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Are Vodafone and Spark using ComCom copper prices as an excuse to charge more?

08 Jan 15

InternetNZ says it is perturbed by New Zealand’s top ISPs rushing to increase their broadband prices in the face of the Commerce Commission’s draft decision to lift the wholesale price of copper.

Jordan Carter, InternetNZ chief executive, says he’s not 100 per cent certain the price rises are necessary.

“What we’re seeing is something akin to the petrol industry. A model I hope the Internet market isn’t going to follow,” he says.

“There occurs the slightest hint of a wholesale price rise and the providers are sending out letters to their customers telling them they have to pay more.

“Whether they need to do this to cover the costs of wholesale isn’t proven, and it’s certainly on shaky ground that Vodafone need to increase their fibre costs when fibre pricing isn’t affected at all.”

Spark and Vodafone both announced they will increase their broadband prices in 2015, with Spark saying it was taking an urgent review of all broadband fixed voice customer pricing, with increases of $4 to take place from February 1. Vodafone likewise will increase their broadband and home phone plans from $4 from February.

InternetNZ says that it’s been disappointed in the Commerce Commission’s unwillingness to provide certainty to the industry and thinks that this is likely to be the excuse behind the price rises.

“The wild fluctuations in pricing could have been avoided, but we are where we are now. This means working hard to provide a competitive and fair retail market for internet services,” Carter says.

“Comments that New Zealand is unlikely to see internet as cheap as it was before Christmas ever again seem to show an almost cartel-like behaviour. One goes and they all see it as an excuse to take a bit more money from the wallets of Kiwis.”

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