CNU - Chorus

[NZSilver]

Fellas, this is going to drop further, I would not be going near it even at these levels. Sentiment will be negative.

[gv1]

Sorry she advised the prime minister not the other way.
Last year, Chorus made monopoly profits of $171 million and paid $95 million in dividends to shareholders, of which up to $600,000 would have been paid to IML. At the same time, Mr Key has told parliament (http://www.parliament.nz/en-nz/pb/business/qoa/50HansQ_20130917_00000001/1-telecommunications-infrastructure-pricing%E2%80%94commerce) that Chorus chair Sue Sheldon privately provided him with confidential information that indicated her company was at risk of going broke. Despite this, the copper monopolist planned until recently to pay another $100 million to its shareholders in 2013/14 dividends, the Coalition says... NBR

[Beagle]

Fellas, this is going to drop further, I would not be going near it even at these levels. Sentiment will be negative.

I agree and people with shares in MRP and Meridian can get out before the **** hits the fan.

[NZSilver]

I agree and people with shares in MRP and Meridian can get out before the **** hits the fan.

Yes Roger, Just sent my parents the PWC report as they bough into MRP and Meridian. I just dont understand why people have had such a narrow scope interm of investing. Its like the only shares on the market for them are MRP and MELCA. I think there are far better investments on the NZX with what i belive is better growth and lower risk. Also why would you invest in two power comapnies, surely you should invest in another industry to spread risk. Anyway thats my rant over.

http://media.nzherald.co.nz/webcontent/document/pdf/201348/PWCReport.pdf

DISC - dont hold MRP, MELCA or CNU, but if there are any big price drops I might pick some up esp MELCA.

[Merc]

I just dont understand why people have had such a narrow scope interm of investing. Its like the only shares on the market for them are MRP and MELCA.

Monopoly. We were all brought up to believe that buying the utilities (the Railway Stations) was a safe bet. With all 4 you were pretty much guaranteed a slow but steady income. Buying properties and putting up hotels was guess work and speculation.

But the world has changed...

[peat]

I think there are far better investments on the NZX
http://media.nzherald.co.nz/webcontent/document/pdf/201348/PWCReport.pdf


Thanks for the link

pg 10 says it all huh

5116

[gv1]

Designed to screw New Zealandars and bring mafias in.

[Poet]

What I want to hear is what is Chorus management doing about the situation.

Nothing but a deafening silence from that quarter so far

We need some communication to shareholders - and soon

[jamiec26]

What I want to hear is what is Chorus management doing about the situation.

Nothing but a deafening silence from that quarter so far

We need some communication to shareholders - and soon

what to you mean silence... #gigatown....

completely agree though. it's been all; ComCom, Amy Adams, Copper Retailers.

[Silverlight]

What I want to hear is what is Chorus management doing about the situation.

Nothing but a deafening silence from that quarter so far

We need some communication to shareholders - and soon

Mark was on Radio NZ this morning, have a listen.

http://www.radionz.co.nz/news/political/229299/chorus-hopeful-of-broadband-pricing-solution

[Harvey Specter]

What I want to hear is what is Chorus management doing about the situation.

Nothing but a deafening silence from that quarter so far

We need some communication to shareholders - and soonWhat is there to say? They have said they are helping the Govt review, they have withdrawn dividend guidance until settled and they have appealed the ComCom's decision.

There is probably nothing else to say until the government reports back other than to re-emphasis that they disagree with the ComCom and hope to receive a higher price once the full review is undertaken.

I think there will also be some action over whether changes are backdated etc but that isn't a factor for at least a year.

[Aaron]

I recall Paper Tiger put a value on CNU back on this thread based on predicted Comcom changes. Is there anyway to easily find this without looking at every page? Can I search PT posts?

[Bobcat.]

I recall Paper Tiger put a value on CNU back on this thread based on predicted Comcom changes. Is there anyway to easily find this without looking at every page? Can I search PT posts?

Go to the tab 'search thread' towards top right.

[Aaron]

Thanks Bobcat

[NZSilver]

http://www.stuff.co.nz/technology/digital-living/30004870/not-everyone-buys-claim-chorus-could-walk

[Snow Leopard]

About 5 months or 1000 thread posts ago I crunched some numbers and pointed out that ComCom decisions could have a devastating effect on CNU profits and the ability to fund their work.

Unfortunately this has come to pass. Whilst it is all well and good to believe that the cavalry will come and rescue CNU at some point in the future it is only one possible outcome.

I have re-crunched my numbers and have come up with a current value for CNU of $1.61.
So at the moment I still would not touch this as an investment with a light sabre.


Best Wishes
Paper Tiger


Best Wishes
Paper Tiger

[Aaron]

Pity I didn't heed your valuation PT. Small consolation that I halved my holding. Sparky will be sad National are blocked from intervening. Is that a knock on effect for the power companies or todays report on power in NZ.

[Silverlight]

About 5 months or 1000 thread posts ago I crunched some numbers and pointed out that ComCom decisions could have a devastating effect on CNU profits and the ability to fund their work.

Unfortunately this has come to pass. Whilst it is all well and good to believe that the cavalry will come and rescue CNU at some point in the future it is only one possible outcome.

I have re-crunched my numbers and have come up with a current value for CNU of $1.61.
So at the moment I still would not touch this as an investment with a light sabre.


Best Wishes
Paper Tiger


Upside 6%! :p

[klid]

I bought some today. I have this thing for buying things on bad news when the price drops, that's a silly thing to do huh?
But I was thinking of buying this at $2.30 not so long ago so could have been sillier I guess.

[BIRMANBOY]

Well 50% of the trades today were people of similar inclination.....does that help?
I bought some today. I have this thing for buying things on bad news when the price drops, that's a silly thing to do huh?
But I was thinking of buying this at $2.30 not so long ago so could have been sillier I guess.

[macduffy]

I bought some today. I have this thing for buying things on bad news when the price drops, that's a silly thing to do huh?
But I was thinking of buying this at $2.30 not so long ago so could have been sillier I guess.

If you think that there's money to be made out of CNU, an alternative strategy would be wait until the SP finds a base. Would miss the first few cents perhaps but might also save many more.

[Bobcat.]

Today's drop to 147 was almost a 20% drop - that's huge for a single day. If this was a bottom that had appeal for the big boys then IMO it would've rebounded higher than its close of 153. If Monday that 147 - 150 range is tested and holds then the day may close with a higher low...in which case it could well be time to buy.

The more conservative amongst us may prefer to also wait for a higher high. The less risk-averse (and reckless?) amongst us may instead throw caution to the wind and simply try to pick a bottom (a grubby business).

BC

[Bobcat.]

More pain ahead on Monday. two days of red, then buy. if there's a sharp sell off first thing in the mrning, buy it and hit the rebound like last time. Easy as pie!

