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

 


CORRECT: Chorus faces up to $10 mln earnings hit in 2014

CORRECT: Chorus faces up to $10 mln earnings hit in 2014 from latest regulator pricing decision

(Corrects direction of price movement in first paragraph)

By Paul McBeth

April 24 (BusinessDesk) – Chorus, the telecommunications network operator, expects 2014 earnings will be as much as $10 million lower after the Commerce Commission pressed ahead with a decision to lower the price of another component on the company’s copper lines, and backdate the charge.

The Wellington-based company expects earnings before interest, tax, depreciation and amortisation will be $9 million to $10 million lower in the 12 months ending June 30, as a result of the regulator’s decision to align the price for Chorus’s unbundled copper low frequency services (UCLFS) with the benchmarked unbundled copper local loop (UCLL), backdated to Dec. 3, 2012. The backdating means Chorus will have to pay back its over-charged customers with interest.

After 2014, the company expects Ebitda to be about $6 million lower in the subsequent years, in line with its December guidance on the potential regulation.

Chorus said it now expects 2014 Ebitda to be between unchanged and 9 percent lower than last year’s $654 million.

UCLFS lets telecommunications companies provide voice services using the low frequency band on the copper local loop network. UCLL lets telecommunications companies use the copper network between an exchange and an end-customer’s premises to offer their own voice and broadband services.

The Telecommunications Act requires the UCLFS price to be the same as the UCLL price.

The commission set the UCLFS charges in November 2011, the month Chorus was officially carved out of Telecom, saying at the time it would update the connection and transfer charges for the service once the UCLL pricing review was complete.

In the UCLL determination in 2012, the regulator affirmed its view that a single price for the services was appropriate.

The UCLFS component of the copper lines is a small part of Chorus’s ongoing dispute with the regulator as to what it can charge for its services. Chorus has warned the regulation of its unbundled bitstream access services, which lets internet retailers to use Chorus’s components on the copper lines without having to replicate them, could cut Ebitda by up to $142 million.

Shares in Chorus were unchanged at $1.78, and have gained 24 percent this year after being punished in 2013 during the height of the regulatory uncertainty.

(BusinessDesk)

© Scoop Media

 
 
 
 
 
Business Headlines | Sci-Tech Headlines

 

Petrol Burns Prices: Second Consecutive Quarterly Fall For CPI

The consumers price index (CPI) fell 0.3 percent in the March 2015 quarter, following a 0.2 percent fall in the December 2014 quarter, Statistics New Zealand said today. The last time the CPI showed two consecutive quarterly falls was in the December 1998 and March 1999 quarters. More>>

ALSO:

Scoop Business: NZ Broadcasters Launch Battle Against Global Mode ISPs

New Zealand broadcasters have confirmed they’ve launched legal proceedings against internet service providers who give customers’ access to “global mode”, which allows customers access to offshore online content, claiming it breaches the local content providers’ copyright. More>>

ALSO:

Sanford: Closure Of Christchurch Mussel Processing Plant Confirmed

The decision comes after a period of consultation with the 232 staff employed at the Riccarton site, who were told on 9 April that Sanford was considering the future of mussel processing in Christchurch. Recent weather patterns had impacted on natural spat (offspring) supply... More>>

ALSO:

Price Of Cheese: Dairy Product Prices Fall To The Lowest This Year

Dairy product prices fell in the latest GlobalDairyTrade auction, hitting the lowest level in the 2015 auctions so far, as prices for milk powder and butter slid amid concern about the outlook for commodities. More>>

ALSO:

Houston, We Have An Air Route: Air New Zealand To Fly Direct To The Heart Of Texas

Air New Zealand will fly its completely refitted Boeing 777-200 aircraft between Auckland and Houston up to five times a week opening up the state of Texas as well as popular nearby tourist states such as Louisiana and Florida. More>>

ALSO:

Scoop Business: Reserve Bank’s Spencer Calls On Govt To Rethink Housing Tax

The Reserve Bank has urged the government to take another look at a capital gains tax on investment in housing, allow increased high-density development and cut red tape for planning consents to address an over-heated Auckland property market. More>>

ALSO:

Get More From Scoop

 
 
 
 
 
 
 
 
 
Business
Search Scoop  
 
 
Powered by Vodafone
NZ independent news