New Zealand can offer its residents 1Gbps broadband plans for NZ$130 (A$120) a month because the access virtual circuit (AVC) charges are low, the ISP MyRepublic says.

Additionally, the connectivity virtual circuit prices (CVC) are included in the AVC, a spokesperson added.

In response to queries, after reported comments from the company's chief executive Nicholas Demos that a 1Gbps connection in Australia would cost between A$300 and A$400, the MyRepublic spokesperson said: "New Zealand has similar geographical challenges to Australia for high-speed fibre broadband.

"However their wholesale AVC and CVC pricing models are very different to Australia's."

In Australia, the AVC charge for a 100Mbps connection is A$38 while the CVC is A$15.25 per Mbps (1.4Mbps required). In New Zealand, a connection of the same speed would cost between NZ$43-NZ$45, which included the CVC.

The difference in a 1Gbps connection was even more, the spokesperson pointed out. In New Zealand, there was an AVC charge of between NZ$60 to NZ$65 which included the CVC charge. In Australia, the AVC was A$150, while the CVC was A$15.25 per Mbps, with 2.5 to 3Mbps required.

Costs such as backhaul, operations, sales and marketing and telephony costs are excluded from these amounts.

The spokesperson said that in Australia, the 1 Gbps product was being viewed as a premium product, "but not so premium that is out of reach for Australian households and small business owners".

The current AVC and CVC pricing would make 1Gbps prohibitively priced, the spokesperson said.

"While we are encouraged at NBN Co's current initiative to reduce CVC pricing, it's when you compare the Australia and New Zealand’s wholesale pricing models that you can see why speeds of 1Gbps are offered by the majority of NZ ISPs and not in Australia."

The spokesperson said an overall review of the wholesale pricing model to make it more in line with New Zealand would mean that Australian ISPs would be able to offer customers affordable 1Gbps speeds.

"By launching Gigatown, MyRepublic wants to demonstrate the benefits of the 1Gbps plan for consumers and small business to encourage further wholesale pricing reviews," the spokesperson added.