Final decisions on fibre costs

Chorus unhappy with ComCom UFB final decision

Earlier this week the Commerce Commission released its final decision on Chorus’ financial losses and costs during the fibre rollout. The decision sets out the rules the commission will apply to Chorus’ historic financial losses. The new rules will then be used from January 2022 to determine prices Chorus can charge for wholesale network access.

In a statement to the New Zealand and Australian stock exchanges, Chorus says while there’s an improvement on the draft, the decisions do not reflect commercial reality, the true costs of building the network or the risk involved.

The statement was authorised by chief financial officer David Collins.

Poor signals

It goes on to say: “The final views today, and range of changed views from the Commission during this process, send extremely poor signals to investors in New Zealand’s infrastructure and future public private partnerships. They signal that real commercial risk may be assumed away with hindsight.”

Previously the Commerce Commission considered using a ‘building blocks’ method to value the financial losses. This has now changed to a discounted cash flow approach.

Telecommunications commissioner Tristan Gilbertson says: “Submitters, including fibre companies and financial analysts, recognised this would help make the calculations easier to understand and therefore provide greater transparency when we set Chorus’ price-quality path and the broader information disclosure regulations next year”.

He says the commission has put safeguards in place to address the risk of windfall gains or of over-recovery.

Flip reborn as affordable broadband brand

Vocus has rebooted the Flip ISP brand as a low-cost fibre broadband option. The brand’s chief executive Taryn Hamilton says to keep things simple and minimise operational costs, flip offers a single $15 a week plan. Customers get an unlimited 50mbps connection in Chorus areas or 30mbps in other fibre areas. There are no contracts but there is a $30 set-up fee. Customers can opt to pay weekly or fortnightly.

Hyperfibre goes nationwide

Chorus can now offer customers Hyperfibre anywhere on the UFB1 fibre network. Previously the multi-gigabit speed service had been available in a number of regions.

Hyperfibre is the fastest consumer broadband available in New Zealand and is equal to anything anywhere in the world.

At present there are two options: 2 gigabits per second and 4 Gbps. Both are symmetrical. That is custoemrs can upload and download at the reported speeds. Chorus plans to add an 8Gbps option at a later date.

Customers can expect to pay around $200 a month for a 4 Gbps Hyperfibre service.

Clark takes comms ministry

Former health minister David Clark is to take over the communications minister role. The portfolio was previously combined with broadcasting, that stays with Kris Faafoi. Clark will also have responsibility for the digital economy. Clark is a Dunedin MP. He stepped down from the health role after a series of missteps during the lockdown earlier this year.

IDC says telco market ripe for disruption

IDC’s 2020 Telecommunications Market Report says the market decreased 2.4 percent in the year to June. It says the Covid pandemic has killed roaming revenue and hurt prepay and handset sales. IDC forecasts a slow recovery between now and 2024.

The report says the changes in the last year have set the scene for a disruptive market play. Possible areas to watch are the new 5G mobile networks and the arrival of Sky as a broadband service provider.

TGA opens Hamilton-Sydney fast track

Tasman Global Access, the New Zealand-Australia submarine cable owned by Spark, Vodafone and Telstra has added a Hamilton access point. This gives the Waikato city its first direct link to Sydney. It also brings cross-Tasman data capacity up to 2.4 Tbps.