Chorus signs new UFB agreements with Downer, Transfield

Tuesday 23rd December 2014

Chorus, the telecommunications network operator, has entered into new service agreements with Downer and Transfield Services to build part of its government-subsidised ultrafast broadband network.

Under the agreements the service companies will provide network connections for Chorus's ultra-fast broadband to single dwellings in the lower North Island and South Island at fixed prices, the Wellington-based company said in a statement. The two agreements do not change the network operator's forward guidance of $1,150 to $1,350 per connection and will apply from February. On an annualised basis, the new contracts are 10 to 20 percent lower than the existing guidance.

"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," said general manager of infrastructure Ed Beattie.

The network operator has also agreed to a new fixed UFB deployment contract with Visionstream for the Auckland area, replacing the previous targeted cost regime.

The greater certainty around deployment costs of the UFB come after the Commerce Commission effectively lifted the amount the network operator can charge telecommunications companies for the use of its regulated copper lines. The regulator had earlier slashed the amount, which Chorus said left a hole in the funding of its UFB rollout, which was commissioned by the government.

Chorus expects to update its $1.7 billion to $1.9 billion forecast cost for building the UFB network once it completes talks with parties over new agreements in other areas.

Shares of Chorus were unchanged at $2.62 and have gained 82 percent since the start of the year.

BusinessDesk.co.nz

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