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That explains it Add this story to Scoopit!.

I was puzzled by the fact the Commerce Commission set a $28.04 wholesale price for unconstrained UBS, when late last year it set the price at $27.87.

You see the wholesale price is calculated off the average Xtra retail price, and in early 2006 Telecom announced huge drops in Xtra pricing, so hence one would expect a drop in the wholesale price.

But as the Herald reports, while the monthly price dropped, there were reductions in non price terms such as data limits, and hence the overall value of the plan didn’t decrease by much, if at all!

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This entry was posted on Friday, June 23rd, 2006 at 8:42 am and is filed under Uncategorized. You can follow any responses to this entry through the RSS 2.0 feed. You can skip to the end and leave a response. Pinging is currently not allowed.

6 Responses to “That explains it”

  1. anonymouse Says:
    June 23rd, 2006 at 10:10 am

    So does that mean that that the Commerce commission believes that the service offered by “cheaper faster” telecom have deterioriated and you got better value for money when they were, “more expensive and slower”- bit of a damning indictment on Telecom really.

  2. Russell Brown Says:
    June 23rd, 2006 at 11:58 am

    This is amazing!

    It actually bears out every criticism of Telecom’s new “cheaper” plans.

    Confusion as marketing tool, anyone?

    Cheers,
    RB

  3. Juha Says:
    June 23rd, 2006 at 4:27 pm

    Working out the wholesale price relies on a convoluted formula – the weighted average retail price of Telecom’s Jetstream plans with 128kbit/s upstream, basically. The ComCom works it out, and then the access seeker gets a 16% discount on that.

    The plans are the Xtra:
    Basic
    Go
    Explorer
    Adventure

    with the older Discover and Navigate plans added because some customers are still on them. Then the Commission gets the number of customers on each plan (Telecom supplies these) and works out what percentage of the total this is. The percentage is then used for the weighting. This is a new formula apparently and you can’t check on it because the Commission has removed the data used in the public version of the determination.

    Callplus and Ihug expected the prices to be lower, calculated according to the same methodology as in the TCL determination:

    The Applicants submit that the Commission

  4. Nik Says:
    June 23rd, 2006 at 7:35 pm

    The reason for the increase could be that the take-up by customers of above-average priced 3584/128 plans has outweighed the take-up by customers of the below-average priced Basic plan. This would pull the overall average up.

    There are no plans which have increased in price or which have more restrictive data caps than their corresponding previous plan.

  5. Alex Says:
    April 17th, 2007 at 6:35 am

    works

  6. Anne Says:
    May 15th, 2007 at 10:25 pm

    pantera13

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