Make sure with deadcat bounces that you also have a strategy for selling, not just one for buying. Many sudden drops like this rebound for a day or two then drift south again and may take weeks (sometimes months) to recover on an upward trendline.

If I come in to buy some Monday, I will do so when support looks solid but will stop loss my holding in case I get it wrong. There's enough liquidity with this stock to do that. Then all I have lost is brokerage. My sales strategy would then be to sell either on a spike or after no more than three days. Yep, that could work (it has before - not always but often enough to be in the money).

BC

[RedWizzard]

This drop might be a bit of an over-reaction by the market. Amy Adams all but said that legislating over the Com Com's decision was the last resort weeks ago so I don't think all that much as changed.

[Stu]

Bought today at 1.52 and will hold for at least a year, will add if it falls further.

[BlackCross]

SkyCity, the power companies and now this - these latest political shenanigans may be the last straw for a lot of overseas investors.

[Harvey Specter]

SkyCity, the power companies and now this - these latest political shenanigans may be the last straw for a lot of overseas investors.
Yes. So much for the so called safe stocks. Add into that Vector which is on negative credit watch due to regulatory concerns.

May as well put all your money into XRO, PEB, BLT and SNK. - much lower risk and higher (ie positive) return)

[jpg]

I'm generally concerned that the management of Chorus didn't really take into consideration the recommendations the ComCom could have come out with when they were putting in their bids for UFB, and now want to sit back and claim foul? Isn't that just blatantly irresponsible?

They should have had people in the business doing risk assessments on different scenarios. Instead they've gone the way of Solid Energy, chosen the scenario that management liked, and now everyone is sitting back flabbergasted at how this could happen? It's madness.

[Harvey Specter]

I'm generally concerned that the management of Chorus didn't really take into consideration the recommendations the ComCom could have come out with when they were putting in their bids for UFB, and now want to sit back and claim foul? Isn't that just blatantly irresponsible?

They should have had people in the business doing risk assessments on different scenarios. Instead they've gone the way of Solid Energy, chosen the scenario that management liked, and now everyone is sitting back flabbergasted at how this could happen? It's madness.I assume they have done work that shows that they will get a higher price under the appeal process (which uses a different calcuation method).

[mrsym0r]

I have been watching the tumbling CNU stock with great interest. I still believe there will be a good buying opportunity, but only once a clear support level has been found and their management team has a clear plan forward to return them to a path of sustainability. I suspect we're going to watch it tumble much further before it stabilises

[Harvey Specter]

Are they going to have issues with debt covenants - and I am not talking about borrowing more, I am talking about current borrowings. If any covernants are tied to market value, they they are stuffed.

[Sgt Pepper]

I agree. As a relatively new modest investor I would be tempted to buy Chorus for the following reasons, Please feel free to comment. I am 55 and would like to acquire a portfolio of dividend producing stocks over the next ten years I know that Chorus will have to drastically reduce its dividend pay out, and will be priced accordingly. However once the investment in UF broad band is completed and the take up by consumer matches expectations then in 5 years time Chorus will be able to deliver a good dividend stream

[Longhaul]

Sam Morgan tweeted about this on the weekend. "Chorus now worth only $600m. Must be cheap at some point unless you think it is going broke, which the government would never allow."

I think he's got a pretty good point. How much is the copper network inherently worth? If you can pick the bottom I think you'll do pretty well.

[craic]

Herald poll this morning was running 80/20 against support for Govt. intervention/support. Politicians with half a brain will react to this sentiment, regardless of what they read on this forum.

[NZSilver]

Has anyone calculated some numbers on the current price and com com decision - interms of revenue, cahsflow, profit and DIV - now $1.45 ish. I think it could drop further but I will keep an eye on CNU. Dont hold but could be keen to pick up some "xmas sale" shares...

[Beagle]

Normally I take a fundamental approach to asessing fair value of a stock but I always look to validate that with technical analysis.
In this situation I believe that only the very brave need apply before the chart shows a clear bottoming out.
This could go to a dollar or much worse before all the dust has finally settled. Who wants to stand in front of a train ?
Just watch the chart, fundamental analysis in this situation is all but useless. If and when it goes back through the 100 day moving average going back up and sustains that movement, that'll be the time to buy and not before, in my opinion. My 2 cents.

[Harvey Specter]

How much is the copper network inherently worth?Its worth nothing ... once CNU finishes building the Fibre network. Just like anologue TV, and UHF SkyTV, Windows XP support, at some point, they will just turn it off (in those areas with 100% Fibre coverage).

While they are intrinsically linked, the ComCom decision on Copper has nothing to do with the UFB rollout. If CHU pulled out of the Fibre contract, the ComCom decision would still apply to its Cooper business.

Therefore, what it really needs to do is pull out of its (legislated?) obligation to provide copper services. If they have rolled out Fibre to a whole area, they should send a letter saying
In 1 year, we will no longer be maintaining copper service. Please contact Telecom, Vodafone or your existing telecommunications providered to connect to Fibre

[Xerof]

Herald poll this morning was running 80/20 against support for Govt. intervention/support. Politicians with half a brain will react to this sentiment, regardless of what they read on this forum.
I think if you polled the National parliamentarians, you would also get 80/20 against, if not higher. It's really only the media who are reporting this as if the Nats had put it up in Parliament - they have not, and will not imo

Chorus have already asked for a review of the price to build a copper infrastructure. This will take about 2 years according to the Commcomm, and should legitimise the current pricing regime no sweat. So what are we going to see? A drop in their income from after Dec 2014, then a massive increase again at the beginning of 2016. In the interim, no divs for shareholders for 2014/15, (the cash will be used to bridge the 'income for capex' gap while they await Commcomms new decision) and a lot of wailing and gnashing of teeth from all and sundry

I don't currently hold but am getting itchy tingling feelings

[Harvey Specter]

Chorus have already asked for a review of the price to build a copper infrastructure. This will take about 2 years according to the Comcom, and should legitimise the current pricing regime no sweat. So what are we going to see? A drop in their income from after Dec 2014, then a massive increase again at the beginning of 2016. Are the results from the review back dated. I am under the impression they are which is why they say the "copper tax" will only get shifted from CNU to the retailers as they cant reduce their prices as they may have to pay up at a later date. It was this uncertainty that I thought Amy Adams said she wanted to avoid.

[Xerof]

Not sure Harvey. Need to read further on the finer detail, but I see your (and her) point.

[okay]

Now that it seems almost certain dividends are for the chop, and John Key has said there is to be no time extensions/delays to roll out today, what options remain for Chorus?
More government loans, guaranteeing of loans, share purchases? With election year looming you can already hear the opposition drums banging out crony capitalism repeatedly and all parties altering their agendas according to the populous to achieve/stay in power.
I expect even if they do any of these things to save political face they are going to expect chorus to make some contribution maybe over and above reduction of dividends?
Chorus Capital raising? With the fast falling SP this will mean having to put up more shares at lowered prices further diluting already fast diminishing profits.

