In a move clearly meant to stay competitive, Telecom New Zealand announced plans to slash the cost of its fiber optic broadband service in areas where it did not win contracts to roll out fiber under the country's Ultrafast Broadband (UFB) initiative.
Prices will drop to match those of competing providers who are installing broadband under contract. That means, for example, a 100 Mbps business connection will wholesale for NZD 380 (USD 320.65) per month, down from NZD 600 (USD 506.30) per month, according to Stuff.co.nz. Telecom is applying the pricing drop in cities like Christchurch and Hamilton as well as some smaller communities that are not covered by the UFB rollout.
In related news, Telecom's participation in the UFB in other areas of New Zealand will pay off in increased dividends down the road. Deutsche Bank on Monday re-rated Telecom shares from "hold" to "buy," upping its forecast share price over the next 12 months to NZD 2.92 (USD 2.46) per share, a NZD 0.43 (USD 0.36) increase.
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