Menu
Commerce Commission decision to cost Chorus more than $10 million

Commerce Commission decision to cost Chorus more than $10 million

UCLFS connection charges could be reset so that they are the same as benchmarked unbundled copper local loop

A Commerce Commission decision is set to cost Chorus upwards of $10 million, pushing its earnings into decline.

The Commerce Commission (Commission) has determined that unbundled copper low frequency service (UCLFS) connection charges should be re-set so that they are the same as benchmarked unbundled copper local loop (UCLL) that were set in a determination made on December, 3, 2012.

This means that the UCLFS connection charges will change to align to the benchmarked UCLL connection charges.

Chorus estimates that this decision would have an annualised EBITDA impact of around $6 million.

"The Commission also requires that the new UCLFS connection charges be backdated to 3 December 2012, including interest," it said.

"The net effect of backdating and interest charges is estimated to reduce Chorus' FY14 EBITDA by an indicative $9-$10 million.

"Chorus' FY14 EBITDA guidance range is unchanged but the consequence of today’s decision is that Chorus now expects to track to the middle of the range of flat to low single digit percentage decline in EBITDA, relative to underlying FY13 EBITDA of $654 million."

RSPs currently pay UCLFS connection charges to connect end users to Chorus’ UCLFS, in addition to ongoing monthly rentals for accessing these services.

According to a company statement, Chorus’ view is that connection charges for UCLL are part of the UCLL final pricing principle (FPP) process that is due to be completed by 1 December 2014.

"Those processes use a cost modelling rather than a benchmarking approach," it said

"Chorus proposed that the Commission consider the review of the UCLFS connection charges with the benefit of cost modelling analysis."

Follow Us

Join the New Zealand Reseller News newsletter!

Error: Please check your email address.

Tags unbundled copper low frequency service (UCLFS)Chorusunbundled copper local loop (UCLL)New Zealand Commerce Commissionfinal pricing principle (FPP) process

Slideshows

Top 50 defining moments of the New Zealand channel in 2016

Top 50 defining moments of the New Zealand channel in 2016

Reseller News looks back on a tumultuous 12 months for the New Zealand channel, assessing the fallout from a year of sizeable industry change. Whether it be local or global mergers and acquisitions, distribution deals or job changes, the channel that started the year differs somewhat to the one set to finish it - Reseller News assesses the key moments that made 2016.​

Top 50 defining moments of the New Zealand channel in 2016
​Hewlett Packard Enterprise honours high achieving NZ channel

​Hewlett Packard Enterprise honours high achieving NZ channel

Hewlett Packard Enterprise honoured its top performing Kiwi partners at the second running of its HPE Partner Awards in New Zealand, held at a glitzy ceremony in Auckland. Recognising excellence across eight categories - from distributors to resellers - the tech giant celebrated its first year as a standalone company, following its official split from HP in 2015.

​Hewlett Packard Enterprise honours high achieving NZ channel
Nutanix treats channel partners to Christmas cruise

Nutanix treats channel partners to Christmas cruise

Nutanix recently took to the seas for a Christmas Cruise around Sydney Harbour with its Australia and New Zealand staff, customers and partners to celebrate a stellar year for the vendor. With the sun out, they were all smiles and mingled over drinks and food.

Nutanix treats channel partners to Christmas cruise
Show Comments