Chorus committed to UFB rollout
HAMISH RUTHERFORD AND TOM PULLAR-STRECKER
Chorus is "100 per cent committed" to the ultrafast broadband network and walking away is the absolute "last thing" it would look at, chief executive Mark Ratcliffe says.
It has been speculated today that Chorus might be better off pulling out of the contract to build the new communications network, even though it might cost it hundreds of millions in damages.
"We are 100 per cent committed," Ratcliffe said today.
"We haven't missed a beat on delivering to network milestones. We are connecting every customer that wants to be connected as quickly as we possibly can.
"We don't think pulling out is an option."
Chorus might sit down with the Government to renegotiate the terms of the contract, he said.
"But that would need to be a mutually agreed thing.
"As you'd imagine, contracts are not written so one party can just unilaterally walk away."
The future of the industry was in the fibre network.
"Not participating is effectively like deciding in the long term to walk away from the business, because copper's going to fibre, it's just a case of when," Ratcliffe said.
Under some scenarios the company could not deliver the network, meaning that from a value point of view it would be better financially not to be involved.
"That's the last scenario you'd ever look at.
"There comes some points where you'd have to go and say, 'I wanted to do this with you, but I just can't'.
"I don't think we're there, but that's the only way you'd want to exit it [the contract]."
Even under the scenario presented by the Commerce Commission the company could build the UFB network, but "we have a problem at the speed at which we need to build it. That's what it comes down to."
On a short visit to Dunedin today, Prime Minister John Key declined to say what it would take for the government to provide Chorus with additional assistance, or what form the assistance might take, ahead of an independent report by Ernst & Young Australia on how the commission's decision might hurt the company.
"When we get that information then we will be in a position to understand whether Chorus is in a position to complete the contract on time without any input from the Government," Key told Fairfax Media.
"If that is not possible then we'll have to consider what our next steps might be.
"We're not either surprised or alarmed by the moves of the other political parties not to support legislation to overrule the Commerce Commission.
"We'd worked out some time ago that it was extremely unlikely that we'd get parliamentary support for that and had already discounted that we'd have that as an option."
The Australian stock exchange has asked Chorus to explain why its share price fell from A$1.69 last week to an intraday low of A$1.39 today.
Chorus shares have been pounded after it emerged yesterday that the Government would not get support from minor parties to legislate the price of copper broadband and mitigate a price cut ordered by the Commerce Commission. However, the company had not issued any formal releases on the topic.
The ASX wrote Chorus a "please explain" letter this morning with regard to its share price drop.
Chorus responded that it was not aware of any information concerning the company that had not been announced. Chorus had been "the subject of a range of third-party announcements and considerable third-party speculation, particularly concerning the [copper broadband] pricing process," it said.