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Vodafone says Chorus has suspended industry talks over faster, cheaper fibre

UPDATE: Chorus responds.

NBR Staff
Thu, 28 Nov 2013

Vodafone says it's disappointed that Chorus has suspended its scheduled Dialogue Briefing around new, faster fibre services.  

Last month, Chorus announced an industry consultation on a proposed new range of Ultra-fast Broadband (UFB) products, giving retail service providers (RSPs) like Vodafone the opportunity to offer faster speeds at a cheaper price.

This process has now been postponed by Chorus, Vodafone says [UPDATE: Chorus spokesman Ian Bonnar says: This is simply a postponement this component of an industry consultation session – not a withdrawal of the proposed upgrades. It would not be appropriate to progress with an industry consultation at this time while we work through the implications for our business of potentially significant reduction in our revenues and therefore our ability to invest.]

Chorus has been in a holding pattern, to a degree, since the government hired EY Australia to independently review the company's financial position, and its capability to complete the UFB rollout if the Commerce Commission's determination for copper broadband price cuts is implemented. It has already suspended its dividend guidance. Now it looks like another toy has been thrown out of the cot. ICT Minister Amy Adams says the review will wrap up by year's end.

Vodafone has been pushing for faster speeds to create a clear distinction between copper – particularly VDSL – and fibre, making UFB more compelling and attractive, so customers find the decision to shift straightforward.  Whilst the Chorus proposals did not go as far as they needed to, Vodafone supported the move as a step in the right direction.

Vodafone CEO Russell Stanners says New Zealanders deserve faster speeds and better products than are currently offered by Local Fibre Companies or LFCs (Chorus - responsible for around 70% of the rollout, plus NorthPower Fibre, Enable and Ultrafast Fibre).

“The current entry level UFB speed on offer of 30Mbps down is dismal when compared to international benchmarks and what’s currently available on copper networks in New Zealand.  The introduction of VDSL products in the market has made entry level fibre offerings redundant.

“The UFB initiative was premised on improving New Zealand’s international competitiveness, but we risk falling behind the speeds and services available in other countries – such as Singapore, Japan and Korea.”

Mr Stanners continues: “If Chorus – and the other LFCs – feel unable to provide the layer 2 services we believe customers need, the government should look to bring forward the unbundling of the fibre network and let others have a go.”

Vodafone's comments come at a time when Telecom is testing the waters for a new, no-frills ISP centred on ADSL and VDSL plans.

NBR Staff
Thu, 28 Nov 2013
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Vodafone says Chorus has suspended industry talks over faster, cheaper fibre