We’re proposing adjusting the prices we charge for fibre services under the Reference Offer by reference to CPI from 1 October 2021. We want your feedback on these proposed changes.

 

What’s happening?

Data usage on our UFB fibre continues to grow at record levels. Before COVID-19, data usage on the Chorus network was regularly peaking at 2.3Tbps. Over the past year we have seen data usage continue to grow, now exceeding 3Tbps. In March 2021 we’ve seen data usage surging to a record high of 3.2Tbs - that's 39% higher than pre-COVID levels. 

In order to meet this significant increased demand, we’re continuing 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 most fibre services under the Reference Offer by reference to CPI from 1 October 2021. Crown Infrastructure Partners (CIP) advises us of the percentage by which the CPI – All Groups index for the March quarter 2021 exceeds the March quarter 2020. The current prices will be increased by this percentage (i.e. the CPI inflation rate) which has been confirmed at 1.52 percent.

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 October 2021, other than:

• Hyperfibre – Hyperfibre services have been available in all of UFB1 areas nationwide since 12 October 2020. Given these products were only recently introduced to market, we don’t propose any CPI adjustment to the price of these services from 1 October 2021. 
• Small Business Fibre – In June 2020 we committed to holding the price of Small Business Fibre for 2 years. Given this, we don’t propose any CPI adjustment to the price of this service from 1 October 2021.
• RGW ONT – Given this is a new service we don’t propose any CPI adjustment to the price from 1 October 2021. 
• Chorus Relay Connect – Chorus Relay Connect was launched 4 May 2021. Given this is a new service we don’t propose any CPI adjustment to the price from 1 October 2021. 
• Chorus Data Connect – Chorus Data Connect was launched 4 May 2021. Given this is a new service we don’t propose any CPI adjustment to the price from 1 October 2021. 
• 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.

Important note: This proposed CPI price increase remains subject to internal approvals.

 

In reviewing the proposed CPI increases, RSPs may want to consider the mitigation offered by the various incentives we currently offer. We have a revised suite of RSP incentives in market through to 31 December 2021:

• Mix it up – To encourage households to update to the best fibre and receive up to $360 in credit.
• Inactive ONT incentive – An acquisition and upgrade offer for any RSP looking to increase their fibre base (credits of up to $600).
• Basic Fibre – A consumer 'Basic Fibre' offer for the price seeker segment of the market. The incentives under this offer will be adjusted by any CPI price increase.
• RGW ONT offer – A one-off $50 credit for every qualifying connection.
• Hyperfibre install offer – To encourage early adoption we're discounting our ONT upgrade fee by $199.

 

Summary of key milestones 

You can see a summary of the key milestones for this CPI price change process here. The next step in the process is consultation, which opens today and runs until Wednesday 2 June.

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 Tuesday 25 May and will be held virtually.  For more details on how to participate in this meeting, see Next Steps below.
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 Wednesday 26 May.  You can view the template for the Q&A Register and find out more details about how the Q&A Register will work.
High-level summary of consultation feedback	We’ll publish a Customer Update on Wednesday 7 July letting you know whether: we have decided to go ahead with the proposed price change, and there are any amendments to the proposal we’ve consulted on as a result of feedback. We’ll include a high-level summary as part of that Customer Update.  Our default position is that we won’t identify the service providers who gave feedback nor what feedback belongs to which service provider. We’re open to making a connection between you and your feedback as part of the summary, if you tell us you want us to do so.

 

What’s Next?

We’ll be hosting a meeting from 2.00-2.30pm on Tuesday 25 May. The meeting is to provide background information about, and an explanation of the rationale for, the proposed changes.

All service providers are welcome to attend this meeting. If you want to attend, contact Roxinne McCord to register. Dial-in details will be included in the calendar appointment.

We won’t be taking any questions or feedback on the changes during the meeting. If you do have questions or feedback, please send this to us as set out below.

 

Questions about the proposed price change

If you have any questions about the proposed price changes, please send them to QARegister@chorus.co.nz. The register is open for you to log questions from today until 5pm on Wednesday 26 May.

 

Consultation Feedback

We’d like your feedback on the proposed price changes by 5pm on Wednesday 2 June. We’re specifically interested in your thoughts what fibre services are in scope/out of scope. Please send your feedback directly to CPIFeedback@chorus.co.nz.

You’ll need to let us know whether you want your feedback to remain anonymous or not (i.e. do you want us to publicly make a connection between you and your feedback as part of the high-level feedback summary we intend to provide to the industry once consultation closes).

 

Everything at your fingertips

We’ve created a dedicated space on the Chorus Service Provider website in which you’ll find all the information about these proposed price changes. You can find that here.

 

Contact

For any queries please contact Roxinne McCord or Alan Mitford-Taylor in the first instance.