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- Release Date: 24/04/14 11:11
- Summary: GENERAL: CNU: Final decision on benchmarked UCLFS connection charges
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CNU
24/04/2014 09:11
GENERAL
REL: 0911 HRS Chorus Limited (NS)
GENERAL: CNU: Final decision on benchmarked UCLFS connection charges
STOCK EXCHANGE ANNOUNCEMENT
24 April 2014
Final decision on benchmarked UCLFS connection charges
The Commerce Commission (Commission) has determined that unbundled copper low
frequency service (UCLFS) 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 3 December 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. 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.
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. Chorus proposed that the Commission consider the review of the
UCLFS connection charges with the benefit of cost modelling analysis. In a
situation where the final pricing reviews change benchmarked connection
charges again, consideration of backdating remains relevant - today's
outcomes have the potential to be reversed.
The effect of the Commission's decision is that any changes to the
benchmarked UCLL prices as a consequence of the UCLL FPP process will
automatically flow through to the UCLFS prices.
A copy of the Commission's decision is attached.
ENDS
For further information:
Ian Bonnar
Corporate Affairs Manager
Mobile: +64 (27) 215 7564
Email: [email protected]
Brett Jackson
Investor Relations Manager
Mobile: +64 (27) 488 7808
Email: [email protected]
End CA:00249749 For:CNU Type:GENERAL Time:2014-04-24 09:11:12
