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

 

China Shopping: NZ-China FTA Upgrade Agreed Among Slew Of New Deals

New Zealand Prime Minister Bill English and China Premier Li Keqiang signed off a series of cooperation deals spanning trade, customs, travel and climate change and confirmed commencement of official talks on an upgrade to the nine-year old free-trade agreement between the two countries. More>>

ALSO:


Media: TVNZ Flags Job Cuts To Arrest Profit Decline

Chief executive Kevin Kenrick said the changes were aimed at creating "a sustainable future video content business for TVNZ in an ever-changing media market." More>>

ALSO:

Reserve Bank: Wheeler Keeps OCR At 1.75%

Reserve Bank governor Graeme Wheeler kept the official cash rate unchanged at 1.75 percent, as expected, and reiterated his view that the benchmark rate doesn't need shifting for the foreseeable future. More>>

ALSO:

Trade Plans: Prime Minister's Speech To International Business Forum

"The work to improve public services, build infrastructure, and solve social problems is possible only because we have enjoyed sustained, solid economic growth. A big reason for that is the Government’s consistent agenda of economic reform, and our determination to open up more opportunities for trade with the world." More>>

ALSO:

Get More From Scoop

 
 
 
 
 
 
 
 
Business
Search Scoop  
 
 
Powered by Vodafone
NZ independent news