Chorus says cheap copper line access may deter fibre buy-in 4 May 2012
- MARKET CLOSE: NZ shares rise, led by Tower, Fletcher Business
- NZ dollar little changed as investors await US economic data Business
- Sky TV programming costs likely to rise vs revenue in 2016 Business
- NZ employees rate work-life balance as top priority Recruitment
- Green Cross annual profit falls 4.1% on higher staff costs Business
- UPDATE: Scott Technology cuts 13 jobs after 'busy' 2014: CEO Business
- Scott Technology cans 13 staff, moves to more temps: EPMU Business
- 2degrees posts reduced loss of $33.6M, will launch UFB soon Business
- UPDATE: FMA gives NZX clean bill of health on oversight Business
- Chorus says RMA fix needed to aid fibre rollout 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.
26 May 2015 News
Horizons Regional Council Waitangi signing commemorated 175 years on A Rangitikei River stone monument commemorating a significant... more
26 May 2015 Business News
NZ trade surplus narrows as expected in April as whole milk powder exports decline May 26 (BusinessDesk) - New... more
23 May 2015 Lifestyle
The pride and glory of winning The Ultimate Waterman is relived for Kiwi Daniel Kereopa in a documentary that went live online this... more
22 May 2015 Property
Building and Housing Minister Dr Nick Smith today released at the Certified Builders’ Association conference in Christchurch... more
20 May 2015 Property
Goodman Property lifts FY earnings 5.4% on revenue growth, cost clamp down May 20 (BusinessDesk) - Goodman Property Trust,... more
30 Apr 2015 Migration
The Immigration Amendment Bill (No 2) which cracks down on employers who exploit migrant workers passed its final reading in... more
21 May 2015 Travel & Tourism
New Zealand Government Hon Nathan GuyMinister for Primary IndustriesHon Nicky WagnerMinister of Customs 21 May 2015 Border clearance... more
26 May 2015 Cricket
DAY FIVE: First Innings: England 389 (Root 98, Stokes 92; Henry 4-93, Boult 4-79) v BLACKCAPS 523 (Williamson 132, Guptill 70) in the... more
22 May 2015 Opinion
From the outset, the slogan for yesterday’s Budget - “The Plan Is Working” – begged to be mocked.... more
30 Apr 2015 Opinion
For the past week or so we’ve been hearing a lot about the child-like side of our Prime Minister. So I guess we... more
26 May 2015 People
Youth Minister Nikki Kaye today announced the recipients of the 2015 Youth Awards. Winners will be presented with awards at a... more
26 May 2015 Press Releases
NZ employees rate work-life balance as top priority, while job seekers eye cash, survey shows May 26 (BusinessDesk) - New... more
15 May 2015 State of the Market Report
NZ's growing ICT sector drives rapid economic diversification, Joyce says May 15 (BusinessDesk) - New Zealand's information... more