CNU
02/12/2014 09:01
GENERAL
PRICE SENSITIVE
REL: 0901 HRS Chorus Limited (NS)
GENERAL: CNU: Commerce Commission releases draft FPP prices
2 December 2014
STOCK EXCHANGE ANNOUNCEMENT
Commerce Commission releases draft FPP prices
The Commerce Commission has today released its draft Final Pricing Principle
(FPP) determinations which propose an aggregate price of $38.39, compared to
the aggregate $34.44 price that was previously derived from the Commission's
Initial Pricing Principle (IPP) benchmarking review.
The draft FPP individual product prices are:
- A draft UCLL price of $28.22; compared to $23.52 currently;
- A draft SLU price of $14.45; compared to $14.21 currently; and
- A draft UBA price of $10.17 compared to $10.92 currently.
"We will review the materials announced today and continue to work
constructively within the Commerce Commission's process as these draft prices
are finalised," said Chorus CEO Mark Ratcliffe.
"The aggregate price represents around a $6.50 decline from the regulated
wholesale price of $44.98 that was in place until 1 December 2014, so
consumers should not expect to see any increases in retail pricing," he said.
On the basis that all other charges and demand remain consistent, Chorus
estimates that the draft FPP pricing represents around an $80 million
annualised EBITDA reduction from demerger pricing, based on connection
numbers at 30 September 2014. This compares to the aggregate annualised
EBITDA reduction of around $170 million Chorus identified from the
Commission's earlier UCLL, UCLFS and UBA IPP decisions.
The Commission has not provided any guidance on backdating or on transaction
charges at this stage.
The Commission has also announced that it is consulting on whether to open a
review of the UBA service and the scope of any such review.
The FPP process is currently scheduled for completion in April 2015.
A copy of the Commission's release is attached.
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:00258386 For:CNU Type:GENERAL Time:2014-12-02 09:01:52
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