NZ's UFB project attracts 13 RSPs

Dylan Bushell-Embling
23 Mar 2011

Up to 13 companies plan to use New Zealand's UFB fiber network to offer services, but the suggested pricing has led to concerns that end-users could end up paying more than they have to.

Crown Fibre, the state-owned company set up to conduct the Ultrafast Broadband (UFB) rollout, yesterday revealed it had received 13 responses from companies interested in becoming retail service providers on the dark fiber network.

Applicants include Vodafone NZ, broadcasting and telecom company Kordia and ISPs including Orcon and Maxnet. The list of ISPs also includes wireless broadband providers such as Woosh Wireless and Uber Group.

Crown Fibre CEO Graham Mitchell said he now expects these companies to start publishing details of their pricing plans in the coming weeks.

But a leaked document acquired by the New Zealand Herald has given a good indication of the likely cost of retail services. The document spells out the wholesale prices for access seekers, the paper reported earlier today.

Coupled with previously announced guidelines on retail pricing, and taxes, it appears a basic 30Mbps/10Mbps service will cost NZ$47.50 ($35) per month. This will scale up to NZ$80 for a 100Mbps/50Mbps service bundled with a phone line and IPTV.

These prices are attractive at the moment - they are broadly in line with current services, for at least twice the typical speed. And the guaranteed minimum is 2.5Mbps for an entry-level service.

But bodies including the Telecommunications Users Association of New Zealand have raised concerns with the proposal to fix prices at this rate over the next 10 years, stating this could result in users paying more for broadband than they would under a free-market model.

In addition, the booklet does not specify data caps, suggesting this will be left up to the retail service providers. It also does not detail the price providers may charge for excess data.

The UFB project, which aims to bring fiber to 75% of the New Zealand population, was supposed to have entered the rollout stage by October.

But work only started in December, only limited lines have been laid, Crown Fibre was still accepting bidders for the rollout as of March, and the government is yet to decide whether to accept incumbent Telecom NZ's proposal to structurally separate if it is allowed to participate.

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