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

 

ETS Review: Modelling Documents Released

Three technical documents are being released to help New Zealanders engage with the Emissions Trading Scheme (ETS) review, Climate Change Minister Paula Bennett says. More>>

ALSO:

Northland: Govt Plan Targets Transport, Web, Maori Assets

The government has released a 10-year plan to attract investors and lift economic growth in Northland, a region that perennially underperforms the rest of the country even while being endowed with natural beauty, productive land, minerals, a potential workforce, scope for manufacturing, forestry and aquaculture, and proximity to Auckland. More>>

ALSO:

Statistics: Unemployment Rate Falls To 5.3 Percent

The unemployment rate fell to 5.3 percent in the December 2015 quarter (from 6.0 percent), Statistics New Zealand said today. This is the lowest unemployment rate since March 2009. There were 16,000 fewer people unemployed than in the September ... More>>

ALSO:

Employment: Labour Urges Talley’s To End AFFCO Lockout

Labour has urged Talley’s to resolve the ongoing industrial dispute with AFFCO workers which is having a severe effect on the employees, their families and their communities, Labour’s Workplace Relations spokesperson Iain Lees-Galloway says. More>>

ALSO:

Three Kings: Govt To Oppose Appeal Blocking $1.2B Auckland Housing Plan

Environment Minister Nick Smith and Housing New Zealand have joined legal proceedings in support of Auckland Council and Fletcher Building opposing a bid by community groups to only allow low-rise housing in a $1.2 billion housing redevelopment on the disused site of the Three Kings quarry. More>>

ALSO:

Transport: Jetstar Expands Regional Network With Three New Routes

More New Zealanders than ever before will have access to Jetstar’s affordable flights when new services take off today from Auckland to New Plymouth and Palmerston North, and Nelson to Wellington. More>>

ALSO:

Get More From Scoop

 
 
 
 
 
 
 
 
 
Business
Search Scoop  
 
 
Powered by Vodafone
NZ independent news