Chorus welcomes faster telco review

TOM PULLAR-STRECKER
Last updated 12:56 08/02/2013

Related Links

Easy to take a simplistic view of telco review

Relevant offers

Industries

Edge of Lake Te Anau included in Govt tenders for oil and gas block exploration Pumpkin Patch sells to Australian company Catch Group Chart of the day: What sorts of dwellings are being built in Northland? Protesters had the better of day one at New Zealand Petroleum Conference 2017 NZ Post prices to rise due to falling mail volumes TVNZ newsroom staff await word on cuts If Fletcher Building is struggling, others will be too Sky TV and Vodafone file High Court papers challenging merger ruling Construction industry needs 30,000 workers by 2019: Civil Contractors NZ Australian buyer eyes up Pumpkin Patch name and customers

Chorus has welcomed a decision by the Government to bring forward a comprehensive review of telecommunications regulation.

Its shares were up more than 10 per cent in lunchtime trading after Communications Minister Amy Adams bowed to pressure from the company.

The review sidelines a Commerce Commission draft determination that would have slashed the price Chorus could charge for the use of its copper-based broadband network.

Chorus chief executive Mark Ratcliffe said the decision to immediately kick off the regulatory review was a "principled" positive step.

"We're looking forward to transparently engaging with the industry to help shape a new environment where everyone - government, infrastructure companies, and retail service providers - are incentivised to work to a shared vision where ultimately New Zealanders are the winners."

The Government amended the Telecommunications Act in 2011 as part of its preparations for its $1.35 billion investment in ultrafast broadband, saying then that it would commence "a general review of the policy framework for regulating telecommunications services in New Zealand" by September 2016 with the goal of completing the review by March 2019.

But Adams today announced the review, and another that will look at the Telecommunications Service Obligation that limits fixed-line rentals and guarantees unmetered local calling, would now start "immediately".

Former Communications Minister Steven Joyce had indicated copper-based broadband would act as a competitive check on the price telecommunications retailers would be able to charge for fibre-based ultrafast broadband.

But Adams signalled the review would result in a more fibre-friendly regulatory regime.

"Throughout the establishment of the Government's UFB and RBI [rural broadband] initiatives, user groups were clear in their calls for the need for fibre connectivity as a priority. The Government is committed to world-class fibre infrastructure, and the long-term gains it will bring," she said.

"Increased certainty around the transition path from copper to fibre will promote development of retail fibre products, boosting the ability of New Zealand homes, businesses, schools and hospitals to maximise the transformative potential of these technologies.

"The policy framework needs to be predictable and stable for all concerned, and in my view, it is therefore desirable that these two reviews get underway immediately."

The battle over telco regulation came to a head after the Commerce Commission issued a draft determination in November that recommended cutting the price Chorus should be allowed to charge for wholesale copper broadband connections by $12.53 a month to $8.93 from December 2014.

Ad Feedback

Chorus estimated the price cut would slash up to $160 million off its annual earnings before interest, tax, depreciation and amortisation and said it would inhibit the take-up of ultrafast broadband by making existing copper services cheaper in comparison.

Chorus shares were up 32 cents at $3.18 during lunchtime trading.

- BusinessDay.co.nz

Comments

Special offers

Featured Promotions

Sponsored Content