Funding shortfall threatens Gigatown campaign

Last updated 05:00 12/12/2013

Relevant offers


Porirua cbd gets two fibre networks and high-speed wi-fi Former casino magnate and vineyard owner sued for $3.5 million Architecturally-designed Wellington central building up for sale How Toyota used Nascar to sway loyal US car buyers Health drink SOS Hydration seeks to raise $2.3m in crowdfunding campaign VW announces cleaning solution for dirty diesels AFT Pharmaceuticals to list on NZX and ASX in December Brokers view: Positivity may be returning for Kathmandu Successful New Zealanders celebrated at Moet event Animal activists protest as Craddock Farms appeal begins

Chorus could can its "Gigatown" competition under which it has been planning to offer gigabit broadband to one New Zealand city or town, as it seeks to clamp down on non-essential spending.

Chief executive Mark Ratcliffe said the competition had proved very popular and had created excitement about ultrafast broadband, "but everything has to be looked at as we are ‘managing for cash' ".

"We have got a massive funding shortfall and you have to look at absolutely everything. Nothing is sacred, though taking your flagship marketing campaign off air shortly after putting it on air would not be desirable at all.

"There can't be sacred cows, however much we might personally be attached to things."

Chorus chairman Sue Sheldon said this week that the company would probably "cut all discretionary activity", including growth-related capital investment, and re-price most of its commercial services.

Chorus' share price has plummeted since the Government admitted last month that it did not have the numbers in Parliament to override a Commerce Commission-ordered $10.54 cut in the price it will be allowed to charge for access to its copper network from next December.

Sheldon said Chorus's board believed a "full-price principle" review the company had demanded the commission undertake could see the price go back up to "around or even above current levels". But in the meantime it could not finalise its medium-term strategy and was assessing its "capital management options".

Ad Feedback

- BusinessDay

Special offers

Featured Promotions

Sponsored Content