Tuanz is not convinced that the move is warranted as we were unconvinced that the full IPP reduction had been competed out of the retail price. We will watch with interest what the more agile service providers do given this is an opportunity to gain market share from the larger player.That’s an interesting point. Does New Zealand have agile service providers able to win market share from the big players? We often assume that broadband services is a business where larger players enjoy economies of scale, perhaps that’s not right.
John Key’s controversial assurance two years ago to Chorus chair Sue Sheldon that he would sort out the copper price issue to protect Chorus shareholders continues to hurt Kiwi households.Curran touches on an important point. Nearly all the problems here are down to government policy. On one level the New Zealand Government did a fine job designing and implementing a nationwide fibre-to-the-premises network which will soon reach about 80 percent of households. Just compare this with the mess in Australia over the NBN.
When the Commerce Commission accepted Chorus’ argument about the value and replacement cost of a new network the die was cast to keep the copper broadband price higher. The telcos are now raising prices to protect their own revenue margins and satisfy their shareholders.