The Commerce Commission has raised how much Chorus can charge internet service providers for access to its copper lines network and broadband services.
Photo: RNZ
It has set the price at $41.19 a month for the first year, which will rise to $42.35 for the following five years.
A year ago, the Commission forced Chorus to cut its charges to $34.44 from $45 a month while it investigated how to set a final price.
"Significant changes, such as the need to increase the amount of trenching required to physically lay the network and adjusting the make-up of fibre and fixed wireless connections, led to the final price rising," Telecommunications Commissioner Stephen Gale said.
Chorus had complained the price controls underestimated the cost of installing and maintaining its network and were seriously hitting its revenue.
It also said the lower prices were jeopardising the roll-out of the government-funded ultra-fast broadband network it was building.
The telecommunications operator cut its spending and suspended dividends to bolster its finances.
The Commission said the new price would take effect from today and Chorus would not be able to recover the difference between the old and new charges.
Chorus said the new prices would boost its operating earnings by about $120 million a year.
"We have consistently said that the previous draft prices significantly underestimated the true value of Chorus' network, so it is pleasing that the Commission has taken on board the industry's repeated requests and used some of the real world costs of building a network," Chorus chief executive Mark Ratcliffe said.
The telecommunications operator was not ruling out court action over its inability to backdate the price change, he said.
"It'll need a lot of review for a whole bunch of things before we make any decisions on that.
"There's quite a long window before you need to make that call... but we'll look to update people as soon as we possibly can."
Worst possible Christmas present - Spark
Internet service provider Spark said it would have to pass on the higher cost to customers.
The company's managing director Simon Moutter said it would increase both voice and broadband charges in line with the change.
"It's a $3m a month cost increase for Spark alone, and our industry colleagues will be seeing similar margins with cost increases, so naturally that will have to pass through to the end customer."
Mr Moutter described it as the worst possible Christmas present for New Zealand consumers.
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