Chorus has today updated Retail Service Providers (RSPs) on planned changes to the pricing of its wholesale fibre products over the next three months, along with outlining its support to RSPs on the doubtful debts they accrued during lockdown.
The reduced pricing and delayed increase are expected to deliver savings of around $10m to RSPs, and the lockdown debt package is a further $2m of value.
The key planned product changes are:
- Gigabit wholesale fibre pricing will reduce from $60 a month to $56 a month from 01 July 2020. Gigabit is already Chorus’ fastest growing plan.
- As previously signalled, the annual regulated CPI increase to fibre products will be delayed until 01 October 2020, at which point the price for 100Mbps fibre will increase from $46 to $47.15. Chorus is consulting with RSPs on this change over the next two weeks.
- Small business fibre pricing will reduce by $3 a month to $52 from 01 July 2020, acknowledging the pressure SMEs are facing.
The price changes are wholesale only and the decision about passing on either reductions or increases to consumers sits with the RSPs.
Chorus CEO JB Rousselot said the changes strike the right balance of passing on savings to RSPs, while still enabling ongoing investment in infrastructure.
“We are conscious of the critical role Chorus infrastructure played during the lockdown, and we believe this mix of pricing changes will support RSPs, allow Chorus to continue to invest in the capacity, reach and resilience of the fibre network, and also enable more customers to benefit from higher specification plans.”
“For example, the value of gigabit plans was seen during the lockdown, as they are the ideal connection for families who may have multiple people working or learning from home all at the same time. High-quality small business fibre will also have an important role to play in supporting economic recovery.”
In addition to the savings, Chorus has also announced that it would create a further fund of $2m to provide relief for RSPs who elected not to cut off customers who were unable to pay during the lockdown.
“We support the decision some RSPs made not to cut off customers during the lockdown, which in some cases has seen customers’ debt to them grow, potentially resulting in higher than usual rates of non-payment.
“We have said throughout that Chorus will play its part in supporting RSPs that faced the risk of higher bad debt due to the lockdown. The fund represents an estimate of the increased risk of bad debts experienced by the industry, for the period of the lockdown, based on feedback from retailers and other industry analysis,” he said.