Chorus repeats payment warning
Chorus has given further stark warnings that the size of future payouts to shareholders remains up in the air while the Commerce Commission reviews how much it should be able to charge for its copper landlines.
The company's annual report, published today, said Chorus was "hitting its stride" building its 70 per cent share of the ultrafast broadband network.
But it said Chorus faced "significant uncertainty" over the price it could charge for unbundled phone lines from its exchanges and roadside cabinets "and the copper pricing framework generally".
The Commerce Commission is due to complete a review of copper local loop pricing in November.
The regulator initiated the review after the Government ordered it set a uniform national rate for unbundled phone lines, instead of having separate pricing for urban and rural lines.
The commission suggested in a draft report that it might cut the average price Chorus could charge by $5 a month. That could have a knock-on effect on the price Chorus is allowed to charge for other copper-based services, for which the local loop price is a key component.
"Given the current regulatory uncertainty, Chorus is unable to provide longer term dividend guidance," Chorus' annual report said. If it wasn't for the review, shareholders could have looked forward to "modest long term" growth from a starting annual dividend of 25 cents, it said.
Chorus already has more than 10,000 customers - mostly businesses - connected to fibre-optic cable and is laying an additional 20,000 kilometres of fibre under the ultrafast and rural broadband initiatives, but the vast bulk of its revenues still come from copper-based products.
The headcount of the Wellington-based company mushroomed from 275 at the time it was spun off from Telecom in November last year to 548 at the end of June. A further 100 staff currently employed by Telecom providing billing and other administrative services to Chorus will transition across to the company this financial year, the report said.
The physical work involved in building its fibre networks and maintaining its copper network is largely contracted out.
The report revealed chief executive Mark Ratcliffe was paid $1.1 million for the seven month period to the end of June. His total package, including bonuses and long term incentives, could be up to $2.4m this financial year. About half Chorus' staff are on annualised pay rates of more than $100,000.
Chorus' annual meeting will be held in Wellington on October 31. It shares were trading down 2 cents at $3.33 during lunchtime trading.
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