Chorus offers to triple 'UFB' speeds for 600,000 households and firms for free

Wednesday, 1 September 2021

Chorus’ offer appears designed to limit competition from fixed-wireless alternatives.

Chorus has offered to increase the speed of the country’s most popular ultrafast broadband service at no extra cost to internet providers who sell plans to customers.

About 70 per cent of homes and businesses that are connected to Chorus’ ultrafast broadband (UFB) network – about 600,000 in total – are on plans that offer download speeds of 100 megabits per second (Mbps) and upload speeds of 20Mbps.

But Chorus is offering to upgrade them to a download speed of 300Mbps and an upload speed of 100Mbps without charging internet providers extra for the connections.

The price of Chorus’ 100/20Mbps plan is effectively set by regulation to anchor the cost of all Chorus’ UFB plans.

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Spark says it will look to ensure its customers can take advantage of the faster speeds, but says the Chorus upgrade will take it “some time and some cost to implement”.

Spokesman Steve Pettigrew said Chorus had committed to tie the price of its 300/100Mbps service to that price, to prevent the wholesale cost of the services diverging in future.

Internet providers could face some extra cost in providing the upgrade, for example to provide more international capacity and to upgrade their network handover connections and change their marketing.

That means it cannot be assumed internet providers would not charge customers any premium for the service.

Chorus is increasing the price of its 100/20 anchor product by 1.52 per cent from October, as allowed to reflect inflation.

Chorus hopes to deliver the upgrade by December but Pettigrew said it would need to work closely with its broadband retailers, whose “support is crucial and much appreciated”.

“Obviously there are concerns around making sure they can do all the things they are going to need to do from their side”, but generally-speaking their response had been positive, he said.

Pettigrew acknowledged one motivation for Chorus to offer the upgrade was to ensure its UFB plans were better value when compared to alternative technologies such as fixed-wireless broadband from which Chorus does not get any revenue.

“Undeniably there are competing products out there and we want to make sure that fibre maintains its top position,” he said.

Vodafone says using its cable network or wireless broadband will remain the cheaper options.

Spark, Vodafone and 2degrees have been marketing fixed-wireless plans, which run off their mobile networks, as an alternative to copper broadband but also in some cases as an alternative to lower-end UFB plans.

As such, the free offer – which has more upside for internet providers that lack a mobile network – is potentially not in their commercial interests.

Spark spokeswoman Ellie Cross said it would “of course” look to ensure customers on its Fibre 100 plan could take advantage of the increased speeds offered by Chorus in the future.

But such changes took “some time and some cost to implement”, she said.

Vodafone spokeswoman Nicky Preston described Chorus’ offer as “great” and said it would be “determining how to help those customers for whom this product is best suited make the most of it”.

But she said speed was “only one measure of broadband performance” and it was still cheaper for people in Wellington and Christchurch to access the internet via Vodafone’s cable network, or both there and elsewhere via a wireless broadband connection.

Pettigrew said the upgrade would help shift New Zealand into the OECD’s “top-10” countries for broadband speeds.

“It is part and parcel of a plan to make sure we can demonstrate what the power of the UFB network – which we have built the lion’s share of – is.”

Chorus chief executive Jean-Baptiste Rousselot said its monitoring showed there were homes and businesses on the 100/20Mbps service that regularly “maxed out” their broadband connections.

“While applications manage this congestion, it can result in buffering or lower resolution streams that can detract from the enjoyment of a great broadband experience,” he said.