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Comparing broadband pricing - pre-LLU to post-UFB

Sarah Putt, Contributor. 25 September 2018, 10:20 pm

The latest stats on Ultra Fast Broadband uptake showed some good results for the network - with 74.8% of the fibre network complete - but what are the end-results for end-users? Have prices risen as speeds have improved?

To get a sense of how things might have changed I hunted out a copy of TUANZ Topics, the bi-monthly print magazine that the organisation used to provide its members. The June/July 2006 copy came out just after Local Loop Unbundling was announced, so it's a good indication of how the market was before any of the reforms took place.

An article on broadband pricing noted that the top three cheapest plans (on ADSL or copper) were all $49.95 per month, and offered the following:

  • Xtra Broadband Go - 2Mpbs download, 128Kbps upload, 1GB data limit
  • ihug Starter - 3.5Mbps download, 128Kbps upload, 2GB data limit
  • Slingshot Extreme 5GB - 2Mbps download, 128Kbps upload, 5GB data limit

The first thing to note is those three providers have all changed considerably. Xtra was the brand name of Telecom's broadband, and the company has now separated into Chorus and the retailer Spark. Ihug was bought by Vodafone, and Slingshot, while it exists as a brand-name is now part of Vocus.

So how does the cheapest pricing compare? To get a sense of the changes I went onto the Broadband Compare website and found the following touted as the cheapest plans with comparable speeds:

  • $54.95 - Flip (brand owned by Vocus) - 10Mbps download, 1 Mbps upload, 100GB data limit, ADSL connection
  • $59.00 - Amuri.net - 30Mbps download, 10Mbps upload, 30GB data limit, Fibre connection
  • $59.00 - Satlan - 30Mbps download, 10Mbps upload, 30GB data limit, Fibre connection
  • $59.00 - TVC - 30Mbps download, 10Mbps upload, 30GB data limit, Fibre connection

If you just take the cheapest plans, then pricing from pre-LLU to post- UFB has increased by between 9% and 15% (depending on ADSL or Fibre technology), download speeds by up to 93% , while data caps are massively different to what they were.

I'm not familiar with the providers of the cheapest fibre plans listed - Amuri.net, Satlan or TVC - but that's a point that the organisation Broadband Compare makes clear in a recent press release headlined: "Kiwi households are paying up to $400 a year too much for their broadband."

Apparently New Zealand broadband customers are sitting on legacy broadband plans with their old providers. "Households which let their broadband deals lapse or don't shop around at the end of their contracts are often paying significantly over the odds for their broadband bill and with Spark recently announcing it is increasing the price of copper broadband by $5 a month there will be an even bigger bills for almost 350,000 homes in New Zealand who remain on the old copper network."

According to Broadband Compare CEO Gavin Male the primary reason for households to switch providers is when they move to new house.

In a survey with 1919 respondents Broadband Compare found that those who made the effort to change broadband providers reaped the benefit. "Over the last quarter 19% of those who switched are now paying more for a better broadband connection with faster speeds or a bigger data cap and this is supported by the majority of respondents who switched provider moving to Fibre broadband plans (67%).  Of those that did not switch to a fibre plan only 27% had the option of fibre but did choose to take it up."

As with anything it pays to shop around but it seems that Kiwi broadband subscribers are a bit stuck in their ways.

 

 

 

 


Comments

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Andrew Pirie 02 October 2018, 5:27 pm

While I appreciate this blog is focused more on the impact of UFB on fixed broadband pricing, the analysis overlooked the impact of the big changes in the mobile sector that mean many NZers can now get broadband at significantly lower pricing on fixed wireless inputs than the lower end UFB broadband plans: e.g. Skinny broadband offers 60GB for $39, or 120GB for $49. These plans use 4G mobile connectivity where speeds can be more variable (slower than fibre 100 plans, but often broadly comparable speed-wise to fibre 30 plans). I note the three fibre 30 plans you cite in your blog (Amuri.net, Satlan, TVC) are all priced $20 a month higher than the low end Skinny plan, and yet offer only half the data (30GB vs 60GB).

I think this indicates how improvements in the mobile sector are offering customers a lot more choice and sharper broadband pricing, especially for those who only require a low to moderate data usage plan.


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