Chorus moves to address $1 billlion funding gap

Company delivering NZ broadband network agrees to package with Crown Fibre Holdings

Chorus has agreed to a package of improvements to New Zealand’s ultra-fast broadband initiative with Crown Fibre Holdings.

It is hoped the improvements will ensure the roll-out is more cost-effective, provides better outcomes for end-users and eliminates some barriers to take up.

According to a company statement, the package does not require any additional funding from CFH, change the underlying contractual obligations to pass all premises in Chorus’ coverage area before December 2019, or change the network requirements.

The announcement follows the appointment of Mark Tod and Mike Lott to replace outgoing general manager of marketing and sales, Victoria Crone.

Chorus chief financial officer, Andrew Carroll, said the initial set of initiatives would help Chorus deliver ultra-fast broadband faster, smoother and more cost effectively.

“While Chorus is firmly focused on managing its costs, both parties have worked on the basis that we need to find innovative ways to deliver better outcomes, and that would require a degree of give and take,” he said.

“We all want UFB to be an enormous success and these improvements are an important step towards that.”

Carroll said the improvement gave it a greater degree of flexibility to manage its own costs effectively while still achieving the same outcomes and also facilitating the uptake of UFB.

“In particular, this flexibility will enable Chorus to better manage its cash flow through the peak of the balance of the capital intensive period of the build, as well as addressing some of the $1 billion funding gap,” he said.

“There is no one silver bullet that will address this issue, but several small incremental changes all help towards navigating a very challenging period.

Carroll said he could not put a dollar value on the changes.

“While some of these initiatives have been accelerated by the funding gap Chorus faces, several of them were already under discussion at both parties were looking to further streamline the build,” he said.

“We will continue to work closely with CFH to identify further improvement that enable both parties to deliver great outcomes for the New Zealand.”

The initiative includes increasing deployment flexibility, aligning CFH investment to Chorus cost-of-build, deferral of UFB in areas where there is already an extensive footprint, introduction of Fibre-to-the-Building, greenfields reticulation, increasing the non-standard installation fund by $8 million and reducing its fibre marketing spend by $2.5 million.

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Tags Chorus chief financial officerCrown Fibre Holdingsandrew carrollvictoria crone

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