Government cuts price of Chorus 100/20Mbps UFB wholesale service

Price to drop to $45

The Government has released its Supplementary Order Paper (SOP) to the Telecommunications (New Regulatory Framework) Amendment Bill, setting a reduced price cap for Chorus' most commonly used wholesale broadband product, the 100/20Mbps UFB service.

The previous price cap was $49.65 per month. Under the terms of the SOP  it will be reduced, retrospectively, to $45 from 1 July 2018 to 30 June 2019 and then $46 from 1 July 2019 until 31 December 2019.

From 31 December 2019 the $46 price cap will form the starting price cap for the new ‘anchor’ UFB wholesale service price under the new regulatory regime from 1 January 2020.

The move follows Chorus in March this year announcing an increase its UFB wholesale fibre prices that departed from its forecast price path released in 2014.

Minister of Broadcasting, Communications and Digital Media, Kris Faafoi, said the Government had sought a contractual solution with Chorus on the price of its 100/20Mbps service and that Crown Infrastructure Partners and Chorus had agreed on a price path that "represents a fairer deal for everyone: a good price for New Zealand broadband consumers, and a reasonable price for Chorus."

“By constraining the starting price caps for the UFB services (such as the 100/20 Megabit service) to 2019 levels, we can ensure New Zealanders have broad price stability in these services as the transition to the new regulatory framework occurs,” he said.

Chorus CEO Kate McKenzie said: "We welcome this step towards a new regulatory framework for New Zealand’s key communications infrastructure [and] we look forward to the passage of the bill and to starting work on implementation."

Chorus said the SOP also included a number of detailed changes that appeared to be improvements for certainty.

"These include: clarification of the select committee’s recommendations on the treatment of Crown Infrastructure financing; oversight by the Commerce Commission of exemptions from the business line restrictions from the date of implementation; the requirement for the Commission to set specified fibre areas to de-regulate copper by 1 January 2020; the requirement for a 111 code to ensure that vulnerable end users can have an ability to call 111 in the event of a power failure."

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