Positives?

Hang in there shareholders for another full pricing decision that may or may not go your way? Hang in there stage 2, and wait until fibre fully rolled out, (on time and within budget of course:) to supersede low copper to return to business as usual?

But in this kind of political and regulatory environment can it ever be business as usual? What if the comcom or some future political party steps in further down the track after fibre is in use and says too much profit being made, too much divs to holders being paid, consumers getting ripped off compared to international pricing and here we go again?

Discl: watching/not holding:)

[Bobcat.]

I don't currently hold but am getting itchy tingling feelings

Today we are witnessing a lower low....it's not yet time to buy IMO. I'm expecting a big volume dive before the bounce. Looking to time my buy on either:

a) the next dump (anticipating an immediate rebound); or if I miss that...
b) a day when the sp achieves a higher low than the previous day; or
c) later around an inverse shoulder (i.e. at the first dip travelling north).

In anticipation of a), I have a small bid that I'm adjusting each day to sit 10% below market price. It's currently in the 130's.

Risk/reward profile varies of course for each tactic:
a) High
b) Med
c) Low

[macduffy]

Shareprice down another 5% today and already over 4m shares traded. I wonder who all the brave contrarians are?

To okay's list of considerations above, I'd add the risk of the introduction of a new cornerstone equity partner/shareholder at a further heavily discounted price. Heavily dilutive for current shareholders of course but it may become a necessity as events develop.

[vorno]

Latest official update: https://www.nzx.com/companies/CNU/announcements/244624

[Poet]

Latest official update: https://www.nzx.com/companies/CNU/announcements/244624

As a shareholder, it is good to finally hear directly from the company about its fight back strategy

[RedWizzard]

Now that it seems almost certain dividends are for the chop, and John Key has said there is to be no time extensions/delays to roll out today, what options remain for Chorus?
More government loans, guaranteeing of loans, share purchases? With election year looming you can already hear the opposition drums banging out crony capitalism repeatedly and all parties altering their agendas according to the populous to achieve/stay in power.


I'm sure the government will be as hands-off as possible but they are going to have to do something. Aside from the threat to the UFB, if Chorus were to get in real difficulties they'd risk disruption to our existing internet access. Anyone fancy days, weeks, or months of no internet while receivers try to figure out the mess? Can you imagine the economic hit the country would take?

[Beagle]

Now that it seems almost certain dividends are for the chop, and John Key has said there is to be no time extensions/delays to roll out today, what options remain for Chorus?
More government loans, guaranteeing of loans, share purchases? With election year looming you can already hear the opposition drums banging out crony capitalism repeatedly and all parties altering their agendas according to the populous to achieve/stay in power.
I expect even if they do any of these things to save political face they are going to expect chorus to make some contribution maybe over and above reduction of dividends?
Chorus Capital raising? With the fast falling SP this will mean having to put up more shares at lowered prices further diluting already fast diminishing profits.

Positives?

Hang in there shareholders for another full pricing decision that may or may not go your way? Hang in there stage 2, and wait until fibre fully rolled out, (on time and within budget of course:) to supersede low copper to return to business as usual?

But in this kind of political and regulatory environment can it ever be business as usual? What if the comcom or some future political party steps in further down the track after fibre is in use and says too much profit being made, too much divs to holders being paid, consumers getting ripped off compared to international pricing and here we go again?

Discl: watching/not holding:)

Good post, sums the rather dire situation up very well. With the left so strongly alligned and the apparent rampant anti-capitalist approach they seem so happy to take, its difficult to see why anyone would bother to invest in this sort of environment.

Disc, watching from the sidelines until the bottom of this black hole has been proven to be reached.

[klid]

Any thoughts about the outcome of the high court case?

I like this quote from the PM:
"He reiterated there might be other options, saying the Crown had got a good deal from Chorus originally."

Source: http://www.stuff.co.nz/technology/digital-living/30004899/ufb-options-narrow-as-key-rules-out-delay (end)

[fish]

Chorus make a good case-
Chorus is also filing for a High Court appeal of the same decision to determine whether the Commission has applied the law correctly.

“The decisions to apply for an FPP and file for a High Court appeal have not been taken lightly by Chorus’ Board and Management, but the limitation of two benchmarked countries despite the specific factors set out in section 18 and 18(2A) has left us with no choice. We have a duty to our shareholders to ensure we explore every option before us, including the High Court appeal,” said Mark Ratcliffe, Chorus CEO.

“Completing the FPP processes for UCLL and UBA could well mean that we take another two years to end up rebalancing at around the same aggregate price as we have today. There is also precedent for the revised prices from the FPP to be backdated.

“We recognise that the Commerce Commission has to operate within the regulations that are set in the Telecommunications Act. The Commission’s initial decision is a symptom of regulations that simply do not align with the Government’s policy of a transition to fibre.

“We are not looking to blame the Commission, because it can only referee by the rules of the game as they are set.

“While the Government has only just begun its policy reviews, and we recognise that it may no longer have the support it needs for a direct intervention on UBA pricing, a legislative process is required to free up the Commission to do its job in a regulatory framework that is aligned to Government policy,” he said.

Speaking when she announced a review of Telecommunications regulation earlier this year, ICT Minister Amy Adams said: “regulatory certainty is an important factor in the ability of New Zealanders to have early access to high-quality communication services based on new technologies … the policy framework needs to be predictable and stable for all concerned.”

And in an independent report, former Telecommunications Commissioner Dr Ross Patterson stated that the current regulatory framework is not appropriate to support the transition to fibre.

“The ladder of investment regulatory framework that is currently in place is designed over time to remove the natural monopoly of the access network,” said Dr Patterson. “However, the structural separation model adopted through UFB accepts that the access network is a natural monopoly and building competing networks is inefficient. The two frameworks cannot co-exist efficiently.

[couta1]

So JK now acknowledges that his Govt could have ruled out legislation to override the com com before the other parties showed no support for the idea and he didn't think last weeks decision caused the share price to drop, let's crack open a few dozen Tuis boys, I'm with the Aussie fund manager on this one, the Govt ramped up the share price earlier in the year by indicating strongly they would override the comcom.

[Xerof]

Key also said "Chorus could go broke"

who paid any attention to that?

selective hearing is a common trait

[warthog]

Key also said "Chorus could go broke"

who paid any attention to that?

selective hearing is a common trait

Politicians say a lot of things.

Watch what they do, rather than listen to what they say.

[Longhaul]

Can anyone honestly believe that this government would let Chorus fail?

Disc - not a holder but might jump in this week.

[couta1]

Come on now guys saying the share price didn't drop because of political interference that's priceless, and I think you missed the whole point of what I was trying to say, a lot of people including myself were silly enough(Including the Aussie fund manager) to actually believe that the Govt would override the comcom as they strongly indicated so purchased CNU shares, we wouldn't have gone near them if the Govt had said we may be able to override the comcom but were not sure at this point

[fish]

[QUOTE=klid;446531]Any thoughts about the outcome of the high court case?

