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

 


UPDATE Chorus shares slip after ‘pragmatic’ deal with CFH

UPDATE Chorus shares slip after ‘pragmatic’ deal with Crown Fibre Holdings

(Adds investor comment, minister comment, share price throughout)

By Paul McBeth

March 11 (BusinessDesk) - Shares in Chorus slipped after the telecommunications network operator said it reached an initial deal with Crown Fibre Holdings to manage cash flow and provide more certainty for the ultrafast broadband roll-out.

The telecommunications infrastructure company has been given greater flexibility in building the network, provided it meets agreed deadlines to complete the national fibre roll-out, and Crown Fibre Holdings will more closely align its existing funding with completed work as long as certain conditions are met, Chorus said in a statement.

“Sensible and pragmatic is probably the best way to sum it up,” said Matt Goodson, managing director at Salt Funds Management. “It introduces some important flexibility for Chorus in terms of where it rolls out fibre and when.”

The shares declined 0.6 percent to $1.55 and have gained 8.3 percent this year after being punished by investors last year over the regulatory risk.

Salt Funds’ Goodson said investors still have some questions about the detail of the new arrangements, but that if Chorus can get through the next two years building the network, things will get easier.

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 up to $900 for the reticulation of lines in greenfield UFB areas.

Chorus chief financial officer Andrew Carroll said it was too early to put a dollar value on the agreed changes, but that this initial set of initiatives will help the company deliver UFB faster, smoother and cheaper.

“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” created by last year’s Commerce Commission decisions that slashed the price of unbundled bit access, an element of the current copper wire network, further than Chorus had expected.

Communications Minister Amy Adams welcomed the first tranche of agreements, saying the changes are within the government’s $1.35 billion fiscal envelope to support the fibre network.

“The overall timeframe for the roll out, the start and completion dates for each candidate area, the coverage area, and the completion date for priority users are all unchanged,” she said in a statement. “I am advised that talks between Crown Fibre Holdings and Chorus are on-going in respect to possible further adjustments to the companies’ contract.”

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.

(BusinessDesk)


© Scoop Media

 
 
 
 
 
Business Headlines | Sci-Tech Headlines

 

Cosmetics & Pollution: Proposal To Ban Microbeads

Cosmetic products containing microbeads will be banned under a proposal announced by the Minister for the Environment today. Marine scientists have been advocating for a ban on the microplastics, which have been found to quickly enter waterways and harm marine life. More>>

ALSO:

NIWA: 2016 New Zealand’s Warmest Year On Record

Annual temperatures were above average (0.51°C to 1.20°C above the annual average) throughout the country, with very few locations observing near average temperatures (within 0.5°C of the annual average) or lower. The year 2016 was the warmest on record for New Zealand, based on NIWA’s seven-station series which begins in 1909. More>>

ALSO:

Farewell 2016: NZ Economy Flies Through 2016's Political Curveballs

Dec. 23 (BusinessDesk) - New Zealand's economy batted away some curly political curveballs of 2016 to end the year on a high note, with its twin planks of a booming construction sector and rampant tourism soon to be joined by a resurgent dairy industry. More>>

ALSO:


NZ Economy: More Growth Than Expected In 3rd Qtr

Dec. 22 (BusinessDesk) - New Zealand's economy grew at a faster pace than expected in the September quarter as a booming construction sector continued to underpin activity, spilling over into related building services, and was bolstered by tourism and transport ... More>>

  • NZ Govt - Solid growth for NZ despite fragile world economy
  • NZ Council of Trade Unions - Government needs to ensure economy raises living standards
  • KiwiRail Goes Deisel: Cans electric trains on partially electrified North Island trunkline

    Dec. 21 (BusinessDesk) – KiwiRail, the state-owned rail and freight operator, said a small fleet of electric trains on New Zealand’s North Island would be phased out over the next two years and replaced with diesel locomotives. More>>

  • KiwiRail - KiwiRail announces fleet decision on North Island line
  • Greens - Ditching electric trains massive step backwards
  • Labour - Bill English turns ‘Think Big’ into ‘Think Backwards’
  • First Union - Train drivers condemn KiwiRail’s return to “dirty diesel”
  • NZ First - KiwiRail Going Backwards for Xmas
  • NIWA: The Year's Top Science Findings

    Since 1972 NIWA has operated a Clean Air Monitoring Station at Baring Head, near Wellington... In June, Baring Head’s carbon dioxide readings officially passed 400 parts per million (ppm), a level last reached more than three million years ago. More>>

    ALSO:

    Get More From Scoop

     
     
     
     
     
     
     
     
    Business
    Search Scoop  
     
     
    Powered by Vodafone
    NZ independent news