Vocus claims Chorus unbundled fibre pricing unworkable

InternetNZ has called on Chorus and ISPs to sit down and nut out agreement on unbundled fibre pricing

Vocus New Zealand, owner of Slingshot and Orcon, has hit out at Chorus' proposed pricing for access to its unbundled fibre saying it will make the provision of competitive services impossible.

Chorus has proposed a monthly fee of $28.70 for access to the fibre from the splitter to each customer, plus an additional $200 fee per month for connectivity to the splitter. This means that a company will be hit for $200 per month plus $28.70 to serve just one customer connected to a splitter, reducing to $12.50 plus $28.70 if it manages to sign up all 16 customers on a splitter.

Vocus NZ CEO Mark Callander said this pricing was ridiculous. "Chorus have played their hand early and the Commerce Commission will now need to intervene, it’s as simple as that," he said.

His comments were echoed by Vodafone and Spark, Executives of both companies have been reported saying the proposed pricing would make provision of retail services using unbundled fibre uneconomic.

Callender argued that the UFB network had been designed to be unbundled, and ultimately was an asset that the government has helped fund."

“We have to remember that the UFB network was funded thanks to a taxpayer-backed interest free loan,” he said. “So, while Chorus and the other local fibre companies (LFCs) own the network it was on the legislative understanding to be unbundled for the benefit of consumers.”

Callander said that until Chorus dropped the price of access, investment in unbundling would be off the table, and any competition over fibre technology would be snuffed out before it could begin.

"For the sake of innovation, fair competition and the interests of New Zealand’s internet users, we’re appealing to Chorus to reconsider and come back to the table with a sensible price," he said.

"If that doesn’t happen, it’s time for the Government and the Competition Commission to step in. The public has every right to expect unbundled connectivity."

Read more: Chorus to rein in subcontractors following employment law breaches

InternetNZ calls for dialogue

InternetNZ has called on Chorus and ISPs to sit down and nut out agreement on unbundled fibre pricing rather than leaving this to the Commerce Commission.

CEO Jordan Carter said it would be a shame if New Zealand’s Internet users had to wait for the Commission to sort out the issue.

"InternetNZ has been calling for unbundling for some time," he said. "The unbundling of the copper broadband network worked well. It lead to increased investment, lower prices and better services for New Zealanders. Fibre unbundling could be just as good for New Zealand."

He said it was too early for InternetNZ to comment on the fairness of Chorus's proposed pricing.

"We’ll listen to Chorus’s views and the ISPs as we analyse the unbundling proposal in more detail - today, we don’t know enough to take a view on whether Chorus or the ISPs are right."


Read more: Bullish forecasts for Chorus value from L1 Capital, New Street Research

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Tags NetworkingTelecommunicationsVocusVocus GroupChorus

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