Negotiations for unbundled fibre could see broadband increase by $40/month

Unbundled fibre in New Zealand
Friday, March 29, 2019

 

New Zealand’s heavyweights in the telecommunications industry are negotiating the future of unbundled fibre broadband in New Zealand. 

Vodafone claim that their plans to bring unbundled fibre broadband to NZ have hit a snag as Chorus threatens to push up broadband pricing by $40/month

The NZ Herald reported that telecommunication bosses are fuming at Chorus’ proposed price to unbundle its network – or open it up so internet retailers can get more control over the service they offer, and how they’re priced by the public. 

How much will fibre unbundling cost in NZ?

Chorus is proposing a $28.70 monthly charge to cover access to fibre between the premise and the splitter – the point where shared fibre splits into the individual connections that go into each customers’ home or office.  It would also charge retailers $200 a month to access ‘feeder fibre’ from each splitter, which can connect up to 16 customers. 

Vodafone says it could mean the average customer pays $40 more for broadband per month than they do today. 

The Herald reported that last month, Vodafone NZ boss Jason Paris indicated that he wanted the “low $20s” as a starting point for what is likely to be an extended period of horse-trading, and claim and counter-claim until the two sides agree on a price - or the Commerce Commission steps in.

Paris said: "The proposed pricing by Chorus would obstruct fibre unbundling from becoming a reality in New Zealand. Our estimates are the average customer would pay up to $40 more per month for unbundled fibre compared to what they pay today.”

Mark Callander, the head of Vocus NZ, which includes Orcon and Slingshot in its stable, called the proposed priving “ridiculous”.

What is fibre unbundling?

Unbundling is when retail Internet Service Providers (ISPs) like Vodafone, 2Degrees, Spark or Vocus, put their own network technology on Chorus’ network so that they can manage their whole service to the customer. This gives the ISP more control over what services they offer and how much they charge for them. 

An update to Telecommunications Act, which comes into force next year forces Chorus to unbundle or open up its network, but does not specify pricing. 

 

 

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