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'Money grabbing, tone deaf' - Vocus, Vodafone, 2degrees slam Chorus over fibre price increases

Tue, 14th Jul 2020
FYI, this story is more than a year old

Vocus, Vodafone and 2degrees have hit back against Chorus over its plans to increase wholesale broadband prices.

Vocus slammed the news from Chorus that it will increase fibre prices, labelling the move as "cynical, money grabbing and unwarranted".

Vocus, which operates the Orcon, Slingshot and Stuff Fibre brands in New Zealand, says Chorus has ignored industry feedback Kiwis are likely to bear the costs of the increases in broadband prices.

Vocus consumer and business chief executive officer Taryn Hamilton says the increases will likely hit Kiwi families in the pockets during a looming economic crisis and uncertain times.

"Chorus has announced increases to the most common New Zealand fibre broadband plan, which will equate to around $9m a year. Historically we have seen these increases passed onto consumers, and Chorus knows this," says Hamilton.

"We asked them to reconsider the increase given the immense pressure Kiwi households are under, but they have refused," he says.

Hamilton says the move is "a proft grab."

"It is not driven by a corresponding cost increase to run their business," he explains.

This week Chorus emailed NZ RSPs, saying: "We had feedback from five service providers. They all noted the uncertainty of the extent of financial impacts from COVID-19 and suggested it may be more appropriate if we further delayed the proposed increase, with views varied as to how long this delay should be. After considering all feedback received, we have decided to proceed with the proposed price changes from 1 October 2020."

Hamilton says that Chorus "continues to operate in a monopolistic bubble, reaping higher margins than the retailers who face slim margins and shoulder all the risk of bad debt that a prolonged recession could bring".

He notes that Chorus recently proposed a relief package, but says "this one-off offer was a drop in the ocean and failed to reflect the implications of a prolonged downturn".

"It is lacking detail and appears to be a cynical attempt to say it had helped retailers while putting up prices," Hamilton says.

"A casual glance at the NZX would suggest that Chorus is doing rather well of late, and all at the expense of the customer who will pick up the bill."

 Meanwhile, Vodafone said it was "hugely disappointed" Chorus will proceed with raising wholesale fibre prices in October.

"This tone-deaf move does nothing to help hard-working New Zealanders, who may need to pay more for their internet when connectivity matters more than ever," it said.

2degrees said, "Despite consistent feedback from its customers that New Zealand is heading into a recession and the price increase should be delayed, Chorus will use regulatory cover to increase the price of a service used by 80% of 2degrees' fibre broadband customers."

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