Commerce Commission sets December deadline on Chorus copper pricing; shares jump

Friday 28th March 2014

The Commerce Commission plans to determine a final price for what Chorus can charge users of its copper line services by Dec. 1. The shares gained 4.6 percent, making it the best performing stock on the benchmark NZX 50 Index today.

The regulator will conduct the final pricing principle for Chorus's unbundled bitstream access and unbundled copper local loop services by December, when the telecommunications network operator is expected to adhere to the new regulated prices initially set by using international comparisons.

"In February the commission outlined the process for pricing the UBA service only but following discussions with modellers retained for the exercise, French firm TERA Consultants, the commission believes it is possible to complete both processes in this time frame," it said in a statement.

The commission was already working on a similar determination for access to Chorus's UCLL services, which lets retailers rent the lines for voice and broadband services, and will use the UCLL process to help inform the UBA one. UBA services give internet service providers access to the network company's electronic switchgear on the copper lines.

Shares in Chorus climbed 7.5 cents to $1.70, and have gained 13 percent this year after being punished in 2013 due to the regulatory risk surrounding its future.

The pricing review is in parallel with a Chorus appeal of the commission's initial pricing determination in November last year setting the UBA monthly price at $10.92, cutting the combined regulated price to $34.44 per line from $44.98.

Justice Stephen Kos reserved his decision in the High Court earlier this month, while indicating he would have serious reservations about setting aside the review and ordering it to be done again.

BusinessDesk.co.nz

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