Chorus warns Australia on structural separation

Chorus manager of marketing strategy and insight Rosalie Nelson warned Australia’s telecommunications industry on the risks of New Zealand-style full structural separation. She was speaking at the CommsDay Melbourne Congress and reported in Communications Day.

Nelson’s comments come as Optus chairman Paul O’Sullivan calls for Telstra to split along similar lines to Telecom NZ (now Spark) and Chorus.

When Chorus demerged from Telecom NZ, it inherited the copper network, a considerable share of the former company’s debt and almost all the regulatory obligations.

Nelson says the Commerce Commission ruling on the price Chorus can charge telcos and ISPs to use the copper has hurt its ability to pay for the fibre network.

While the arguments are well-known, what isn’t widely understood is how dependent Chorus is on revenue from the copper network and how it doesn’t get to set the prices for copper services.

She says that for every dollar the government puts into the UFB build, Chorus puts in two. For every dollar Chorus earns it needs 60 cents of capital expenditure.

Nelson says the assumption telecommunications is like other utilities needs questioning because it is subject to rapid change. That leads to uncertainty — yet investors are usually drawn to utilities because of their stability and relative certainty.

She warns Australian telcos to make sure all their funding sources are secure before taking part in an industry restructure.

Fast growing Xero passes 200,000 milestone

Xerocon 2013

Xerocon 2013

New Zealand accounting software champion Xero says it now has  200,000 paying customers. The number has doubled in the past 13 months and the company has grown 400 percent in a little under two years.

The milestone was announced, appropriately, at the Xerocon conference in Sydney, Australia. Much of the recent growth in the company’s sales has come from Australia with a total of 75,000 customers in that country up from 51,000 in March. Xero now has 90 staff in Australia.

This week’s Xerocon event emphasises the company’s rapid growth. It is being attended by more than 800 people and there are 53 exhibitors.

Australian Managing Director Chris Ridd says he anticipates even greater growth across the Tasman with the company’s first advertising campaign about to begin.