Pricing delay hits Chorus shares

Chorus shareholders took another hit on their investment yesterday when the Commerce Commission said it was delaying the final pricing principle (FPP) review for access to the company's copper wire network.

The commission no longer aimed to complete the FPP reviews by November 30 and instead was aiming for a draft decision on both prices by December 1 and a final decision by April 1 next year.

Chorus shares dropped 6c to $1.68 after the decision was announced and closed at $1.71.

Chorus general counsel Vanessa Oakley said the unbundled bitstream access (UBA) price determined by benchmarking two European countries would now take effect before the commission completed its price reviews using cost modelling.

''Uncertainty increases for everyone today.

''While we acknowledge the FPP processes are challenging, we are very disappointed the timetable aims announced by the commission in February have now been changed.

''We agreed with the commission's statements in March that prompt completion of those processes provided the best certainty for everyone.''

Chorus also believed the appropriate levels of consultation could be undertaken within the original time frame, she said.

However, Labour Party ICT spokeswoman Clare Curran said the delay in the final copper price was sensible.

Getting the copper price settings right for New Zealand consumers, and for the long-term good of the broadband industry, was one of the most critical tasks the commission faced this year, she said.

Labour supported the regulator's process and its willingness to seek further industry input along the way, she said.

Telco retailers had expressed concerns about their ability to engage effectively with the technical complexities of the final copper pricing if consultation was confined to the period after a draft determination.

The commission's annual telecommunications monitoring report

analysing the state of New Zealand's telecommunications markets showed telecommunications services were delivering more to consumers for less cost.

Spending on telecommunications services were about the same in real terms as it was 10 years ago, but consumers were getting far more for their money in terms of data, texts and calling minutes, particularly in the mobile market.

 

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