UFB connection costs as low as they'll go says Chorus

Chorus says the average cost of getting fibre from the street to the premise will work out at about $1100.
CHORUS

Chorus says the average cost of getting fibre from the street to the premise will work out at about $1100.

Internet users who are worried that getting connected to ultrafastfast broadband will prove a nightmare may be able to relax a little.

Chorus has given up trying to cut the cost of connecting homes to the ultrafast broadband (UFB) network and will instead aim to contain costs at their current level until 2020.

The decision not to try and seek further cost savings from contractors was welcomed by the Telecommunications Users Association (Tuanz).

It believed it might be positive for the vast majority of consumers who have yet to connect to the fibre-optic network.

"Given the stories this year about the quality of the installs, I think it is reasonably good news they are not going to try to squeeze more out of them than they have to date," Tuanz chief executive Craig Young said. 

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"Hopefully that means the service companies will be able to ensure the quality." 

Chorus has admitted there have been instances of shoddy work connecting homes. 

Spokesman Nathan Beaumont said Chorus connected about 600 premises to the UFB network every day and on a typical day it received about 10 "queries" about the quality of the job done.

It wanted to reduce that to about two queries per day, he said. 

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If Chorus succeeds in capping connection costs at their current level, the average cost of connecting customers to fibre in the street will average out at about $1100, which is at the top end of Chorus' original forecasts.

That appeared to disappoint investors in the company. Chorus' share price fell 3.4 per cent to $3.72 in the wake of the announcement.

Chorus is paying to wire up homes to UFB, but spokesman Beaumont said it had "yet to be determined" where that cost would fall once its current contract with the Crown ends in 2020.

The issue was likely to be addressed by reforms, now under way, of the Telecommunications Act, he said.

"Install costs could be factored into the price we can charge [internet providers] or there could be a different mechanism to cover it," he said.

Young did not believe that would be acceptable if it meant putting up Chorus' charges.

"They are already incurring that cost within their cost structures, so why would they need to recover it from anywhere else?"

"It would be in Chorus' interest to continue to encourage people to get off the copper network," he said.

Australian contractor Downer decided in August to stop doing UFB installs for Chorus because the work was was not sufficiently profitable and Chorus has announced rival Australian contractor Visionstream will take over its work.

 - Stuff

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