Chorus puts cheaper, faster UFB fibre on the table

Chorus [NZX: CNU], which is responsible for the lion's share of the UFB roll-out, has proposed cheaper, faster wholesale plans.

Its 100Mbit/s/50Mbit/s plan, which currently costs ISPs $55 a month, would be reduced to $45, while a new 100/20 plan would cost $40. A new 200Mbit/s option (twice today's top speed for home users) would cost $65.

Business Plans cost the same ($175 a month) but double speed.

The company is seeking consultation on the proposed changes. Spoiler: everybody's going to like cheaper, faster fibre.

ISPS - notably Vodafone - have been pushing for cheaper, faster fibre to make UFB plans more attractive - as opposed to propping up the price of copper as a negative incentive (a key theme of the "Axe the copper tax" campaign").

Vodafone won't be completely  happy. In a sharply worded submission to the government, Vodafone called for the cheapest fibre product to be priced at $37.50. The telco also wanted access to "dark fibre", giving it more control over retail services and how they were customised.

Faster - and freed from price regulation
As NBR has previously noted, Chorus actually has incentive to make faster UFB plans available, as only those up to 100Mbit/s are covered by the template pricing Crown Fibre Holdings stipulates in its UFB contract - and as Chorus notes below, pricing for the new, faster plans will change over time.

"Good to see Chorus acknowledge customers want more than incremental increases,"  Telecommunications Users' Association CEO Paul Brislen tells NBR. "This is fibre and we should be talking [speeds of] 100, 250, 500Mbit/s and 1Gbit/s, not 30Mbit/s".

A key question: will ISPs come to the party by super-sizing their data caps?

And as with potential copper broadband wholesale price cuts, they'll be for nought if retail ISPs pocket the savings rather than pass them on to customers.

Chorus has also launched a new hybrid fibre-copper service - an acknowledge that ISPs are having problems with UFB installs. The best solution is going all fibre, however, there are Sky TV boxes, burglar alarms and other gadgets that still require copper. NBR wonders why this issue wasn't sorted before the UFB launched.

Last Friday, ICT Minister Amy Adams told NBR the 3% uptake of UFB fibre (10,000 of 300,000 premises passed) was not a disappointment; it was in line with government and Crown Fibre Holdings' pre-launch modelling. Regardless, perhaps the government will be looking to the new plans will help pep things along.

ckeall@nbr.co.nz

RAW DATA: Chorus statement

Chorus to consult on all new faster Ultra-fast Broadband products

Chorus has today proposed a new range of Ultra-fast Broadband (UFB) products, giving Retail Service Providers (RSPs) the opportunity to offer even faster speeds and better value over fibre.

The proposed new product line-up includes the following.  Note some prices change over time:

The key current products are:

Chorus will now commence a period of consultation with the industry with the aim of having the new products available by 1 January 2014. The new products will be made available in addition to the current fibre products that are specified under the Crown Fibre Holdings contract.

RSPs will then be able take these wholesale inputs and develop products and services to sell to end users.

The proposals include fibre broadband at 100mb/s download and 20mb/s upload at $40, as well as offering a new 200mb/s product at $55.   

“We are now two years into the roll out of Ultra-fast Broadband and we will be regularly improving our product offerings,” said Victoria Crone, GM Marketing and Sales, Chorus. 

“With this move we are aiming to optimise average revenue per user and provide more choice. We are excited to be bringing some of the fastest broadband speeds in the world to New Zealand and we believe these enhanced products will really drive home the benefits of investment in fibre infrastructure.

“UFB has the potential to transform New Zealand’s economy, our communities, and the way we connect to the rest of the world. At the completion of the UFB roll out in 2019 we believe New Zealand will be a top 10 broadband country and continually improving the speeds and capability offered by fibre will be an important part of achieving that goal.”

Chorus is investing around $3 billion with up to $929 million of Crown financing that will eventually be repaid to deliver fibre optic broadband infrastructure directly to more than 800,000 schools, businesses, medical facilities and homes.

In addition, Chorus is also consulting on making new combined fibre and copper products available to Retail Service Providers (RSPs).

“The industry is in an early transition phase and we need to ensure Telecommunications Services Obligation (TSO) and contractual obligations are met,” said Vic.  “There are also some early transitional issues relating to voice, medical and other alarms, and Sky TV set-top boxes.

“So to promote early uptake of fibre and to allow time for these other issues to be worked through, Chorus is consulting with all stakeholders on transitional combined fibre and copper products for a proposed two year period.

“In particular, medical alarms are services offered by charities who do not have a lot of spare money to develop fibre-based alternatives, and we will be working closely with them to support them in their transition to fibre.

“Fibre is the future and we are strongly committed to offering products to our customers that make it as easy as possible for people to make the upgrade and enjoy all the benefits of fibre-based Ultra-fast Broadband,” she said.