Overview
Uptake of our UFB fibre continues at record levels. We have more than 55% fibre uptake in UFB areas – making fibre demand far higher than anticipated in the original build programme which targeted 20% by 2020. In order to meet this significant demand (including getting ready for the Rugby World Cup at the end of last year), we’ve had to bring forward our investment in infrastructure. We want to take any opportunity available to us to generate a fair return on that investment.
As a result, we’re proposing adjusting the prices we charge for fibre services under the Reference Offer by reference to CPI from 1 July 2020.
Calculating the CPI increase
We’ll calculate the percentage by which the CPI – All Groups index for the March quarter 2020 exceeds the March quarter 2019. The current prices will be increased by this percentage (i.e. the CPI inflation rate). As a reference point, from the December quarter 2018 to the December quarter 2019, the CPI inflation rate was 1.9 percent.
What fibre services will the increase apply to?
You can check out a full list of the fibre services to which these proposed price changes will be applied here. Broadly, we’ve proposed applying a CPI price increase to all fibre services we provide under the Reference Offer from 1 July 2020, other than:
- Hyperfibre – In November 2018 we told you about our plan to launch our new Hyperfibre product suite, including consumer and business plans. Hyperfibre services have been available in Queenstown and surrounding areas since 13 January 2020, with a schedule for wider rollout for this service published here. Given these products are new to market, we don’t propose any CPI adjustment to the price of these services from 1 July 2020. [Note: Release of the Hyperfibre service is subject to Crown Infrastructure Partners (CIP) approval.]
- Fibre Max (Gig) – In November 2018 we let you know the price of the consumer and business Fibre Max plans would reduce further from 1 July 2020 as follows:
|
NGA Plan |
Current price |
From 1 July 2020 |
|
Consumer Max 500 2.5-2.5 |
$60.00 |
$56.00 |
|
SME Max 500 2.5-2.5 |
$70.00 |
$66.00 |
As a result, we don’t propose any CPI adjustment to the price of these services from 1 July 2020.
- Small Business Fibre – In July 2019 we launched Small Business Fibre. Given this product is relatively new to market, we don’t propose any CPI adjustment to the price of this service from 1 July 2020.
- Tail Extension Service (TES) – In December 2019 we told you we were working on a national TES service which we intended to launch in March 2020. We shared with you the proposed pricing for that service at the same time. Given the imminent launch of this service, we don’t propose any CPI adjustment to the price of these services or any other TES services currently available from 1 July 2020.
- New services - any new services launched by us after the date of this Customer Update. If we launch any of these types of services, we’ll provide appropriate pricing information related to those services at the time of launch.
What are the key milestones in the CPI price change process?
You can see a summary of the key milestones for this CPI price change process here. The first step in the process is consultation. We have summarised the proposed consultation framework we will use to govern our engagement with you here. The key features of the framework include:
|
Feature |
Commentary |
|
A session to explain the proposed price changes |
We’ll host a meeting to provide background information about, and an explanation of the rationale for, the proposed changes. This meeting is scheduled for 2.00-2.30pm on Monday 9 March at our office in Auckland (Chorus House, Level 16, 66 Wyndham Street). All service providers are welcome to attend this meeting. If you want to attend, contact Hannah Croft (hannah.croft@chorus.co.nz) to register. Dial-in details are available if you can’t attend the meeting in person. |
|
Q&A Register |
We’ve developed a Q&A Register, whereby service providers may log public queries for us to answer about this proposed CPI price change. The Q&A Register will be open for the first week of the consultation period and will close on Friday 13 March. You can view the template for the Q&A Register here and find out more details about how it will work here. |
|
High-level summary of consultation feedback |
We’ll publish a Customer Update on Monday 30 March letting you know whether we have decided to go ahead with the proposed price change and if there are any amendments to the proposal we've consulted on as a result of feedback. We’ll include a high-level summary of the consultation feedback as part of that Customer Update. |