Voda protests Telecom NZ pricing

Vodafone NZ has complained that prices set yesterday for competitors to access Telecom New Zealand's fibre-to-the-node roadside cabinets are too high for competitors to make a profit.

Vodafone NZ has complained that prices set yesterday for competitors to access Telecom New Zealand's fibre-to-the-node (FTTN) roadside cabinets are too high for competitors to make a profit.

No one is going to provide competition if it means losing money hand over fist, after paying Telecom

Vodafone NZ spokesperson Tom Chignell

Spokespeople for Telecom NZ told ZDNet.com.au that its recently spawned wholesale arm, Chorus, had completed its 778th roadside cabinet installation yesterday, which represented 20 per cent of the 3600 scheduled by 2011 that support the telco's (FTTN) roll-out.

Chorus' cabinets allow fibre-optic cables to replace copper between telephone exchanges and the roadside "nodes". Retail telcos including Vodafone, TelstraClear and Orcon are able to install their own equipment within the cabinets.

The NZ Commerce Commission regulator yesterday calculated the cabinets' monthly cost at NZ$972. Retail telcos' monthly access fee will be based on the space their equipment consumes in a cabinet, the commission decided.

But Vodafone New Zealand has complained that the pricing made access to "all but a few cabinets" economically infeasible.

"An access seeker with a 10 per cent market share of an average cabinet would pay Telecom NZ$184 per customer per month, excluding set-up costs. Taking an average revenue of NZ$90 per customer per month, the lack of viability becomes clear," Tom Chignell, Vodafone's general manager of corporate affairs said.

"No one is going to provide competition if it means losing money hand over fist, after paying Telecom," he added.

The commission also set urban area access to the copper between the node and a home at NZ$11.99 per month, while urban backhaul access will cost NZ$1197. Non-urban fees have been set respectively at NZ$22.14 and NZ$3,197 per month.

Telecom NZ and the New Zealand Government are also part way through similar separation issues that face Telstra as the Australian Government mulls over telco regulatory reform amid calls from rivals for Telstra's separation.

New Zealand Minister for Communications and Information Technology, Stephen Joyce, on Wednesday approved Telecom's request for a "variation" to its separation undertakings, which he said will result in a six- to 12-month delay in reaching equivalence milestones there. It formally separated on 31 March 2009.

"Implementation of the varied separation undertakings will delay full equivalence related milestones for delivery of unbundled lines and backhaul by six to 12 months," said Joyce.

The variations will impact Vodafone, TelstraClear and Orcon, which have been granted equal access to Telecom's cooper network exchanges. Joyce said the delay meant access seekers would also see improvements in wholesale service delivery ahead of the previous timetable due to the variations.

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