Telecom to slash corporate fibre prices in non-UFB areas

21 Jul 2011

According to Stuff.co.nz, Telecom New Zealand intends to slash the price of its existing fibre-optic broadband products from next month, with a particular focus on Christchurch, Hamilton and the other cities in which it did not win contracts to roll out fibre under the Ultra Fast Broadband (UFB) initiative. Going forward, a 100Mbps business connection will reportedly wholesale for NZD380 (USD324.9) a month, reduced from more than NZD600, bringing prices in line with those that all businesses can expect to pay following the completion of the government-approved UFB network.

According to TeleGeography’s GlobalComms Database, Telecom New Zealand’s network arm Chorus was awarded the contract to roll out fibre in 24 ‘candidate areas’, including Auckland and Wellington. The remainder of New Zealand is set to be covered by Northpower Limited (Whangarei), Ultra Fast Fibre Ltd, led by WEL Networks (Hamilton, Tauranga, Tokoroa, New Plymouth, Hawera and Wanganui) and Enable Networks (Christchurch and Rangiora). WEL Networks and Northpower Limited have not commented on concerns that the move might undermine the economics of their own UFB deployments. Enable Networks’ chief executive Steve Fuller, meanwhile, said the Christchurch UFB partner was ‘not surprised’ that Telecom was planning to implement cuts in the city. He added that Enable would be releasing its own pricing plan imminently.

Telecom spokesman Ian Bonnar said that the decision to cut the price of its Layer 2 ‘High Speed Network Service’ (HSNS) corporate product is ‘in line with the UFB agreement’. Whilst Bonnar was reluctant to comment on whether or not Telecom had consulted other UFB network operators or management firm Crown Fibre Holdings (CFH), he added: ‘Obviously, we have existing customers already and we need to price competitively’. HSNS provides corporate customers with access to transmission speeds of between 1Mbps and 10Gbps over Telecom’s 26,000km fibre infrastructure.

As previously reported by TeleGeography’s CommsUpdate, in March 2011 a total of 13 internet service providers (ISPs) signalled their intention to provide retail services using the wholesale UFB network. The following ISPs signed letters of intent confirming their plans: CallPlus/Slingshot, FX Networks, Kordia, Maxnet, Orcon, Rural Link (Hamilton), TrustPower Kinect (Tauranga), Uber Group (Whangarei), Velocity Networks (Hamilton), Vodafone New Zealand, Woosh, WorldxChange and Xf Net (Whangarei). In wholesale terms, the entry-level package for residential customers (including phone line and IPTV) is priced at NZD38.75, whilst the 100Mbps package (also including phone line and IPTV) is priced at NZD58.75. However, actual retail prices are expected to be around 18% higher.

New Zealand, Chorus (New Zealand), Spark