Telecom NZ calls for lower wholesale prices

New Zealand incumbent operator Telecom has recommended that the government set wholesale access prices for copper broadband networks at NZ$37.50 ($33.30).

The Ministry of Business, Information and Employment has launched a review of regulations governing wholesale copper broadband pricing during the transition phase of the nation’s Ultrafast Broadband (UFB) fibre network project.

The accompanying discussion document includes three options for setting prices during the period. Each option would result in competition regulator Commerce Commission setting a total copper wholesale access price in the range of NZ$37.50 to NZ$42.50.

In a submission to the review, Telecom NZ has urged the government to choose an input price at the bottom end of this proposed range.

Telecom NZ’s submission also argues for the third of the options for setting pricing, stating that it is the choice that offers the most certainty and the clearest incentives to continue investing in fibre.

Option three involves locking in the regulated price for unbundled bitstream access (UBA) to copper networks, but setting a new price point for unbundled copper local loop (UCLL) access.

This is in comparison to the first option - which involves setting prices based on UFB contract prices - and the second - involving the government setting a new price for the UBA service.

The third option would allow the wholesale price to be set by December 2014, rather than a year later as with the alternatives, Telecom NZ CEO Simon Moutter said.

“Telecom is not interested in getting bogged down in regulatory processes and simply wants certainty,” he said.

“Ongoing debates about copper pricing risk distracting our industry, and customers, from the far more important questions of how, as a country, we can best take advantage of the very valuable fibre assets we are investing in.”

Pictured: Telecom NZ SIM card. Image courtesy of Karl Baron under CC