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Published Wednesday 21 Jun 2017


The Commerce Commission has today released a study showing that 90% of the recent reductions in Chorus’ regulated wholesale broadband prices have flowed through to consumers.

 

Reproduced from the Commerce Commission’s media release "Wholesale broadband price drop passed through to consumers" dated 21 June 2017.

The Commerce Commission has today released a study showing that 90% of the recent reductions in Chorus’ regulated wholesale broadband prices have flowed through to consumers.

In December 2015 the Commission announced its final decisions on the wholesale prices Chorus could charge internet providers for its broadband services over local lines. Those decisions produced a net decrease of just under $4 per month per customer compared to wholesale prices a year earlier.

The study looked at a sample of approximately 80,000 residential consumer bills from Spark, Vodafone and Vocus between March 2012 and June 2016.  

Telecommunications Commissioner Dr Stephen Gale said the Commission wanted to assess the effect of its regulatory decisions on average retail prices.

“We’re pleased that nearly 90% of the wholesale price drop has been passed through to residential consumers. In this case our regulation reduced wholesale prices and it’s good to see consumers benefitting. At the same time as average prices have been falling, it’s also good to see the value of standard bundles continuing to increase with consumers getting more data for their dollar.” Dr Gale said.

A video of Dr Gale discussing the study in more detail can be found here. The full study is on the here.


Background

The Commission regulates the wholesale inputs that are required to supply broadband services and retail fixed-line voice services. Although we only regulate wholesale telecommunications services, considering how our decisions have affected retail prices allows us to understand the impact on residential consumers.

As part of our monitoring role, we also want to better understand competition at the retail level. To do this we considered the effect of changes in wholesale broadband prices on retail prices for fixed-line services.