I am so glad chorus are taking com com to the high court.
Somehow i think they will be more impartial to the stong case that chorus has compared to the current rantings of those supporting com com.
What i particularly like is that there is precedent to the final price being back dated should the case run past december 2014

[couta1]

Agree Fish but how long and how much uncertainty in the mean time with no guaranteed good outcome for CNU and an election year on the horizon

[bull....]

i stick to my earlier calc 75 - 1.15 with no div

[couta1]

You know Bull I kinda hope your right that outcome would make me feel a whole lot better,cheers

[fish]

Agree Fish but how long and how much uncertainty in the mean time with no guaranteed good outcome for CNU and an election year on the horizon
its in everyones best interests for this to happen asap.
Until the final outcome is determined no one knows the final pricing.
I think com com decision making process will be taken apart by lawyers acting for chorus

[Bobcat.]

Since Chorus is pinning its hopes on a favourable High Court outcome, and with Christmas almost upon us, IMO it will be at least 4 months away, probably longer, before there is any significant boost to its share price (assuming the legal outcome is favourable!). Any rebound meanwhile will be short-term, technical and unlikely to be sustained.

I'm expecting a rebound to somewhere in the range 150-160 and then, until the legal uncertainty is resolved, trading in a narrow range between around 150 and as low as 130 (possibly lower depending on announcements re divi, government intervention (unlikely), etc). Anyone expecting a short-term recovery in this stock has to be dreaming. There is some trading opportunity but not a lot in my view...better prospects elsewhere for now.

BC

[Master98]

I guess government will come to rescue, but condition is no dividend, nowdays no more free lunch, sp will trade below its NTA($1.2).

[Longhaul]

Since Chorus is pinning its hopes on a favourable High Court outcome, and with Christmas almost upon us, IMO it will be at least 4 months away, probably longer, before there is any significant boost to its share price (assuming the legal outcome is favourable!). Any rebound meanwhile will be short-term, technical and unlikely to be sustained.

I'm expecting a rebound to somewhere in the range 150-160 and then, until the legal uncertainty is resolved, trading in a narrow range between around 150 and as low as 130 (possibly lower depending on announcements re divi, government intervention (unlikely), etc). Anyone expecting a short-term recovery in this stock has to be dreaming. There is some trading opportunity but not a lot in my view...better prospects elsewhere for now.

BC

I think the Government will pull a rabbit out of the hat this week or next, given the independent report will be out on Thursday. The price recommendation from Com Com will probably stay, but John Key isn't about to let Chorus hang out to dry since it would reflect terribly on the National party.

Leaving this to drag out for four months would be political hari kari in my opinion. Will be interesting to see what happens.

[couta1]

So Longhaul everyone must be reading Alice in Wonderland currently actually I'd put more faith in that story than a rabbit coming out of the Govts hat at the moment, maybe Nightmare on Elm street would be more appropriate reading.

[Longhaul]

So Longhaul everyone must be reading Alice in Wonderland currently actually I'd put more faith in that story than a rabbit coming out of the Govts hat at the moment, maybe Nightmare on Elm street would be more appropriate reading.

John Key is a deal maker, we know that. Now that he can't legislate, he will be looking at other deals that enable CNU to deliver on its contractual obligations and survive as a going concern. JK will also be highly aware of the damage this issue has caused to shareholders large and small and will be looking to reverse some of that damage. One thing JK has shown over the last few years is looking after big business, he's not about to stop.

[couta1]

Actually Longhaul,I had a reply from JKs office re our CNU plight my comments were duely noted and my email was sent to Tony Ryall as he is apparently in charge of these things, pass me another Tui, and by the way how do you reverse damage for shareholders that have sold out for massive losses already???

[silu]

John Key is a deal maker, we know that. Now that he can't legislate, he will be looking at other deals that enable CNU to deliver on its contractual obligations and survive as a going concern. JK will also be highly aware of the damage this issue has caused to shareholders large and small and will be looking to reverse some of that damage. One thing JK has shown over the last few years is looking after big business, he's not about to stop.

This is based on JK of two years ago. Me thinks he wants a third term and as it was with the Labour led govt under HC the appeasing of middle voters will know no end. This includes cries of "cheaper broadband" instead of "fibre for all".

[fish]

This is based on JK of two years ago. Me thinks he wants a third term and as it was with the Labour led govt under HC the appeasing of middle voters will know no end. This includes cries of "cheaper broadband" instead of "fibre for all".
Wouldnt it improve his election chances if he could announce both cheaper broadband and fibre for all.Com Com have arrived at a $10 reduction in the price chorus can charge retailers for copper.
Maybe $5 reduction before the election might appease all without the need for high court intervention and repricing according to real cost .

[nextbigthing]

I guess government will come to rescue, but condition is no dividend, nowdays no more free lunch, sp will trade below its NTA($1.2).

Shareprice below NTA? I don't think Mr Market is that stupid.

[Poet]

So I see that Peter Dunne is about to be reinstated to cabinet. Anyone see a deal being made here?

[winner69]

Chalkie says - Some of the people most confused about this issue seem to be investors in Chorus, who are riled that regulatory action has roughed up their supposedly smoothly profitable path.

With that sort of comment no doubt his views will be shot down in flames

Debt at core of Chorus's fiscal fragility

http://www.stuff.co.nz/business/opinion-analysis/9472236/Debt-at-core-of-Choruss-fiscal-fragility

[Aaron]

Chalkie says - Some of the people most confused about this issue seem to be investors in Chorus, who are riled that regulatory action has roughed up their supposedly smoothly profitable path.

With that sort of comment no doubt his views will be shot down in flames

Debt at core of Chorus's fiscal fragility

http://www.stuff.co.nz/business/opinion-analysis/9472236/Debt-at-core-of-Choruss-fiscal-fragility
I don't know part of Sparky's reason to invest in CNU was that National would step in and override the regulators to make sure the fibre roll out was a success. A bit of a gamble in hindsight.

[JAYAY]

If benchmarking aginst Sweden and Denmark is such a great idea then why not regulate everything else using the same basis. Power charges, bank charges, right down to the price of fish. Hey, and their tax rates. The complete model.
This of course does not make any sense. And it makes even less sense to selectively pick out another country's costs for just one of those things and apply it directly here in NZ.
How many other contries would apply such a process. I wonder if Sweden has used NZ as a model for any of their costs. Of course not.
The FPP process is the only acceptable process for NZ.

[Xerof]

Whilst everyone luxuriates in misconception, (lovely turn of phrase Tim), I'm seeking an entry point. Have to confess its difficult to find......maybe its for next years agenda

[Harvey Specter]

Chalkie says - Some of the people most confused about this issue seem to be investors in Chorus, who are riled that regulatory action has roughed up their supposedly smoothly profitable path.

