Ultra-fast prices hard to determine, industry says

Privately held negotiations and the complexities of delivering fibre internet mean the retail prices of ultra-fast broadband are still unknown, say industry commentators.

Using documents containing the planned wholesale prices on the Government's fibre scheme, the Herald predicted yesterday that consumers could be paying between $50 and $80 a month for fibre internet access, depending on the speed of service they wanted.

However, Telecommunications Users Association (Tuanz) chief executive Paul Brislen said prices could be much higher than this.

"The prices quoted were not the full picture, it's going to be a lot more than that. It's now up to the 13 retail providers who are going to be making products available first-off-the-block in Northland next month to come out and name their retail markup," Brislen said.

Wholesale prices are what the owner of fibre infrastructure, and winner of the Government's broadband contracts, will charge internet service providers for using the network.

Retail prices are what consumers will pay for using internet services.

IDC's Rosalie Nelson said there were a number of variables which could impact what end-users pay.

Service providers may have to invest in new equipment or upgrade their networks to cope with increased internet traffic, both of which could have an impact on their markup, she said.

"The gap between the retail rate and wholesale rate is really hard to determine at this point, even the retail service providers are struggling to get their head around the detail on it," Nelson said.

Brislen said the secrecy surrounding the process was "the heart of the problem".

"They're negotiating the next 10 years' worth of pricing behind closed doors in commercial negotiations when in fact it should be out in the open for everyone to see," Brislen said.

Internet NZ head Vikram Kumar agreed and called for more transparency and debate.

"We don't have to know about the actual prices in commercial negotiations but there's been absolutely no discussions at all on whether prices should be set for 10 years or not," Kumar said.