UFB network operator Chorus has responded to calls for it to cut the wholesale price of broadband - which would, in turn, allow retail internet service providers (RSPs) like Spark, Vodafone, Vocus and 2degrees to cut the price of their plans.
The retailers have already taken Covid-19 wiping data limits on all of their fixed-broadband plans, plus measures such as suspending disconnections. This morning, a manager at one of the big three RSPs told the Herald it was time for Chorus to come to the party with measures of its own - which would include suspending a price increase scheduled for later this year.
"We recognise that at these times of exceptionally high traffic, there may be additional investment requirements for RSPs might have to make in order to meet the expectations of their users," spokesman Steve Pettigrew told the Herald.
"We are working on a comprehensive package of commercial and pricing offers to support consumers and the industry, as well as to provide as much security as possible for our people, in order to make sure as many New Zealanders as possible are able to get and stay connected to fibre," Pettigrew said.
"We are also engaged with the Ministry of Education to support initiatives to connect homes with school children that do not have connectivity."
Remote-working impact kicks-in
Pettigrew added that the impact of work-from-home trend is starting to kick in.
"For the first time today we're starting to see a noticeable increase in daytime traffic, and we expect that to continue to increase," he said.
"[But] we can still accommodate daytime traffic increases of more than three times today's level, so there is plenty of headroom in the network.
We also still have plenty of installation capacity available and continue to encourage people to order fibre to give themselves the best possible connection into the home."
Calls for Chorus to come to the party
Over the past couple of days, there have been calls for Chorus to chip in with coronavirus relief measures.
"Maybe a player like Chorus, which underpins the whole network, actually said we're going to give the ISPs a bit of a discount on the wholesale charges that we offer as well so they can pass on discounts for a temporary period to their customers," tech commentator Peter Griffin told RNZ yesterday.
"Particularly that copper line network when we still have hundreds of thousands of customers who aren't on fibre, why not give them a data broadband holiday for a while?"
'Price rises now just don't seem right'
Griffin's comments struck home with a manager at one of the retail telcos, who told the Herald, "All the big ISPs have come out with ways we're going to support residential and business customers - and these initiatives have a relatively significant cost impact on our businesses.
"But so far I haven't seen anything from Chorus," they said.
"The wholesale fibre cost is almost 50 per cent of our most popular broadband plan.
"Some help to cover some of the extra costs that we and other ISPs are taking on right now to remove data caps would be appreciated. It would be good for the full industry to be involved in keeping Kiwis connected."
"From our perspective, the easiest thing to pass on – that is, ISPs wouldn't have to do anything – would be a postponement of scheduled Chorus price rises.
"Price rises right now just don't seem right."
But would cuts in Chorus' wholesale pricing be passed on - and passed on in full? The manager, who requested anonymity but works for one of the big three retail telcos, said: "There would still be a small portion of the discount that would be a real cost of delivery to the consumer – so passing on 100 per cent might depend on a few variables."
Communications Minister Kris Faafoi did not provide immediate comment, but his office said he is likely to speak to the issue later today.
Chorus shares closed down 1.3 per cent to $6.19 but is still up 9 per cent for the year.
The network operator has been the second-best performing NZX stock during the Covid-19 crisis so far.