Ann: GENERAL: CNU: Chorus adds UFB service company agreements

• Release Date: 23/12/14 12:56
• Summary: GENERAL: CNU: Chorus adds UFB service company agreements
• Price Sensitive: No
• Download Document  3.51KB

					CNU
23/12/2014 12:56
GENERAL
NOT PRICE SENSITIVE
REL: 1256 HRS Chorus Limited (NS)

GENERAL: CNU: Chorus adds UFB service company agreements

Chorus announced today that it has entered into two further service company
agreements for the cost of connections to its ultra-fast broadband network.

The new agreements are with Downer and Transfield Services for fibre network
connections to single dwelling unit premises in Chorus' lower North Island
and South Island UFB areas. Under the agreements, the service companies will
provide network connections at fixed prices, with those prices varying
according to agreed deployment types.

Chorus GM Infrastructure Ed Beattie said the agreements were the result of a
national tender process.

"The new agreements mean that each service company will continue to operate
in the same areas and provide Chorus with greater certainty on its connection
cost targets," he said.

The agreements provide for connection costs (excluding layer 2) ranging from
approximately $900 for the most common connection methods, such as re-use of
existing duct and aerial, through to approximately $1,700 for the relatively
limited instances where civil work may be required. The average cost to
connect in any one year will depend on the volume and types of connections
within these agreed rates.

As with the contract agreed with Visionstream in November, the fixed rates
under the Downer and Transfield Services agreements will also apply to
non-standard single dwelling unit connections, with this simplified approach
enabling some reduction in associated non-standard install costs.

Chorus' recently updated FY15 connections cost guidance of $1,150 to $1,350
(excluding layer 2 and including standard installations and some non-standard
single dwelling unit installations) reflected a proportion of costs already
incurred prior to the new agreements. Today's agreements do not change this
guidance.

On an annualised basis, the new agreements imply an average cost to connect
(excluding layer 2 and including standard installations and some non-standard
single dwelling unit installations) approximately 10 to 20% lower than the
current FY15 guidance range, assuming the same mix of connection types.

Chorus' total programme view for the average cost to connect standard
residential premises (including layer 2) remains $900 to $1,100 in 2011
dollars, or approximately $1,000 to $1,200 in FY14 dollars.

Transfield Service's agreed pricing will apply from February 2015 and
Downer's from March 2015. Both agreements are until 31 January 2017, with the
ability to extend to the end of 2019 subject to pricing and performance.

Fixed cost agreement with Visionstream
Chorus has also agreed a new fixed price UFB deployment contract with
Visionstream for the Auckland UFB area. The contract replaces the targeted
cost regime previously agreed in April 2013 and provides Chorus with
additional certainty on deployment costs through the remainder of the UFB
deployment period.

Chorus expects to provide an update on the $1.7 to $1.9 billion guidance
range for UFB communal costs once discussions with parties regarding new
contractual agreements in other Chorus UFB areas are concluded and other
factors relevant to build costs, such as aerial access, are finalised.

ENDS

For further information:

Nathan Beaumont
Media and PR Manager
Mobile: +64 (21) 243 8412
Email: [email protected]

Brett Jackson
Investor Relations Manager
Mobile: +64 (27) 488 7808
Email: [email protected]
End CA:00259328 For:CNU    Type:GENERAL    Time:2014-12-23 12:56:11