PLUS there's a new 200Mbit/s option. But there's also a sting in the tail — the new plans will cost ISPs slightly more, and the price will increase every year.
UPDATE / May 14: After an extended trial, Chorus [NZX: CNU] has unveiled new plans that offer faster much faster UFB fibre — but there's a sting in the tail for retail customers and ISPs, with the new plans costing slightly more and further increases in the wings.
The wholesale price cuts and speed boosts — which kick in between July (fibre) and September (copper) — should feed through to better plans offered by retail ISPs such as Telecom, Vodafone, Orcon and Slingshot. They could also boost UFB uptake, which has been below 10% so far of premises that now have fibre within reach.
Today's cheapest fibre plans offer 30Mbit/s speed (or very roughly three times the speed of DSL copper line broadband). Chorus wholesales the plans for $37.50/month.
100Mbit/s will become the new entry-level plan for $40 a month — a monthly price that will increase by $1 every year every year until 2020.
And Chorus will now provide a 200Mbit/s plan, double the speed of the fastest residential plans today.
The company has also introduced a new wholesale DSL copper broadband service called Boost HD, which it says is aimed at those who want to stream high definition video (which can be a tricky proprosition over copper broadband given the issue of contention, or the same limited slice of bandwidth being sold to/shared by many customers).
A second new product is Boost VDSL, a VDSL (faster copper)-based product that includes a "fibre ready" installation that will get the wiring within a property ready for fibre for an easier upgrade once fibre is available. The fibre ready installation will only be available in Chorus UFB areas.
Copper broadband bandwidth degrades with distance. Chorus says around 90% of its broadband-cable lines can handle its Boost HD ADSL product, and about 60% Boost VDSL.
Small business plans are the same base monthly rate ($175) but there's now double the bandwidth.
A notable feature of Chorus' UFB contact with Crown Fibre Holdings its that the agreed template pricing only covers plans up to 100Mbit/s bandwidth. With its faster new plans, Chorus breaks free from regulation.
Chorus' new wholesale products (click table to enlarge):
RAW DATA: Scroll to end of story for Chorus release.
Chorus re-engages with ISPs, offering 1000 customers double-speed UFB fibre but ...
Dec 13, 2013: After throwing its toys out of the cot last month, as controversy over copper pricing flared, Chorus has re-engaged with ISPs over plans for cheaper, faster fibre.
Retail ISP Snap internet is now offering customers a trial plan that offers 200Mbit/s download speed - or twice that of today's fastest UFB plans. Upload speed is 50Mbit/s.
Chorus has made 1000 positions available on the trial, spread across all retail ISPs offering UFB fibre plans.
Any retail ISP can offer the 200Mbit/s plans on pilot but spokesman Ian Bonnar says so far only Snap has joined the programme.
Snap is offering a couple of killer 200Mbit/s plans for power users. One gives you a roomy 500GB cap for $149, the other all-you-can eat downloads for $199 a month.
That's good stuff and NBR hopes ISPs will follow Snap onto the trial shortly - at least one more is in the immediate pipeline, Chorus says. [UPDATE: Business-focused ISP Vibe tells NBR it is also on the programme, offering trialists its $127/month Evolve 4 plan - usually 100Mbit/s - 200Mbit/s bandwidth. Vibe COO Barry Murphy tells NBR the company doesn't have data plans but instead charges $0.80c per gigabyte, so 100GB would be $80.).
But, but ...
But faster fibre was only half the deal when Chorus put new wholesale plans on the table in October.
Specifically, it said its 100Mbit/s/50Mbit/s plan, which currently costs ISPs $55 a month wholesale, would be reduced to $45, while a new 100/20 plan would cost $40. A new 200Mbit/s option (twice today's top speed for home users) would cost $65.
Business Plans would be the same ($175 a month) but double speed.
So where's the trial for the cheaper plans?
"On timeframes for the other stuff – as you know we’re working through things with Crown Fibre Holdings at the moment and will update as soon as I am able," Mr Bonnar says.
Let's hope so.
The EY report showed that Chorus won't "go broke" as the PM put it, if it follows EY's prescription for dividend cuts and other cost-saving measures after the Commerce Commission copper price cuts.
Chorus has deployed some negative weapons, including its High Court appeal against the ComCom's price ruling; its final pricing principles review appeal, and its refusal to rule out the so-called "nuclear option" of lowering copper broadband to the (ultraslow) contractually required minimum.
It would be good to see it coming to the party with more positive initiatives, too, such as seeing through the cheaper UFB plans, and long-term clarity over the cost of connection.
As Vodafone and others have pointed out, increasing fibre uptake shouldn't be about artificially holding up the price of copper, it should be about making fibre more attractive - particularly in against VDSL (the fastest flavour of copper).
Busting Sky TV's content monopoly should be part of the demand-side equation. But given there's zero political will on that front. Neither is there any for helping out Chorus with RMA changes. That means lowering fibre pricing, and upping speed, is crucial to driving UFB uptake - and getting some fibre revenue in the door for ISPs, and Chorus.
