Telecom competitors have been priced “out of the game” by the Commerce Commission determination on sub-loop unbundling released today, says Orcon.
In a statement, Orcon CEO Scott Bartlett says the Commission’s determination is flawed and provides a pricing structure for unbundled sub-loop services that will inevitably lead to market domination by one player.
“The service is prohibitively expensive – we simply cannot see any one player having the necessary fixed-line market share to deploy new infrastructure, certainly no single player does today.
“With this determination, any player would need between 25 and 30 per cent market share to engage in sub-loop unbundling. That’s about as much as the entire non-Telecom industry players combined.”
By pricing Telecom competitors out of the game, the Commission has failed to protect the interests of consumers, Bartlett says.
Orcon has previously written to the Commerce Commission warning that if the right conditions for sub-loop unbundling are not set, there was a “very real risk” that Orcon and other ISPs would be precluded from investing any further in the broadband market.
Bartlett reiterated this in today’s statement saying the Commission’s decision lacks any alternatives for continued investment in local loop unbundling, and takes the country back to the ‘bad old days’.
The improvements in broadband price, speed and service that users have enjoyed over the past two years, a result of competition brought about by unbundling, may now be coming to an end, states Bartlett.
The move to fibre to the home is also at risk: “Every player in the broadband market agrees that fibre to the home is the right solution eventually. But we’ve just had one of the rungs of the ladder of investment pulled from under us.”
Read Orcon’s full statement here.
Vodafone has previously raised similar concerns about how the pricing of unbundled local-loop services could impact ongoing competition in the broadband market. However, it has not commented yet on the Commission’s decision today and has not responded to a request for comment.