Chorus will struggle to meet its fibre network contractual obligations is regulated cuts to copper access prices go ahead according to Ernst & Young Australia.
Ernst & Young Australia reported its preliminary findings to Communications Minister Amy Adams and told her the proposed regulated price cut will have a ‘significant impact’ on the company’s finances.
The next step will see Chorus dragged in for discussions with Crown Fibre Holdings. Crown Fibre Holdings is the government organisation overseeing the Ultra-Fast Broadband project.
This may yet see some renegotiation. However, a statement from Adams’ office underlines that the government expects Chorus to make a ‘significant part’ of any shortfall.
Earlier this week, Prime Minister John Key ruled out putting more government money into the UFB project. He also said the project will not be slowed down.
Those comments came after the minor parties revolted against a government move to legislate changes to the telecommunications laws. The changes could have seen the Commerce Commission’s decision on copper access prices over-ruled.