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 newsletter!

Or

Sign up to gain exclusive access to email subscriptions, event invitations, competitions, giveaways, and much more.

Membership is free, and your security and privacy remain protected. View our privacy policy before signing up.

Error: Please check your email address.

Tags ChorusNew Zealand Commerce Commissionunbundled copper low frequency service (UCLFS)unbundled copper local loop (UCLL)final pricing principle (FPP) process

Featured

Slideshows

Leading female front runners of the Kiwi ICT industry honoured at 2019 WIICTA

Leading female front runners of the Kiwi ICT industry honoured at 2019 WIICTA

Reseller News has honoured the leading female front runners of the New Zealand ICT industry at the 2019 Women in ICT Awards (WIICTA) in Auckland. The awards recognised standout individuals across six categories, spanning Entrepreneur, Rising Star, Shining Star, Community, Technical and Achievement. Photos by Gino Demeer.

Leading female front runners of the Kiwi ICT industry honoured at 2019 WIICTA
Reseller News kicks off awards season in 2019 with Judges' Lunch

Reseller News kicks off awards season in 2019 with Judges' Lunch

The 2019 Reseller News Innovation Awards has kicked off with the Judges Lunch in Auckland with 70 judges in the voting panel. The awards will reflect the changing dynamics of the channel, recognising excellence across customer value and innovation - spanning start-ups, partners, distributors and vendors. Photos by Christine Wong.

Reseller News kicks off awards season in 2019 with Judges' Lunch
Reseller News welcomes industry figures for 2019 Hall of Fame lunch

Reseller News welcomes industry figures for 2019 Hall of Fame lunch

Reseller News welcomed 2018 inductees - Chris Simpson, Kendra Ross and Phill Patton - to the third running of the Reseller News Hall of Fame lunch, held at the French Cafe in Auckland. The inductees discussed the changing landscape of the technology industry in New Zealand, while outlining ways to attract a new breed of players to the ecosystem. Photos by Gino Demeer.

Reseller News welcomes industry figures for 2019 Hall of Fame lunch
Show Comments