Published on the 15/12/2015 | Written by Newsdesk

TUANZ, Vodafone, Spark voice discontent with ComCom draft decision on copper pricing…

The draft Commerce Commission decision on wholesale copper charges has been met with dismay from TUANZ and major telecoms operators. Spark’s MD has gone as far as to say the decision impacts on the ability for private companies to invest in providing services in the country.

The Telecommunications Users Association of NZ added that recent research by organisations such as the ITU already has New Zealand pricing comparing poorly in comparison to other nations. It noted in a statement that the final price announced today adds a further $3.30 to the previous draft ‘meaning that there’s been a steady increase from the Initial Pricing decision of $34.44 to this final wholesale price of $41.69’.

‘Users had seen the benefit of initial lower prices flowing through as a result of the process  and improved competition but now will likely face further increases in their monthly charges given this final price applies from 16 December 2015’, said TUANZ.

“These prices will have a direct impact on users, and especially those users who are unable to take up UFB services.  These include the 20 percent of the population who live rurally, and who have no other fixed line options and will continue to rely on copper phone lines for the foreseeable future,” said TUANZ CEO Craig Young.

He added that the decision lends weight to ensuring that the country gets the current review of the Telecommunications Act right, “so that post 2020 we establish an internationally competitive business environment when it comes to the cost of connectivity.”

TUANZ said it recognises that the Commerce Commission is an independent arbiter which must apply the law around pricing processes as it stands, but noted its disappointment that the end users look to have lost out in the latest decision.  “We are, though, happy that the Commission has decided to not apply any backdating to the pricing which is a positive outcome for users,” Young added.

Meanwhile, Vodafone NZ CEO Russell Stanners hasn’t minced his words in a statement issued in the wake of the decision. “We’re extremely disappointed with the copper pricing [which] is even higher than the in the Commission’s draft decisions, and is well out of step with international benchmarking.

“Today’s decision to increase prices means that it will be necessary for us to thoroughly review our pricing for fixed line services.  It is likely that the increased charges will get passed through to the customer. It is unfortunate that New Zealanders will continue to be charged much more for copper access than friends and family around the world.”

Spark described the decision as ‘the worst possible Christmas present for New Zealand consumers and businesses’.  The company MD Simon Moutter said given the ‘significant and unexpected cost increase’, it will not be in a position to return savings to customers as previously indicated. “We are now also forced to increase our retail voice and broadband pricing to take into account the significantly increased costs now faced from higher regulated Chorus line charges.

“While the Commerce Commission decision is effective from tomorrow, it will take months before the higher charges flow through completely into pricing for our customers.”

Moutter took a broader swipe at ComCom, too. “The massive swings in successive Commerce Commission decisions within a matter of months makes it extremely hard for any business to invest, plan and price its services effectively. We have now had two years of market disarray, with significant fluctuations at every stage of the process. The losers out of this are New Zealand consumers and businesses.”