Vodafone says Chorus' new broadband products are a step in the right direction but still aren't enough to make the move from copper to fibre internet a "no brainer".
Lines company Chorus, which is the Government's partner for 70 per cent of the ultra-fast broadband (UFB) scheme, announced this morning a proposal to sell internet retailers faster fibre broadband products for less than existing prices.
Internet retailers would able to buy these wholesale products and then develop services for consumers. Chorus said today it hopes to have the new products available by the start of next year.
The UFB scheme, under which fibre internet lines are being laid to 75 per cent of New Zealand, began two years ago.
By 2019 the scheme should provide 75 per cent of the country with internet speeds of 100 megabits per second.
Vodafone, the country's second biggest broadband provider, had previously called for faster services like those announced from Chorus today and said they were a step in the right direction.
'It's good to see Chorus off the starting blocks with these updates to services, and it's about time," Vodafone's chief executive Russell Stanners said.
"We've been pushing for faster speeds for months - and this is a step in the right direction. However, these changes still don't go far enough to create a clear distinction between copper and fibre to make switching a no brainer...we need to make sure that the new fibre service is so attractive that customers will find the decision to shift really straightforward," Stanners told the Herald.
Chorus' proposed products comes as the Government mulls intervening in the copper-line internet market, fearing cheaper prices on the older network would hinder uptake to the newer fibre infrastructure being built around the country.
Some opponents to the Government intervention, such as Vodafone, said fibre internet services should be made more attractive rather than copper less attractive.
"Forcing consumers to pay higher prices for copper broadband to make fibre more attractive is bad policy. Instead, the Government must focus on making UFB fibre more compelling and attractive. Meddling with copper prices does nothing to address this," Vodafone said in a submission to the Government.
Despite today's announcement, Stanners said there are "still are still no grounds for Government intervention in copper pricing."
"Leave this to the regulator," he said.
The proposed fibre products:
Speed in mb/s (Download/Upload) - Wholesale Price
50/20 - $37.50 increasing to $42.50 by 2019
100/20 - $40 increasing to $45 by 2019
100/50 - $45 increasing to $49.90 by 2019
100/100 - $50
200/20 - $55
200/100 - $60
200/200 - $65
200/200 Business - $175
Speed in mb/s (Download/Upload) - Current Wholesale Price
30/10 - $37.50 increasing to $42.50 by 2019
100/50 -$55 decreasing to $49.90 by 2019
100/100 Business - $175
Chorus said it would consult the telecommunications industry on the new fibre products and do the same on making new combined fibre and copper services available to internet retailers.
Telecommunications Users Association chief executive Paul Brislen said it was good to see Chorus "acknowledge the need for faster speeds".
"This is a fibre optic service we should not be talking about 30 megabits per second we should be talking about 100, 150, 500 [megabits] and 1 gigabit. Let's be serious about it," he said.
Chorus increases broadband connections 2 per cent as fixed-line numbers slip
Broadband connections increased to 1.135 million at September 30, from 1.112 million at June 30, the Wellington-based company said in a statement. The biggest gain was in enhanced unbundled bitstream access connections which increased by 57,000 to 737,000 over the quarter.
The company's fixed-line connections declined to 1.778 million from 1.784 million in the quarter, led by a fewer baseband copper connections which slid by 12,000 to 1.509 million.
Chorus said its fibre connections grew to 22,000 across its ultrafast broadband network and its non-ultrafast broadband network in the quarter. Chorus is investing about $3 billion, with up to $929 million of government financing, to deliver fibre optic broadband infrastructure directly to more than 800,000 schools, businesses, medical facilities and homes.
Chorus has completed work to build the ultrafast broadband network past about 171,500 premises, bringing 226,000 end users within reach of the network. That includes 41,639 priority premises such as schools, hospitals and businesses, meaning 54 per cent of priority premises are now passed.
The shares fell 1.2 per cent to $2.47 in trading yesterday, and have shed 16 per cent this year. The stock is rated an average 'buy' based on nine analyst recommendations compiled by Reuters, with a median target price of $3.05.