Chorus says cheap copper line access may deter fibre buy-in 4 May 2012
- NZ consumers grow more upbeat, may resume spending Business
- Knowles quits as CEO of KiwiBank Business
- NZ migration bolstered by British invasion Migration
- NZ manufacturing activity reaches highest since 04 Business
- NZ dollar hits 22-month high vs euro Business
- Budget provides $321m for RS&T activities News
- OceanaGold finds new gold deposits at Fraser mine Business
- Transpower gets go-ahead for $170m SI upgrade Business
- NZ home sales creep up in March, still subdued Property
- NZ economy expands at fastest pace in two years 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.
8 Feb 2017 Financial
7 Feb 2017 The Government's 2017 Budget will be delivered on Thursday 25 May, and will be centred on providing opportunities for all... more
8 Feb 2017 Business News
8 Feb 2017 A full cost-benefit analysis on Debt-to-Income (DTI) limits and public consultation will be conducted by the Reserve Bank... more
21 Nov 2016 Lifestyle
Emirates Team New Zealand EMIRATES TEAM NEW ZEALAND CLOSES IN 3rd POSITION THE LOUIS VUITTON AMERICA’S CUP WORLD SERIES
14 Nov 2016 Property
Article - BusinessDesk Monday 14 November 2016 10:28 AM NZ house prices gain 11% in October, driven by sales of higher value homes By... more
11 Nov 2016 Property
Article - BusinessDesk Thursday 10 November 2016 04:04 PM RBNZ sees pressures building in Auckland construction sector By Paul ... more
8 Feb 2017 Migration
7 Feb 2017 Immigration Minister Michael Woodhouse welcomes a report showing the vast majority of employers who take on seasonal... more
6 Feb 2017 NZ Tourism
8 Feb 2017 Does New Zealand celebrate halloween? Is Auckland a dangerous town- these are some of the subjects visitors Google... more
6 Feb 2017 Netball
6 Feb 2017 The Silver Ferns finished runners-up in the Netball Quad Series after completing a well-crafted 70-39 win over the SPAR... more
3 Feb 2017 Netball
The Silver Ferns completed a dominant outing to post a 61-37 win against the England Roses in their second match of the 2017 Netball... more
11 Nov 2016 Opinion
Column - Gordon Campbell Gordon Campbell on the Gareth Morgan crusade First published on Werewolf more
10 Nov 2016 Opinion
Column - Gordon Campbell Gordon Campbell on the US election outcome more
8 Feb 2017 Appointments
7 Feb 2017 Finance Minister Steven Joyce will appoint current Deputy Reserve Bank Governor Grant Spencer as the Acting Governor of... more
1 Feb 2017 Appointments
30 January 2017 Health Minister Jonathan Coleman has today appointed temporary Chairs to the boards of Canterbury and South... more
1 Feb 2017 Recruitment
1 Feb 2017 Tertiary Education, Skills and Employment Minister Paul Goldsmith has welcomed the record number of New Zealanders now in... more
8 Dec 2016 Recruitment
Hon. Paula Bennett, Hon. Michael Woodhouse, Hon. Louise Upston 24 November, 2016 The Government will update the Equa... more