesman Andrew Pirie said it shared Vodafone’s concerns. ‘‘We argued reference pricing from 2020 should be based on prices in 2017 to avoid the potential for exactly this sort of activity,’’ he said.
But Chorus spokesman Nathan Beaumont said the price rise would only bring its wholesale prices into line with other UFB network operators, and with what Chorus was able to charge for the service under its contract with the Crown. Vodafone questioned that.
Beaumont said if internet providers chose to pass the price increase on to consumers that was ‘‘entirely their decision’’.
‘‘With more than 80 internet providers to choose from, any consumers who do not feel they are getting appropriate value should look to shop around as there are many great offers in [the] market at the moment.’’
Stanners said the wholesale price rise was coming as installation times for UFB ballooned out.
‘‘Poor planning by Chorus has caused a surge in delays, leaving thousands of our customers waiting months for their fibre connection,’’ he said.
‘‘We are trying to rebuild trust with consumers in this challenging environment, but another significant price increase takes us back to square one.’’
The Telecommunications Users Association (Tuanz) has proposed a 1-gigabit service should instead be the anchor product for ultrafast broadband price regulation from 2020.