With that sort of comment no doubt his views will be shot down in flames

Debt at core of Chorus's fiscal fragility

http://www.stuff.co.nz/business/opinion-analysis/9472236/Debt-at-core-of-Choruss-fiscal-fragilityChalkie states:


Let Chalkie cast the first stone.
Suppose you had a ferry plying Cook Strait. It's 20 years old and showing its age. It is slow, uncomfortable and becoming prone to mechanical failure. Recognising the service isn't up to scratch, another ferry company enters the market with a new ship - a faster, more comfortable one with entertainment facilities.
The old ferry company argues that its ferry is worth the same as the new one, because that's how much it would cost to replace it.
So it charges the same price - and quickly goes out of business. Clearly, it is nonsense to say the old ferry can be valued at the cost of replacement, or that customers would be willing to pay the same price for the old and new services.

First - My understanding is the entry level fibre isn't that much better than top of the line copper, and for the general masses watch cats falling off a couch on youtube, they will not notice the difference. Cooper doesn't break down and if you are close enough to the exchange, speed is similar to the restricted fibre. Telecom/Vodafone charge the same for data whether you are on 2g, 3g or 4g (i think 2Degrees differentiates out of its main areas?) - same service, same cost - so his new boat, old boat argument does not stack up.
Second - why are we investing $1.5B into fibre if the plan is not for it to replace copper

[Bobcat.]

Whilst everyone luxuriates in misconception, (lovely turn of phrase Tim), I'm seeking an entry point. Have to confess its difficult to find......maybe its for next years agenda

Likewise, Xerof. I'm not convinced that all the bad news is behind them yet. I'm staying clear until the air is cleared...sometime next year I suspect but meanwhile...still watching, interested. What's happening with this company has much broader ramifications.

BC

[Bobcat.]

Why are we investing $1.5B into fibre if the plan is not for it to replace copper[/FONT][/COLOR][/FONT][/COLOR]

Yes, you may well wonder, HS.

Fibre is better at supporting 2 directional video (interactive or otherwise). It could be of course part of the grand conspiracy to spy into our homes...

[clip]

fibre is better at supporting all internet traffic, not just video, and video isn't the only practical use it would have for NZ

[blackcap]

Has anyone considered that they may not even be able to walk away from the project. In that the penalty clause could trigger bank covenants?

[Harvey Specter]

fibre is better at supporting all internet traffic, not just video, and video isn't the only practical use it would have for NZAnd a Ferrari is better than a corolla but they are both limited to 100kph (+4kph). Luckily, for those willing to pay more, Fibre can be unleashed - Gigatown!

[winner69]

Harvey First - My understanding is the entry level fibre isn't that much better than top of the line copper, and for the general masses watch cats falling off a couch on youtube, they will not notice the difference. Cooper doesn't break down and if you are close enough to the exchange, speed is similar to the restricted fibre. Telecom/Vodafone charge the same for data whether you are on 2g, 3g or 4g (i think 2Degrees differentiates out of its main areas?) - same service, same cost - so his new boat, old boat argument does not stack up.
Second - why are we investing $1.5B into fibre if the plan is not for it to replace copper

I think was saying that why should the copper network be valued at cost of a fibre (replacement) network for pricing purposes. The copper network has been written down over the years and is in Chorus's book at a much lower figure than a new fibre network. As such to make an economic return they don't really need to charge as if it was brand new.

He did bring 'service' into the argument and that is what you picked on.

Maybe there is a bit of Whilst everyone luxuriates in misconception, .... but what the heck do I know and it is me that misunderstood his argument

[Harvey Specter]

I think was saying that why should the copper network be valued at cost of a fibre (replacement) network for pricing purposes. The copper network has been written down over the years and is in Chorus's book at a much lower figure than a new fibre network. As such to make an economic return they don't really need to charge as if it was brand new.But if you agree with this, then you agree with Greens/Labour Kiwipower priceing idea - basing price on the original cost.

[clip]

And a Ferrari is better than a corolla but they are both limited to 100kph (+4kph). Luckily, for those willing to pay more, Fibre can be unleashed - Gigatown!

In this case however the corolla is limited to 50kph by the engine (copper as a physical medium) and the ferarri is limited to 100kph by the owner of the roads (ISP)'s. The Ferrari will be able to go faster in future as and when it is deemed necessary/standard for it to do so

[winner69]

But if you agree with this, then you agree with Greens/Labour Kiwipower priceing idea - basing price on the original cost.

Keeping politics out of it why not do that?

[klid]

Morningstar drop fair value rating by over 55%:

Recommendation impact (last updated: 04/12/2013) --
Event analysis A No Vote for Fibre: Regulator's Decision Sees Significant Downgrade to Our Fair Value Estimate
With the New Zealand government unable to reverse final regulatory pricing on wholesale broadband, we believe the new pricing structure will stand.

Our fair value estimate declines to NZD 1.60 from NZD 3.60. We apply ComCom's final wholesale equipment for broadband price of NZD 10.92 per month, compared to our previous assumption of NZD 16 under the government's discussion paper. This represents a 50% decline to existing equipment pricing of NZD 21.46. Our fiscal 2015 and fiscal 2016 earnings forecasts decline 9% and 34%, respectively. The larger impact in fiscal 2016 reflects the first full year of lower prices, which will be applied on 1 December 2014. Our base case assumes the Chorus appeal will deliver a higher price on wholesale equipment, to NZD $13.50, the mid-point between ComCom pricing and those suggested by the government discussion paper. We also expect retail service providers to pass lower wholesale prices on to consumers, delaying the adoption of fibre technology. With wholesale broadband prices for copper at a discount to fibre, we now assume the fibre penetration rate will remain flat from fiscal 2015 to fiscal 2018. While equity shareholders may find a convertible preference share more palatable, the government may balk at injecting additional capital into Chorus. Our fair value estimate also factors in a fiscal 2014 equity raise of NZD 400 million at NZD 1.00 per share, a 30% discount to its current share price. We don’t expect Chorus to pay a dividend in the near term, and we think its shares are fairly valued.

We also downgrade Chorus' economic moat rating to none from narrow. While Chorus' monopoly infrastructure assets are difficult to replicate, we believe an adverse regulatory regime and long-term regulatory uncertainty will preclude Chorus from earning excess returns on its cost of capital for the foreseeable future.

------------

Thoughts?
I Don't know about the govt "balking" at injection of capital.
And I expect something to be done regarding lower priced copper hindering adoption of fibre.

[Harvey Specter]

In this case however the corolla is limited to 50kph by the engine (copper as a physical medium) and the ferarri is limited to 100kph by the owner of the roads (ISP)'s. The Ferrari will be able to go faster in future as and when it is deemed necessary/standard for it to do soUnder VDSL, the corolla can also go 100kph, the same as the ferrari - sure the Ferrari gets their faster but only if it is not constrained in any other way (if it is behind the corolla at the on-ramp). As we are only renting the cars, not owning them, we do no pay for the ability to go faster in the future.

