Video | Agriculture | Confidence | Economy | Energy | Employment | Finance | Media | Property | RBNZ | Science | SOEs | Tax | Technology | Telecoms | Tourism | Transport | Search

 


Chorus pricing decision very problematic, says Key

Chorus pricing decision very problematic, says Key

By Pattrick Smellie

Dec. 3 (BusinessDesk) - The Telecommunications Commissioner's draft decision on access to switchgear on the copper telecommunications network is "very problematic" and the government won't rule out legislating to get the outcome it wants, says Prime Minister John Key.

His comments came as shares in the copper network owner, Chorus, fell 14 percent to $2.91, three cents lower than its listing price when it was separated from Telecom in November last year as a fundamental part of reforms associated with the government's $1.35 billion subsidy for an ultra-fast broadband network.

Telecommunications Commissioner Stephen Gale's decision is good for consumers, at least short term, because it requires lower than expected prices for access to the existing telecommunications network, which is based on copper wire.

But it threatens to undermine the uptake of UFB by making copper more competitively priced than the new fibre-based network. Copper-based services are unable to deliver broadband speeds as high as through the UFB fibre network, but technology improvements make it very fast and lower prices could keep it competitive with UFB for longer.

The UFB network is a flagship government policy, but requires uptake of UFB to ensure roll-out of the network continues to spread, as revenues from uptake will be funnelled back into further expanding the network.

If consumers stay with copper-based services for longer, the UFB roll-out risks stalling for lack of demand.

Key pointed out at his post-Cabinet press conference that an earlier draft decision from Gale's predecessor, Ross Patterson, on pricing for the unbundled local loop, had been substantially modified after submissions.

Both Chorus and Telecommunications Minister Amy Adams had indicated serious concerns about the draft decision on unbundled bitstream access (UBA) before Key's comments, with Chorus warning it could cut earnings by up to $160 million a year.

(BusinessDesk)

© Scoop Media

 
 
 
 
 
Business Headlines | Sci-Tech Headlines

 

Gordon Campbell: On Tiwai Point (And Saying “No” In Greece)

Its hard to see how Rio Tinto’s one month delay in announcing its intentions about the Tiwai Point aluminium smelter is a good sign for (a) the jobs of the workers affected or (b) for the New Zealand taxpayer. More>>

ALSO:

Half Empty: Dairy Product Prices Extend Slide To Six-Year Low

Dairy product prices continued their slide, paced by whole milk power, in the latest GlobalDairyTrade auction, weakening to the lowest level in six years. More>>

ALSO:

Copper Broadband: Regulator Set To Keep Chorus Pricing Largely Unchanged

The Commerce Commission looks likely to settle on a price close to its original decision on what telecommunications network operator Chorus can charge its customers, though it probably won’t backdate any update. More>>

ALSO:

Lower Levy For Safer Cars: ACC Backtracks On Safety Assessments

Dog and Lemon: “The ACC has based the entire levy system on a set of badly flawed data from Monash University. This Monash data is riddled with errors and false assumptions; that’s the real reason for the multiple mistakes in setting ACC levies.” More>>

ALSO:

Fast Track: TPP Negotiations Set To Accelerate, Groser Says

Negotiations for the Trans-Pacific Partnership will accelerate in July, with New Zealand officials working to stitch up a deal by the month's end, according to Trade Minister Tim Groser. More>>

ALSO:

Floods: Initial Assessment Of Economic Impact

Authorities around the region have compiled an initial impact assessment for the Ministry of Civil Defence, putting the estimated cost of flood recovery at around $120 million... this early estimate includes social, built, and economic costs to business, but doesn’t include costs to the rural sector. More>>

ALSO:

Get More From Scoop

 
 
 
 
 
 
 
 
 
Business
Search Scoop  
 
 
Powered by Vodafone
NZ independent news