Chorus to become ‘active wholesaler’

Chorus has unveiled plans to try and stem the drain of fixed line broadband services, resulting mainly from retailer Spark’s aggressive moves to migrate customers to its fixed wireless broadband service.

In November 2016 Spark announced a plan dubbed ‘Upgrade New Zealand’ to get as many of its broadband customers as possible off copper networks by moving high data volume users to fibre and others to wireless broadband.

CEO Kate McKenzie told the company’s AGM yesterday that the biggest challenge facing Chorus was the loss of connections to other networks. “Total connections reduced by about 125,000 last year and by a further 20,000 in the first quarter to the end of September,” she said.

In response, McKenzie said Chorus had “gone from being a passive wholesaler to being more active in the marketplace. We can’t rely on all retailers to promote our products for us when they have their own competitive motivations.”

She said Chorus was not looking to becoming a retailer, but said: “we do think we have an important role to play in helping to ensure that consumers have accurate information about their broadband options. As independent data from TrueNet has shown, fibre and VDSL are excellent broadband products, and ADSL broadband matches fixed wireless for webpage browsing.”

She added: “It’s great to see Consumer New Zealand also stepping up in terms of the information it is providing to customers. Their recent report confirms their view that some of the claims being made about wireless performance don’t stack up relative to fixed line options given speed, data and congestion limitations.”

When it reported its FY17 results in August McKenzie said the company had launched an advertising campaign in May to promote the benefits and availability of better fixed line broadband in response to the growing competition from wireless broadband.

She said the campaign was achieving results. “The decline in connections has slowed progressively in the last few months and broadband connections through the first quarter were almost flat.’

Chorus makes the case for fixed broadband

In August Computerworld NZ reported the release of a consumer infographic from the Commerce Commission suggesting it could undermine Chorus’ efforts to promote fixed broadband services as being superior to fixed wireless. The Commission cited data from TrueNet indicating that wireless was superior to ADSL for web browsing.

In its annual results announcement Chorus cited TrueNet’s Urban Broadband report of July 2017 to claim the average download speed for a web page using fixed wireless to be 8Mbps, ADSL 9Mbps, VDSL 16Mbps. The Commerce Commission infographic, however shows fixed wireless at 10-40Mbps, ADSL and 5-15Mbps and VDSL at 20-55Mbps.

The article produced a response from Chorus, which stated: “We don’t feel at odds with the Commerce Commission’s infographic on choosing a broadband technology in New Zealand. They’re simply using different TrueNet data from that which we chose for our full year results. In fact, we welcome any and all efforts to help educate NZ consumers on the broadband technologies available to them.

“In the Commerce Commission’s graphic they chose to use each technology’s peak speed (from the TrueNet data) as the comparator. Whereas our in our full year results we focused on the web-browsing performance of fixed broadband versus fixed wireless at peak hours. The point being that ADSL2+ and fixed wireless are pretty much comparable for basic browsing.”

“The other use case for broadband we focused on in our results was streaming video. In particular highlighting the differences between buffering on fixed (less than one percent) and fixed wireless (17 percent) for video streaming. Interestingly, what we haven’t focused on is if your fixed wireless service is giving you 27Mbps (at a peak time from TrueNet data) then with a 120GB data cap you’ve only got 20 minutes or so a day of streamed content before you’d exceed your cap.”

Copyright © 2017 IDG Communications, Inc.

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