KEY POINTS:
The fees that Telecom charges rivals to access its broadband network look set to come down but Callplus and ihug are still concerned they may not get an adequate margin after reselling to retail customers.
The Commerce Commission last week issued a draft decision on the pricing model for Telecom's broadband service - called unbundled bitstream - to ihug and Callplus.
Ihug regulatory manager David Diprose said the new pricing model would deliver a sustainable "retail-minus" price, and would likely mean that the wholesale fee would drop, but the commission needed to consider other issues when it decided the wholesale fee, such as the cost of "backhaul", about $2 a customer. Backhaul is the part of the network that runs from the exchange or street cabinet across Telecom's network to the customer.
Also, the price of data per gigabyte and how the broadband usage was agreed across the different plans influenced ihug's margin, he said.
Ihug and Callplus said a fair wholesale fee would be about $22, down from the commission's price of $27.76.
Callplus chief executive Martin Wylie said it was mostly happy with the pricing model "but we will tell you how happy when we see what the number will be."
Callplus has applied to the commission for compensation from Telecom but it did not know how much that would be due to commercial sensitivities, he said
Submissions on the draft decision are required by March 7 but it is not known when a final decision would be made on the wholesale fee.
