Winners and losers as Chorus flattens UFB pricing differences

Friday, 19 June 2020

Vodafone NZ said it passed on price changes 'in principle'.

Hundreds of thousands of homes and businesses could see the price of their ultrafast broadband plans go up or down after broadband network company Chorus finalised a pricing rejig.

Chorus confirmed it would increase the price of its 100 megabit UFB service by $1.15 a month to $47.15 from October as previously planned.

The maximum price it can charge for that service is governed by regulation and Chorus can increase it to reflect inflation.

But Chorus will cut the price of its gigabit fibre plans by $4 a month to $56 from next month and will also cut the wholesale price of its small business UFB service by $3 a month to $52 from July.

It will be up to internet providers to decide whether to pass on the wholesale price changes to customers.

* Spark says Chorus price cut 'step in right direction'

* Vodafone NZ chief executive Russell Stanners accuses Chorus of 'bait and switch'

Vodafone NZ spokeswoman Nicky Preston said that in principle it would pass on increases and decreases, but it had yet to decide how and whether to do so in this instance.

What would make the most difference to customers would be if Chorus shelved the October price rise, she said.

“The majority of our customers are on the most popular ‘white bread’ fibre plan, which has a wholesale cost set to go up from October 1, yet Chorus appears to be highlighting discounts on an ‘artisan sourdough’ plan which is much less popular.

'Unfortunately, this doesn’t help the customers who are most in need right now,' she said.

Spark spokeswoman Elle Dorset said it was also working through the details of Chorus' price changes.

'While we welcome the price reductions on some Chorus products, the large majority of our customers use the products that will increase in price from October,' she also said.

'Any Chorus price increases will inevitably flow through to customers, many of whom will be facing hardship over the next six to 12 months. So the longer Chorus can hold off on any price increase the better.”

2degrees spokesman Matthew Bolland said given most of its customers were on the 100Mbps plan, it would 'look across our base and consider what it means for pricing'.

Chorus chief executive Jean-Baptiste Rousselot said the pricing was designed to strike the right balance of passing on savings to internet providers while enabling Chorus to invest in infrastructure.

'The value of gigabit plans was seen during the lockdown, as they are the ideal connection for families who may have multiple people working or learning from home all at the same time,' he said.

Chorus provides the UFB network in most towns and cities where it is available, including Auckland, Wellington and Dunedin, but not Christchurch or Hamilton.