[clip]

Snap VDSL advertised max throughput 50mbps, telecom ultra VDSL max throughput 70mbps, realistically you're going to get 30-50mbps depending on line quality/proximity to exchange. On the 3 fibre connections i've used, speed tests have been between 95-99mbps to NZ hosts. Granted internationally you're never going to get 100mbps but VDSL is affected the same. Even though NZ is using VDSL2 technology which is capable of up to 240mbps theoretical max, the fact that our ISP's are only offering up to 50mbps shows that our copper lines aren't viable for speeds parallel to the current 100 fibre plans.

Distance from exchange also affects VDSL greatly; "VDSL2 deteriorates quickly from a theoretical maximum of 250 Mbit/s at source to 100 Mbit/s at 0.5 km (1,600 ft) and 50 Mbit/s at 1 km (3,300 ft), but degrades at a much slower rate from there, and outperforms VDSL. Starting from 1.6 km (1 mi) its performance is equal to ADSL2+ (http://en.wikipedia.org/wiki/ADSL2%2B).[3] (http://en.wikipedia.org/wiki/Very-high-bit-rate_digital_subscriber_line_2#cite_note-Tyrone-3)"

Regardless, this doesn't have much place in this thread in terms of how it affects CNU really, but IMO it shows VDSL is just a stop-gap to keep people happy until fibre is available in their area. I can't get VDSL, if I could I would have it - I also can't get fibre. If i had VDSL and could be on fibre, I would already have placed my order. I know a lot of people in similar demographics to myself are of the same opinion

[Harvey Specter]

realistically you're going to get 30-50mbps depending on line quality/proximity to exchange. So faster than an entry level fibre plan which I think are 30down/10up. That Corolla just got an aftermarket turbo charger.

[clip]

So faster than an entry level fibre plan which I think are 30down/10up. That Corolla just got an aftermarket turbo charger.

It may be faster, it also may be significantly slower if you have poor copper lines, or if you are over 1km distance from your nearest exchange. If you are upgrading from ADSL to get faster speeds because you get poor ADSL speeds on a copper line, then VDSL is unlikely to make a significant difference where fibre would. Interesting to note the telecom 30/10mbit fibre plan is the same price with same cap size as the up to 70/up to 5 vdsl plan.

I'm not sure how our discussion weighs in on the CNU shareprice or regulation risk at this point. However the current copper pricing being regulated is a big component in the ability of Chorus to pay for/deploy the fibre network on time - so where you said "As we are only renting the cars, not owning them, we do no pay for the ability to go faster in the future." I feel that our renting costs ARE contributing for the ability to go faster in time. It remains to be seen however whether or not the comcom regulated copper price will stop chorus's ability to deploy the fibre network, or just if it will affect their ability to pay a dividend. I guess we shall have to wait for the independant review :)

[Harvey Specter]

So moving away from my stupid car analogy, provided you are close to an exchange, then fibre and copper are the same so should be priced the same. So Tim Hunters article is flawed.

Re regulation - it will be interesting to see the outcome of the full review, unfortunately we have to wait 2 years!

[clip]

So moving away from my stupid car analogy, provided you are close to an exchange, then fibre and copper are the same so should be priced the same. So Tim Hunters article is flawed.

Re regulation - it will be interesting to see the outcome of the full review, unfortunately we have to wait 2 years!

ENTRY level fibre and copper (VDSL for this example) ARE priced the same. And ADSL is a bit cheaper due to slower maximum theoretical speed. The 100mbit fibre plans are more expensive. Hence I don't really see a problem with the pricing - people want older technology cheaper, just because the newer technology is now available for the same price as the old? They should be happy the new technology IS available for the same price as old, rather than more expensive would would be logical imo.

Unfortunately I can't find the due date of the enquiry right now but I had thought (very possibly wrongly) it was due earlier than 2 years? With chorus lodging a high court appeal against the comcom decision and numerous other factors at play it is a very volatile state and not one that I would consider taking up a holding in at this stage. Even though I have said in the past (not on here) that long term I think they will do very well and would be a good stock to hold. Just too much risk and uncertainty currently

[Harvey Specter]

ENTRY level fibre and copper (VDSL for this example) ARE priced the same. So you have no problem with the currently pricing. ComCom wants to halve the price of copper so VDSL should, in theory, become cheaper than entry level fibre.

[clip]

In my opinion, yes I am fine with the current pricing. Perhaps were I on a lower wage then I would be more concerned, and I am less affected by the price of internet than lower-income households (me being a middle-class, single-income with no house/mortgage or reliants). But then again I could always step down to a cheaper plan and spend approx $30-40 a month less than current.
Our prices for internet in NZ are expensive comparible to other countries such as Aus, United states etc, but they already have the underlying infrastructure - I imagine chorus needs the current spend/prices to build that infrastructure. Maybe they don't, the enquiry shall reveal this I guess. And comparing prices against other countries appears to be partly what has got us into this whole mess in the beginning..

[vorno]

..We may as well start comparing IKEA vs The Warehouse!

[Merc]

Question:
Is the fibre system a parallel system for copper - or does copper also use a fibre backbone thus becoming a hybrid system?

Here in the hills we have ancient copper lines going to the box 1km down the road (a box that is well known to Chorus technicians due to the ancient bit). From the box copper wires travel underground to the local exchange 4km further on.

The local school (4km away at the bottom of the hill and1 km from the exchange) is now on fibre. Presumably this connects to our local exchange as well.

From the local exchange.... ?? Does it go via copper, fibre or satellite to a central exchange somewhere else?

If it is fibre then presumably copper means copper/hybrid rather than standalone copper?

[winner69]

NBR story says CNU may need to raise 400 million at a 30% discount .....but guru analysts are just that so no worries

[JAYAY]

..We may as well start comparing IKEA vs The Warehouse!

Perhaps the Swedes will benchmark their companies against NZ. Makes about as much sense as ComCom using Sweden as a benchmark for Chorus.

[westerly]

Question:
Is the fibre system a parallel system for copper - or does copper also use a fibre backbone thus becoming a hybrid system?

Here in the hills we have ancient copper lines going to the box 1km down the road (a box that is well known to Chorus technicians due to the ancient bit). From the box copper wires travel underground to the local exchange 4km further on.

The local school (4km away at the bottom of the hill and1 km from the exchange) is now on fibre. Presumably this connects to our local exchange as well.

From the local exchange.... ?? Does it go via copper, fibre or satellite to a central exchange somewhere else?

If it is fibre then presumably copper means copper/hybrid rather than standalone copper?

