NZ's new broadband policy balanced: IDC

eGov Innovation Editors
20 Aug 2013

Following a government review of its telecommunications industry, New Zealand has done a good job in balancing everyone's interest in its broadband policy, according to IDC.

The government's discussion document released recently outlines the proposed approach to reviewing the telecommunications regulatory environment.

The review has essentially been split into two stages - addressing the critical issue of wholesale pricing in the market and addressing fiber demand and migration challenges, which IDC notes are complex policy issues.

“Many look back and wish the government had invested in better public transport during the '60s and '70s, but at the time such investments were deemed unnecessary or too expensive. The government is taking the equivalent of that investment step in fiber now and ensuring that New Zealand is well set up to achieve the economic benefits and provide new services that advanced broadband enables,” said Peter Wise, Research Manager, IDC New Zealand.

The government's discussion document puts forward a pricing structure that will result in a much smaller discount to current wholesale copper prices, down from the current price of NZ$44.98 ($36.32) to a range between NZ$37.50 and NZ$42.50. This brings the prices into line with the basic introductory fiber wholesale prices.

The options put forward are in IDC's opinion relatively balanced. "All retail service providers are likely to be faced with a more financially attractive solution than they have today and Chorus is faced with a much lower impact to its bottom line," according to Glen Saunders, Senior Analyst, IDC New Zealand.

IDC said it is critical for the government that telecom, which has the largest share of voice and broadband connections, has well-balanced incentives to invest in copper or in fiber. The government's discussion document has a number of solutions to help tackle this – including separating the wholesale input prices telecom pays for voice-only lines from lines used for voice and broadband and removing the ability to unbundle lines from Chorus cabinets.

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