How competitive is NZ’s residential ISP market? This quote from Orcon’s recent submission to the Commerce Commission offers some insight:
Margins in the broadband world are incredibly slim. Currently, Orcon needs to retain a UBA customer for 27 months to recover setup and marketing costs, before it makes a single dollar off that customer.
A comment like that really does make a mockery of the recent claims by Axe the tax campaigners that any reduction in Chorus wholesale UBA costs would be passed through to consumers.
With margins this slim would any ISP realistically pass these through in full? Any smart business would be pocketing some (or even all) of the reduction in the hope of reducing that insane 27 month period down to something a little more realistic.
Other related posts:
Spark Paging network shutdown – the event nobody cares about? Not quite.
UFB voice, power cuts, copper invincibility and mainstream media FUD.
New Zealand’s growing BUBA problem (AKA I feel sorry for you if you’re on a Conklin)
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