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28812 posts

Uber Geek

Biddle Corp
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  #747762 20-Jan-2013 13:07
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The move by Telecom to lower prices was always going to happen once the Chorus split happened. Why? Because wholesale UBA and EUBA pricing was calculated using a retail minus figure, based only on Telecom Retail's retail internet plans. This was an exceptionally flawed model that delivered a bad outcome for consumers.

I've said it for years and I'll say it again. the Commerce Commission have been responsible for ripping off NZers for the last ~5 years with wholesale internet pricing in NZ.

The Commerce Commission are now moving to a cost plus pricing model from 2014 which is controversially looking to slash wholesale prices considerably. Regardless of whether you agree with the deep price cut or not, the reality is a cost plus model is where we should have always been.

It's also worth noting that UFB wholesale prices aren't set in stone, from 2014 to 2019 most plans have yearly movement in the prices. Low end plans will all yearly over this period, with high end and P2P plans seeing significant price drops over this period.

It will also be interesting to see what Chorus do with VDSL wholesale pricing since this is a commercial, and not a regulated offering. As regulated UBA/EUBA offerings fall Chorus need to decide whether they maintain the $20 price premium or alter this.

I still see a big future for VDSL2, but it just has the problem of not being scalable to a mass market solution because of the mentality of the average NZ internet user who wants everything for free and seems unwilling to pay for a modem, and unwilling to pay to have the wirining in their house sorted to ensure ADSL2+ and VDSL2 are capable of working correctly. You don't expect your big box retailer to send around a plumber for free to hook up new pipes for your new dishwasher, or a technician to adjust your aerial and cabling for Freeview, but somehow many people expect their ISP to be responsible for fixing their internal wiring in their home for free which is their own property.

195 posts

Master Geek

  #747803 20-Jan-2013 14:56
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I don't see by what token it's 'its pretty much the same except you get 3 X downloads and 10 X upload'. Telecom's pricing used to be rather bad, but it's gotten a lot better recently, particularly for resonably high usage which I assume we're talking about (most people only using 50GB a month probably won't care about VDSL2 much). By way of comparison you can get 500GB from Telecom for $119 including a homeline. With Snap's VDSL2 (which I agree is the only decently price option out there), you only get 300GB for $120 and with no phone line. If you want a phoneline with a local number, you pay $11.50 - $15 more for a VOIP phone line depending on who you use. If you want to go up to 550GB with Snap VDSL2, you need to pay $140. And this still no phone line.

Okay you do get the free off peak ('all you can eat nights') with Snap but having used both a free offpeak and an unlimited plan in the past, I can see even when you leave your computer on all the time anyway it's far more convenient to not have to worry about when you use the internet. To be fair, 300GB is a more reasonable data cap then what I had in the past. However depending on the service level, I'm not convinced you could frequently achieve 500GB in total using the 300GB+offpeak unless you had a specific usage pattern.

In other words, no it isn't 'pretty much the same except you get 3 X downloads and 10 x upload'. Whether or not the price premium is worth it is up to the user but it's clearly not 'pretty much the same' unless you have a rather odd definition of 'the same'.

Of course the big complaint on price is not just the higher price but the comparison with UFB. You can get 550GB with Snap UFB including a VOIP phone line for $120. As with many ISPs, the lowest level UFB price with VOIP phone from Snap is pretty much the same as the non naked ADSL2 bundle price from them. So not surprisingly, this compares well with the Telecom ADSL2 price. But of course if you're like me and UFB isn't arriving for at least 3 years, you're SOL. UFB is being partly subsidised by the government but does this mean that the government should discourage or prevent reasonable regulation based on existing rules just to push people to something a lot of the country can't get? Even ignoring regulation, I think it's an open question whether Chorus is really making a smart move here or have effectively ensured VDSL never gets much usage in NZ when they could easily be making more money if they weren't so convinced of the need to keep prices high. And without wanting to take this thread too far OT, many people did question whether the UFB tender process was done well or by design it gave way too much priority to Chorus.

The other thing of course is until recently, there hasn't been a good reason to go with Telecom. You could get a similar level of service from others with more data or cheaper price. Or even more data with a lower level of service. The fact that Telecom's prices were silly until recently is not a good reason to say VDSL2 pricing isn't expensive.

The prices you quote for Telecom are not nationwide pricing they quote for AK, WGT and CHCH so a lot of people pay another $10.  My point being it was close for a dramatic increase in speed which everyone has complained about how backwards the internet in this country is yet its the opposite.  Ask anyone on the forum if they would give up their VDSL I know I would not and I bet nobody else would either.

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