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

 

No extra funding for Chorus in UFB deal with Crown Fibre

No extra funding for Chorus in UFB deal with Crown Fibre

By Paul McBeth

March 11 (BusinessDesk) - Chorus won’t get any additional government funding from Crown Fibre Holdings as part of a deal to help the telecommunications network operator manage cash flow and provide more certainty for the ultrafast broadband roll-out.

The Wellington-based company has been given greater flexibility in building the network provided it meets the agreed deadline to complete the national fibre network, and Crown Fibre Holdings will more closely align its existing funding with completed work provided it meets certain conditions, Chorus said in a statement.

The deal will give Chorus more scope in deploying UFB to areas where it already has existing fibre to meet property user targets by the end of next year, will let it make use of existing cabling to deliver UFB services to multi-dwelling units, and charge property developers for the reticulation of lines in greenfield UFB areas.

“While Chorus is firmly focused on managing its costs, both parties have worked on the basis that we need to find innovative ways to deliver better outcomes, and that would require a degree of give and take,” chief financial officer Andrew Carroll said. “This flexibility will enable Chorus to better manage its cash flow through the peak of the balance of the capital intensive period of the build, as well as addressing some of the $1 billion funding gap.”

Last month Chorus announced plans to scale back re-investment in its ageing copper network, which faces regulated price cuts, while introducing new unregulated revenue streams and cutting costs including probable job cuts. It also suspended payment of an interim dividend.

Last year the Commerce Commission proposed cutting the network operator’s pricing on its copper line services, which Chorus says has left a $1 billion hole in funding the roll out of the government-sponsored ultrafast broadband network.

Other changes to the agreement will see Chorus increase its non-standard installation fund by $8 million, while cutting its annual fibre marketing spend in half to $2.5 million.

The new agreement with Crown Fibre Holdings takes effect from tomorrow.

Chorus shares rose 0.5 percent to $1.56 yesterday, and have gained 8.3 percent this year after being punished by investors last year over the regulatory risk.

(BusinessDesk)

© Scoop Media

 
 
 
 
 
Business Headlines | Sci-Tech Headlines

 

Myrtle Rust: Infections Found At 26 Sites

The affected properties include private gardens, plant nurseries and retailers and an orchard. The stats stand at: 21 properties in Taranaki, 3 in Northland and 2 in Waikato. More>>

Burgers To America: BurgerFuel Opens In The USA

BurgerFuel Worldwide are excited to announce the opening of their first USA based restaurant in Indianapolis, hot off the back of the Indy 500. More>>

English On Budget: Businesses Over-Egg Corporate Tax Cuts

Cutting New Zealand's 28 percent corporate tax rate is "not a panacea in the way business groups sometimes market it," says Prime Minister Bill English. More>>

ALSO:

Auckland Port To Recapture Gas: Union Calls On Ports To Stop Spewing Methyl Bromide

The Maritime Union of New Zealand welcomes the decision by Ports of Auckland to stop releasing methyl bromide emissions into the air. The move to fully recapture the toxic gas after fumigation sets a new benchmark for industry best practice. More>>

ALSO:

Retail: Banks Shoes Calls In Receiver

Banks Group, which runs 14 stores across the country under the brands including Banks Shoes and Shoe Connection, has been tipped into receivership at the request of director John Bank. More>>

ALSO: