CNU
02/12/2014 09:34
GENERAL
PRICE SENSITIVE
REL: 0934 HRS Chorus Limited (NS)
GENERAL: CNU: Chorus releases update of its FPP modelling data
2 December 2014
STOCK EXCHANGE ANNOUNCEMENT
Chorus releases update of its FPP modelling data
Chorus has today provided an update on its work with world leading experts
Analysys Mason to develop economic models that can be used to inform the
Commerce Commission's Final Pricing Principle (FPP) processes.
This information updates the market on the previous presentation given on 7
October 2014.
Analysys Mason is a global telecommunications consultancy, and has assisted
regulators in undertaking similar work for networks in Australia, Norway,
Denmark, France and the Netherlands.
The modelling from Analysys Mason was submitted by Chorus to the Commerce
Commission on 1 December 2014, in line with the Commission's published
timetable.
"While the FPP exercise is a hypothetical exercise of considering the cost of
a network provider replacing Chorus and building a network today, we have
real world data about building a network today," said Mark Ratcliffe, CEO
Chorus.
Chorus has drawn upon extensive data from its work over the last three years
to deploy the UFB fibre network to about 400,000 urban end-users across 24
centres nationwide and connect more than 40,000 end-users.
This data has been complemented by Chorus' experience deploying more than
3,000 kilometres of fibre to bring better broadband to more than 75,000 rural
end-users for the Rural Broadband Initiative.
"The nature of our business means that Chorus is well placed to provide real
world, credible, New Zealand-based cost information and we believe it is
valuable to provide this data into the FPP process.
"We have consistently said that once the NZ reality has been taken into
account, that we do not expect the FPP to result in prices lower than the
pre-benchmarking level of around $45, and we are providing our own model to
the Commission as evidence to support this."
"We also note that in the real world market, pricing would of course be
constrained by market realities including the need for Chorus to compete with
other access networks and technologies.
Chorus has made, and continues to make, extensive submissions on ongoing
consultation documents from the Commission which can be found on the
Commission's website.
A presentation summarising Chorus' models is attached as an update to the 7
October 2014 presentation.
At the Commerce Commission's request, Analysys Mason will provide a briefing
at 10am on Thursday 4 December on its total service long run incremental cost
(TSLRIC) UCLL and UBA models. The briefing will be webcast at
www.chorus.co.nz/webcast.
ENDS
For further information:
Ian Bonnar
Corporate Affairs Manager
Mobile: +64 (27) 215 7564
Email: [email protected]
Brett Jackson
Investor Relations Manager
Phone: +64 4 896 4039
Mobile: +64 (27) 488 7808
Email: [email protected]
End CA:00258389 For:CNU Type:GENERAL Time:2014-12-02 09:34:56