I think you are correct. Any where away from centres of population will possibly never have fibre at the gate. It was only because the NZPO was required by the Govt. to provide a 'phone to anyone who asked for it that rural areas got copper. There is no profit in telecommunications in rural areas.
Of course radio and satellite is an alternative,
Westerly

[RedWizzard]

Question:
Is the fibre system a parallel system for copper - or does copper also use a fibre backbone thus becoming a hybrid system?


The copper system uses a fibre backbone. All of the relatively new large cabinets scattered across the suburbs are connected to the central exchanges by fibre. Thus the copper network is what is known as FTTN (fibre to the node) - this is what the Coalition in Australia are now planning for their National Broadband Network. Our UFB is FTTP (fibre to the premises, same as what the previous Labour government were planning for most of Australia's network).

Our copper network is reasonably competitive compared to other countries telecoms infrastructure - if "Chalkie" was claiming that it is obsolete and therefore worthless he is mistaken.



Here in the hills we have ancient copper lines going to the box 1km down the road (a box that is well known to Chorus technicians due to the ancient bit). From the box copper wires travel underground to the local exchange 4km further on.


Older cabinets, especially in rural areas maybe connected by copper to the nearest exchange. I'm not sure exactly how common that is.



The local school (4km away at the bottom of the hill and1 km from the exchange) is now on fibre. Presumably this connects to our local exchange as well.

From the local exchange.... ?? Does it go via copper, fibre or satellite to a central exchange somewhere else?

If it is fibre then presumably copper means copper/hybrid rather than standalone copper?

It is fibre. So, yes it's a hybrid network. But when talking about these things people are always talking in terms of the "last mile" - that's where the bottleneck is.

[RedWizzard]

So you have no problem with the currently pricing. ComCom wants to halve the price of copper so VDSL should, in theory, become cheaper than entry level fibre.

My understanding is that the VDSL service is not regulated by the ComCom. So it may not become cheaper at all.

[RedWizzard]

So moving away from my stupid car analogy, provided you are close to an exchange, then fibre and copper are the same so should be priced the same. So Tim Hunters article is flawed.


VDSL, as it is implemented in NZ, is theoretically capable of 100 Mbit/s downstream and 50 Mbit/s upstream. But Chorus limit it to 70/10. Even to achieve that you must be extremely close to the exchange/cabinet (probably not more than 100m), have good internal wiring yourself, and have little interference from other sources (e.g. not too many neighbours using xDSL over the same bundle of wires). VDSL is much more sensitive to conditions than ADSL or fibre and I suspect that post-install support costs are significantly higher than too. So you could make a valid argument for pricing VDSL higher than entry level fibre.

Aside from the consistency of fibre installs vs VDSL, fibre is also much capable. The 100/50 plan that is currently available would be possible on VDSL for only a tiny percentage of customers. The 200 Mbit/s plan Chorus are promising for next year is impossible on VDSL as it is currently implemented here (it is theoretically possible using the wider-spectrum 30a profile but currently Chorus as only implemented the 17a (100 Mbit/s) and 8b (50 Mbit/s) profiles). And fibre can do much better, at least 1 Gbit/s.

Going back to that Stuff op ed, I don't entirely agree with him. Most people aren't really going to notice the difference between VDSL and fibre. And the fact that VDSL is less capable doesn't mean it is cheaper to maintain (in fact the opposite). As some one else pointed out, telecom companies often charge the same for 3G vs 2G wireless access which is a very similar situation.

[Muppett]

No longer holding.

Whatever..........
A consortium of businesses, including UFB and content providers backed by foreign capital, will offer Chorus shareholders $3.00 per share and complete the UFB rollout by 2018. Structured not to exceed the 10% threshold for a single shareholder, the consortium will include world class project managers and content rights holders.
http://www.nbr.co.nz/article/chorus-shares-freefall-ck-149396#comment-640218


***

The time to buy is on 15 August when the CC announce their final UBA price. Watch the share price plummet.

***
Don't work for CNU
Hold a truck load of them. Wish I had sold at $3.70 ages ago.

[Merc]

The copper system uses a fibre backbone
...

So if the copper system connects to a fibre backbone - was the fibre backbone installed as part of the fibre rollout?

If so, then this separation of fibre from copper pricing is so, so wrong.

[clip]

fibre backbone was installed some time ago during the local loop unbundling - when they installed roadside cabinets all around the place, they are fibre to the exchange from there. Standard copper in the streets from residential properties to the newer roadside cabinets

[Jay]

We have a cabinet just around the corner from us, about 150 -200m I suppose, I knew it was for Fibre but did not realise that all connections would go thru there now and therefore were Fibre to that point. The exchange is about 3 k's away. Might explain why I get better speed than some others I know (only normal ADSL).

[Merc]

fibre backbone was installed some time ago during the local loop unbundling - when they installed roadside cabinets all around the place, they are fibre to the exchange from there. Standard copper in the streets from residential properties to the newer roadside cabinets

Ah, OK. Thought that might have been a bit of the ammunition that could be used.

The "debate" so far has been completely one-sided in the media. The vocal ones are screaming that fibre should be treated like a stand alone Government essential service project that no one should dare to make a profit on.

Where is the other side? Businesses use a combination of existing income, equity and debt to fund new projects and are actually in business to make a profit for their investors.

The vocal ones are also screaming "down with wealthy capitalist shareholders" completely forgetting that the Government (i.e. the taxpayers) are shareholders, and with a company in the top 15 then many passive funds, Kiwisaver schemes, Super schemes, ACC etc are highly likely to be shareholders too. In other words the vocal ones are shooting themselves in the foot.

DISC: Hold a few shares; unlikely to ever get the option of fibre due to location - but rather hoping that somewhere in the upgrades our existing low broadband speeds will increase.

[couta1]

Latest article in Herald ,Adams states Govt expects CNU to meet significant part of pricing shortfall and we all know what that means bye bye dividends,good luck to holders are there any many left on this site?

[Merc]

We have a cabinet just around the corner from us, about 150 -200m I suppose, I knew it was for Fibre but did not realise that all connections would go thru there now and therefore were Fibre to that point. The exchange is about 3 k's away. Might explain why I get better speed than some others I know (only normal ADSL).

The cabinet 1km away from us is one of the old ones - last upgraded 30 years ago when we came off party lines. Even the Chorus technicians would breathe a sigh of relief if it was replaced with a new one with fibre to it. Unfortunately some of the lines to it have "loading coils" on them to amplify voice and broadband comes to a crashing halt when a house gets switched onto one of these lines.

How do I know this? Personal experience and long chats with the technicians.

