Video | Agriculture | Confidence | Economy | Energy | Employment | Finance | Media | Property | RBNZ | Science | SOEs | Tax | Technology | Telecoms | Tourism | Transport | Search


Telecom backs setting copper prices until 2020

Telecom backs setting copper prices until 2020, warns against getting too far away from input cost

By Paul McBeth

Sept. 23 (BusinessDesk) - Telecom Corp, the country’s biggest telecommunications company, is backing government moves to set the price for access to Chorus’ ageing copper network until 2020 to protect the national roll-out of fibre lines, though it warns against getting too far away from the underlying costs of the service.

Auckland-based Telecom supports the government’s ultrafast broadband initiative to help fund a fibre-based network across three-quarters of the country, and accepts that if regulated pricing on the old copper network undermines the programme’s success something needs to change.

“Ongoing debates about copper pricing risk distracting our industry, and customers, from the far more important questions of how, as a country, we can best take advantage of the very valuable fibre assets we are investing in,” chief executive Simon Moutter said in a statement. “Above all else, our industry needs input pricing certainty.”

Communications Minister Amy Adams sought a review of law governing the sector after Telecommunications Commissioner Stephen Gale proposed sharp cuts to the regulated price of unbundled bitstream access, a copper-based service, something the government viewed as undermining the economics of the fibre network it is bankrolling.

The proposed cuts to UBA pricing came after a three-year freeze and were seen as a way to offset the national averaging of the price of unbundled copper local loop access, which effectively increased prices for urban customers, accounting for about 70 percent of users as part of a proposed transition period.

Telecom backs the third option in the review, in which the government would set the prices for UCLL component of the old network, leaving the Commerce Commission to set the price for UBA.

The company said the total monthly cost of copper lines is closer to the bottom end of the discussion document’s propose band between $37.50 and $42.50, though a realistic range might be between $35 and $40.

If prices are set too high on the copper lines, the market will react to the distortions and incentives created, and should only be set at an above-cost level to allow the UFB build to be completed on time, Telecom said.

“That means we need to be confident that total copper price – if it is not to be set at cost – is set at least in close proximity to cost,” it said.

Chorus, the regulated network operator spun out of Telecom in 2011, backed a total price of $45.92 in its submission.

Telecom said if the regulated copper prices are tweaked other options for fibre should also be considered, such as a better entry-level fibre service, downward adjustment to the price path for fibre products, or giving retail service providers unbundled fibre access earlier than the current 2020 date.


© Scoop Media

Business Headlines | Sci-Tech Headlines


Internet: NZ Govt Lifts Target Speeds For Rural Broadband

The government has lifted its expectations on faster broadband speeds for rural New Zealand as it targets increased spending on research and development in the country's information and communications technology sector, which it sees as a key driver for export growth. More>>


Banks: Westpac Keeps Core Government Transactions Contract

The local arm of Westpac Banking Corp has kept its contract with the New Zealand government to provide core transactions, but will have to share peripheral services with its rivals. More>>


Science Investment Plan: Universities Welcome Statement

Universities New Zealand has welcomed the National Statement of Science Investment released by the Government today... this is a critical document as it sets out the Government’s ten-year strategic direction that will guide future investment in New Zealand’s science system. More>>


Scouring: Cavalier Merger Would Extract 'Monopoly Rents' - Godfrey Hirst

A merger of Cavalier Wool Holdings and New Zealand Wool Services International's two wool scouring operations would create a monopoly, says carpet maker Godfrey Hirst. The Commerce Commission on Friday released its second draft determination on the merger, maintaining its view that the public benefits would outweigh the loss of competition. More>>


Scoop Review Of Books: She Means Business

As Foreman says in her conclusion, this is a business book. It opens with a brief biographical section followed by a collection of interesting tips for entrepreneurs... More>>


Hourly Wage Gap Grows: Gender Pay Gap Still Fixed At Fourteen Percent

“The totally unchanged pay gap is a slap in the face for women, families and the economy,” says Coalition spokesperson, Angela McLeod. Even worse, Māori and Pacific women face an outrageous pay gap of 28% and 33% when compared with the pay packets of Pākehā men. More>>


Get More From Scoop

Search Scoop  
Powered by Vodafone
NZ independent news