RAW DATA: Chorus May 14 statement
Chorus Accelerate delivers step change to New Zealand’s broadband capability
Chorus has today announced a new set of broadband products designed to deliver greater speeds, enhanced HD video capability, more choices for the telecommunications industry and a clear path to fibre.
The Chorus Accelerate product range offers commercial copper and fibre products. These products will be available alongside the standard regulated products, allowing the industry to choose the products that best meet their needs.
“The Chorus Accelerate range is a direct response to feedback from our customers,” said Mark Ratcliffe, Chorus CEO. “We know that our customers have been asking us for greater speeds, products that give them the confidence to market value-added HD video services, more choices and better value. Chorus Accelerate gives them all of this and more.”
“Chorus Accelerate is an integrated portfolio of products. Each product provides a logical step towards the fibre future, as well as ensuring that New Zealanders enjoy the best possible broadband today. Chorus Accelerate also makes it much easier and better value for more end users to make the switch to Chorus UFB fibre as soon as it is available in their area.”
Investment in infrastructure
Chorus Accelerate will be powered by a multi-million dollar investment in core Chorus infrastructure.
Chorus has today announced an investment in the Alcatel-Lucent 7950 Extensible Routing System (XRS) to handle the high growth in bandwidth demand in our network and the additional capacity required to support the Chorus Accelerate range.
The XRS network switch can handle up to 16 terabits of data per second, which enables Chorus to provide service commitments for both new copper and fibre services.
Chorus is the first communications infrastructure provider in the Asia Pacific region to invest in this world leading solution. This additional capability builds on the $500m investment made in fibre to the node.
New fibre products
Chorus will launch three new product groups for fibre.
Fibre 100 will be priced at the initial wholesale price of $40 per 100/20 connection, making it the de facto entry level fibre plan.
Chorus will also introduce Fibre 200 – a range of 200Mbps fibre products for end users who demand some of the fastest broadband speeds in the world, along with Fibre Business, which includes a 1Gbps product available across Chorus’ fibre footprint.
“Fibre is the long term solution for broadband in New Zealand, and our new products clearly set it apart from the copper-based products in terms of speed and value. Starting with a wholesale price of $40 for Fibre 100 is a conscious decision to make it the most attractive option for both the industry and end users as soon as fibre is available in our UFB areas.”
Chorus Accelerate Fibre products will also be slightly over-specified for their speeds, meaning that Retail Service Providers can be confident that if they pay for 100Mbps as a wholesale product, the end user will see 100Mbps.
Boosted copper
Chorus is also offering more choices for the telecommunications industry on its copper network. The new copper products support a clear migration path to fibre by expanding HD video capability.
“We know that the more bandwidth and better services people enjoy the more they want, and we are confident that better copper will also mean more end user demand for fibre,” continued Mark Ratcliffe.
“We also know that our customers are very focused on developing video services and these products will give them the confidence to market their new video services with the assurance that the Chorus network will deliver the experience that end users will love.”
The two new copper products are Boost HD and Boost VDSL.
Boost HD includes a service commitment that there will be enough bandwidth available in the Chorus network that the service Chorus provides to its industry customers will allow for an HD video stream at all times. The service commitment applies to data over the Chorus network, and RSPs will also need to provide adequate throughput to ensure their customers receive an ideal HD video experience.
Boost VDSL is a VDSL-based product that includes a “fibre ready” installation that will get the wiring within a property ready for fibre for an easier upgrade once fibre is available. The fibre ready installation will only be available in Chorus UFB areas.
Both Boost products require capable lines.
Around 90% of the Chorus broadband capable lines will be Boost HD capable, and around 60% will be Boost VDSL capable.
Boost HD will be priced at the discounted wholesale rate of $44.98 until 1 December, the same as a standard broadband connection today. Boost VDSL will be priced at the wholesale rate of $49.98.
Chorus will review both prices upon completion of the Commerce Commission’s Final Pricing Principle reviews for UBA and UCLL scheduled to be done by 1 December 2014.Chorus expects that both Boost products will be priced at an appropriate premium to regulated Unbundled Bitstream Access (UBA) products.
Customer choice and speed to market
Chorus also remains committed to delivering its regulated broadband products and reiterated its previous commitment that it will not throttle the regulated broadband service to an unusable level in order to artificially create demand for commercial products.
“Customers will be free to choose the products that best meet their needs, whether they are from the regulated or the commercial product set,” said Mark Ratcliffe. “We are excited to offer a new range of commercial products that we believe respond to our customers’ needs in a dynamic and commercial way. Providing commercial products in addition to the regulated products also means we can move much more quickly to meet our customers’ needs as the industry evolves.”
Chorus will immediately commence a 60 day consultation period with the industry to finalise the technical details of the product descriptions.
The company is set to launch the new fibre products on 1 July 2014 and the new copper products on 1 September 2014, subject to market demand.
