Chorus says cheap copper line access may deter fibre buy-in 4 May 2012
- Dairy prices way below 'fair' value, must rebound: Spierings Business
- NZ dollar heads for 0.9% weekly drop Business
- Dorchester closes oversubscribed $30M capital raise Business
- NZX says it doesn't know why shares have declined Business
- Sky TV to launch $20/month subscription ondemand service Business
- Cavalier shares drop 10% after profit warning Business
- MARKET CLOSE: NZX 50 rises to record, led by Sky TV on rugby Business
- Sky TV sees annual profit gain of up to 8.6% in 2015 Business
- Heartland NZ chief risk officer resigns Business
- DNZ revalues portfolio by $10.7 million Business
Chorus, the telecommunications network operator carved out of Telecom last year, is warning that the industry regulator's bias toward cheaper access to the ageing copper lines may discourage buy-in for the fibre network under construction.
In a draft determination, the Commerce Commission indicated it wants to reduce the geographically averaged unbundled copper local loop (UCLL) service to $19.75 a month from its current price of $24.46 over two years.
UCLL lets Chorus's competitors use the copper network between an exchange and an end-customer's premise to offer their own voice and broadband services. The current urban price only has to come down $19.81, and the biggest access gains would be in non-urban areas, which are sitting at $36.63.
Chorus says the draft decision, if ratified, would impact on about 6 percent of its copper-based access services, based on current volumes, and foreshadows more regulator intervention.
"Chorus is disappointed that this creates uncertainty for investors and industry," the company said in a statement. "At a time when New Zealand is making a very significant investment in building a fibre world, Chorus is concerned that the commission's draft decision creates a potential disincentive for retail service providers and end customers to transition to fibre services."
Wholesale prices for access to the copper lines were averaged as a result of legislation enabling Telecom to carve out its Chorus unit last year, something that rankled with rival telecommunications companies who claimed it would lift their costs. The de-averaged urban and non-urban prices are $15.82 and $29.19 respectively, the regulator said.
At the time, Ministry of Economic Development officials downplayed concerns about the impact on copper-line prices, saying it wasn't "deemed significant" and that any increase in UCLL pricing may “have the positive impact of encouraging more investment and innovation on fibre.”
Chorus is holding an investor conference after midday to discuss today's announcement.
The shares fell 1.4 percent to $3.52 in trading yesterday. The stock has gained 20 percent since listing in November last year.
The regulator wants to cut the geographically averaged price after relaxing population density criteria because New Zealanders are spread more thinly around the country than other nations.
The commission is also consulting on whether there are grounds to investigate whether the pricing principles for the unbundled copper low frequency service (UCLFS) should be tweaked. The UCLFS lets telecommunications companies access and connect with the low frequency in Chorus' copper local loop network, which connects an end-user's building to the handover point in the local phone exchange.
The UCLFS price is the same as the UCLL price, though the differences are different. The UCLFS's copper loop has been shortened by as much as the UCLL copper loop, and Chorus may "under-recover forward-looking costs" for the low frequency service, the regulator said.
24 Oct 2014 News
Ottawa resident says shock turning to anger and hard questions being asked about how gunman got so far. A New Zealander in Ottawa was... more
24 Oct 2014 Business News
By Fiona Rotherham Oct. 24 (BusinessDesk) - Sky Network Television, the country's dominant pay-TV operator, will launch a new $20 a... more
24 Oct 2014 Food & Wine
Fresh from two consecutive MKR People's Choice Challenge wins, Neena and Belinda favour wholesome and earthy flavours and aim to... more
24 Oct 2014 Lifestyle
New Zealand comedians Guy Montgomery (Billy T winner, 7 Days) and Tim Batt (Radio Hauraki, 7 Days) have broken the world record... more
24 Oct 2014 Property
Aucklanders living in the ‘hottest suburbs’ could be the big losers, while businesses will come out winners Rate rises... more
15 Oct 2014 Property
The Resource Management Act needs to explicitly recognise the importance of New Zealanders’ access to more affordable housing... more
24 Oct 2014 Migration
New Zealand has been named the best place to raise a child in the Raising Children Abroad annual league table. According to the HSBC... more
24 Oct 2014 Travel & Tourism
Giving flyers an Unexpected Journey! Elijah Wood and Sir Peter Jackson star in 'epic' Hobbit themed Air New Zealand safety video Air... more
25 Oct 2014 Sport
The Black Sticks Women have won 1-0 against the USA, setting up a series decider in the final test tomorrow at the Trust House... more
24 Oct 2014 Rugby
Scotland coach Vern Cotter clears out old guard and makes Grant Gilchrist captain for November Test series No place for Barclay,... more
24 Oct 2014 Opinion
After all the delays and stonewalling, the St James finally looks to have a future, even if it’s not clear what it will be Let's... more
23 Oct 2014 Opinion
Gordon Campbell on the tokenism of New Zealand‘s role against Islamic State Was John Key born lucky or what? Political... more
24 Oct 2014 People
Veteran weathercaster Jim Hickey has announced his retirement today, saying is was a tough decision. "I feel like I'm subbing off at... more
24 Oct 2014 Recruitment
New Zealand paramedics are being poached by Britain's busiest ambulance service. Interviews were held in Auckland on Friday and... more