Connectivity cash row continues as Spark calls on Commission to slash wholesale charges

Connectivity cash row continues as Spark calls on Commission to slash wholesale charges

"Wholesale charges are already high and the Commerce Commission is looking to push them up even higher."

The Commerce Commission monitoring report released today underlines how high charges for wholesale broadband are pushing up the retail price of internet for New Zealand consumers.

So says Spark New Zealand, who believes the that while there is healthy competition and price reductions at the retail level, with internationally competitive prices for entry-level and ‘naked’ plans, prices for a number of New Zealand’s broadband packages are still higher than comparable countries.

“Retail prices have been reducing during the past few years due to strong competition in the marketplace, but wholesale charges are already high and the Commerce Commission is looking to push them up even higher,” says Andrew Pirie, General Manager Corporate Relations, Spark New Zealand.

“This is putting upward pressure on prices and means New Zealand’s internet isn’t as affordable as it could be.

“Around half of the average customer’s bill goes to paying the wholesale charges, meaning they have a big impact on what people pay.”

Last month Spark New Zealand launched the Be Counted campaign to help explain to New Zealanders what makes up the cost of their broadband, and to give them an easy way of sending a submission into the Commission asking it to reduce wholesale charges for broadband.

To date, more than 50,000 people have visited the website and sent in a submission asking the Commission to reduce charges.

“This report reinforces that the Commerce Commission had the right idea when it initially proposed to reduce wholesale broadband charges,” Pirie adds.

“New Zealanders are waking up to the fact that while we have a healthy competitive retail market for telecommunications, we face unfair wholesale charges that push up the price of connectivity.”

As reported by Computerworld New Zealand, the study is an annual look at the state of the country’s telecommunications markets.

When comparing New Zealand’s retail prices to those in other OECD and similar countries for various levels of monthly consumption, Dr Gale claims New Zealand’s price of $69 for a 30Mbps 30GB fibre broadband plan with voice was 22 percent below the average of 28 countries with comparable plans.

Furthermore, New Zealand’s price of $69 for a 30GB entry level copper broadband and phone bundle was right on the average of 32 countries with comparable plans, the price of $29 for a mobile plan providing at least 100 calls (188 minutes), 140 texts and 500MB of data was 35 percent below the average for the 34 OECD countries and the price for 6GB of stand-alone mobile data at $90 (typically for use with a data-stick) was amongst the most expensive in the OECD.

“Our research shows that New Zealand’s wholesale broadband charges are up to 80 percent higher than comparable countries, which equates to around $180 more per year for every internet and landline customer,” Pirie adds.

“If New Zealand’s wholesale charges were more in line with the rest of the world, our performance in studies such as this would look a lot better.”

The Commerce Commission will shortly make a decision that will have a big impact on how people pay to use the internet or landline.

It is in the final stages of a process that to set the charges that internet service providers (such as Spark, Vodafone and Slingshot) are required to pay the monopoly access provider (Chorus) for internet and landline connections over the copper network.

“We hope the Commission listens to the tens of thousands of ordinary internet users who have joined us in calling for wholesale charges to be reduced,” Pirie adds.

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Tags Commerce CommissionSpark New Zealand

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