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

 

Finance: Major Campaign To End "Gross Overtaxation Of Savings"

The campaign – which includes a special web site through which New Zealanders can e-mail their own and other MPs and party leaders – is backed by Age Concern, Consumer NZ, the Financial Services Council and the Taxpayers’ Union. More>>

ALSO:

Scoop Business: Leighton-Led WGP To Build, Manage Transmission Gully

The Wellington Gateway Partnership, led by a unit of ASX-listed Leighton Holdings, has won the $1 billion contract to build the Transmission Gully road north of Wellington. More>>

ALSO:

Gareth Morgan: The Government’s Fresh Water Policy – Revisited

Fresh water quality is the latest area to be in the sights of Gareth Morgan and his research organisation The Morgan Foundation... They found that the fresh water policy was a bit murkier than the Environment Minister let on. More>>

ALSO:

Interest Rates: RBNZ Hikes OCR To 3.5%, ‘Period Of Assessment’ Now Needed

Reserve Bank governor Graeme Wheeler raised the official cash rate as expected, while signalling a pause in rate hikes to assess the impact of moves so far this year. The kiwi dollar sank after Wheeler said its strength was “unjustified” and that the currency could have “a significant fall.” More>>

ALSO:

Fonterra: Canpac Site 'Resize' To Focus More On Paediatrics

Fonterra is looking at realigning its packing operations at Canpac, in the Waikato, to focus more on paediatric nutritionals... The proposed changes could mean around 110 roles may not be required at the site which currently employs 330. More>>

ALSO:

Scoop Business: Postie Plus Brand Gets 2nd Chance With Well-Funded Pepkor

The Postie Plus brand is getting a new lease of life after South Africa’s Pepkor bought the failed retailer’s assets out of administration and said it will use its purchasing power to reduce costs of stock and fatten margins. More>>

ALSO:

Get More From Scoop

 
 
Computer Power Plus

Standards New Zealand

Standards New Zealand
 
 
 
 
 
 
 
 
Business
Search Scoop  
 
 
Powered by Vodafone
NZ independent news