Spark issues price changes following Chorus wholesale copper line costs

Spark issues price changes following Chorus wholesale copper line costs

“Given this negative uncertainty, Spark has no choice but to change its prices now."

Spark will change the price of selected homephone and broadband plans from 1 February 2015, following last week’s Commerce Commission draft decision on the amount that Chorus can charge Spark and other Retail Service Providers (RSPs) for access to the Chorus copper wholesale network.

Last week’s draft decision signalled a $5.40 increase (incl.GST) in the wholesale charges for homephone lines that have been in place for the past two years as well as $4.54 increase (incl. GST) in the broadband lines charges that took effect on 1 December, 2014.

According to the telco, Chorus has argued that an increase in charges to Spark and other RSPs must be backdated, and the Commerce Commission has yet to give a view on this matter.

As a result, the price of Spark’s homephone-only plans and the 40GB and 80GB broadband plans (ADSL and VDSL, excluding Ultra Fibre plans) will go up by between $2.50 and $4.25 a month from 1 February 2015 with a similar increase expected in the price of business copper broadband plans.

While these increases will affect lower-end plans, Spark says it will continue delivering "more value" to its customers by lowering the price of Unlimited Broadband Data and homephone packages – also from 1 February.

These price changes affect Spark Home, Mobile and Business services while Spark Digital will be contacting its medium-to-large business and government customers to discuss any increases for Spark Digital services.

“Over the past two years we have been competing hard in the broadband market on the basis that there would be a $10 reduction in the monthly charge we pay Chorus for providing copper broadband access," says Chris Quin, CEO, Spark Home, Mobile and Business.

“Market competition has brought great value for customers and the expected wholesale cost reduction for Spark and other ISPs has been built into current broadband prices.

"For example, Spark’s basic $75 broadband package today would have cost customers $105 two years ago.

“Now it’s indicated that wholesale broadband access charges will go down by almost $5, rather than $10, and homephone access changes will go up by more than $5. We understand this is how the process works, but we do have to react accordingly.

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