[BlackCross]

MorningStar - reduced from $3.60 to $1.60

"....Our fair value estimate declines to NZD 1.60 from NZD 3.60. We apply ComCom's final wholesale equipment for broadband price of NZD 10.92 per month, compared to our previous assumption of NZD 16 under the government's discussion paper. This represents a 50% decline to existing equipment pricing of NZD 21.46. Our fiscal 2015 and fiscal 2016 earnings forecasts decline 9% and 34%, respectively. The larger impact in fiscal 2016 reflects the first full year of lower prices, which will be applied on 1 December 2014. Our base case assumes the Chorus appeal will deliver a higher price on wholesale equipment, to NZD 13.50, the mid-point between ComCom pricing and those suggested by the government discussion paper. We also expect retail service providers to pass lower wholesale prices on to consumers, delaying the adoption of fibre technology. With wholesale broadband prices for copper at a discount to fibre, we now assume the fibre penetration rate will remain flat from fiscal 2015 to fiscal 2018. While equity shareholders may find a convertible preference share more palatable, the government may balk at injecting additional capital into Chorus. Our fair value estimate also factors in a fiscal 2014 equity raise of NZD 400 million at NZD 1.00 per share, a 30% discount to its current share price. We don’t expect Chorus to pay a dividend in the near term, and we think its shares are fairly valued.

We also downgrade Chorus' economic moat rating to none from narrow. While Chorus' monopoly infrastructure assets are difficult to replicate, we believe an adverse regulatory regime and long-term regulatory uncertainty will preclude Chorus from earning excess returns on its cost of capital for the foreseeable future."

What more can you say? "...we believe an adverse regulatory regime and long-term regulatory uncertainty will preclude Chorus from earning excess returns on its cost of capital for the foreseeable future." No wonder overseas investors are seen to be pulling out of the NZ market.

[bull....]

no more divs and maybe a cap raising to dilute everyone who doesnt participate

[BlackCross]

And just in:

Update on independent assessment of Chorus’ financial
position
Communications and Information Technology Minister Amy Adams says the Government
has today received a verbal briefing from Ernst & Young Australia on its high level findings
on whether Chorus can deliver on its broadband contracts.
The Ministry of Business, Innovation and Employment commissioned Ernst & Young
Australia to investigate Chorus’ capability to deliver on its Ultra-fast Broadband (UFB) and
Rural Broadband Initiative (RBI) contractual commitments with the Government, in light of
the Commerce Commission’s decisions on final wholesale prices for copper-based broadband
services.
“The preliminary conclusion from Ernst & Young is that copper price changes will have a
significant impact on Chorus’ financial position and that absent further action, Chorus is at
risk of not meeting its UFB and RBI contractual commitments, after taking into account a
wide range of actions Chorus can take itself,” Ms Adams says.
“While the quantum of the shortfall is still being finalised and will be outlined in its final
report, Ernst & Young has indicated it is unlikely to alter the high-level findings, and that the
Government can act with confidence on the information Ernst & Young has supplied.
“As a result of this information, and because the Government remains strongly committed to
the UFB roll-out, the Government expects that the next step will be for Chorus to approach
Crown Fibre Holdings (CFH) to discuss specific provisions within the UFB contract.
“The Government supports CFH entering into discussions with Chorus to help manage this
issue.
“The Government’s UFB initiative has a budget of $1.35 billion and CFH is required to act
within this fiscal envelope.
“The Government expects Chorus to meet a significant part of the shortfall

[Harvey Specter]

I quickly cancelled my cheeky bid but the price has actually gone up.

[jamiec26]

what does everyone expect the share price to do now.. i see either a bailout on the cards (SP Up) or CNU lose some of the roll out contract? (SP down)

[couta1]

Jamiec26, Toss a coin 3 times and take the winning count would be as accurate as any method at the moment.

[Bobcat.]

what does everyone expect the share price to do now.. i see either a bailout on the cards (SP Up) or CNU lose some of the roll out contract? (SP down)

No divi if and when confirmed by the directors will mean another sharp drop but since that is half expected by the market, a rebound soon after is possible, meaning that could be the time to buy (but not now).

Government intervention via an adjustment to CNU's contractual obligations will lift the share price if it's clearly benefiting CNU, which it probably will. The time to buy could be just before the revised contract is announced.

Meanwhile, I'm staying out - better prospects elsewhere.

BC

[Harvey Specter]

what does everyone expect the share price to do now.. i see either a bailout on the cards (SP Up) or CNU lose some of the roll out contract? (SP down)
Unlikely to lose some of the roll out. The tendering will be just a wasted cost.

I'd expect no dividends and possibly a small capital raising or the govt will guarantee a portion of new debt.

[jamiec26]

Jamiec26, Toss a coin 3 times and take the winning count would be as accurate as any method at the moment.

It's painful to watch CNU. I'm still in... Trying to average down. You'd be happy to be out of it!

[couta1]

Yes Jamiec, Happy to be out but like a relationship breakup the pain doesn't just go away with such a large sum involved, I feel for all current holders and those who have sold out.

[Bobcat.]

Trying to average down.

Averaging down never works when the Bears are in control. It's tempting because it takes your average cost price down and so seems that you've lost less money, but that's an illusion - you've lost a smaller % of a larger amount, and if the price is still trending down, you end up losing more.

If you REALLY believe that a stock has been oversold and is starting to recover then buying in again at a lower price can work. For example, I bought a second parcel of CHN.asx yesterday because it has a cash position per share much higher than the market price. But generally, I avoid averaging down - it gives a false security that somehow you've stopped the rot when in fact you have only thrown more of your good money into a what has turned out to be a bad investment.

Buy instead on the upward. Picking bottoms is a grubby business and averaging down can be a nightmare in the making.

BC

[silu]

I usually only average down in an upward trend.

[couta1]

Wise advice Bobcat, learnt my lesson here on CNU,Dil and Ttk

[Bobcat.]

Wise advice Bobcat, learnt my lesson here on CNU,Dil and Ttk

Don't feel so bad mate if it only took three bad experiences to learn not to average down. Some of us (including c'est moi) were slower learners. In years gone by, I've lost more averaging down than I have gained from buying more on the way up.

It's reverse psychology at play. Unfortunately, it is psychologically easier to buy at a price cheaper than yesterday than it is to buy at a price higher than yesterday...and yet that is how to minimise losses and maximise gains in this business.

Mastering our own temptations and other psychological baggage is half the battle in this game...which is why it's a great mechanism for getting to "know thyself "(Socrates)

BC

[JAYAY]

http://www.nzherald.co.nz/politics/news/article.cfm?c_id=280&objectid=11167143

Vodaphone and Sue Chetwyn eh! Aint Sue just a work of art. Who is she really working for. Not the consumers.

[JayRiggs]

I think the minister's statement was good news. It confirms Chorus actually will be financially impacted with this new copper price and Chorus weren't making stuff up.
Surely steps will be taken to resolve this for Chorus and us shareholders. May take a while, but I'm comfortable holding and waiting while this all plays out in the media.

disc: Holding at avg price of $2.50
Tempting to average down if it reaches $1!

[couta1]

Jayriggs, How many are you holding at $2.50 ? I wish others on this forum would state how many they are holding and not just there purchase or sell price as this can give others sitting on large numbers like I was false impressions when if fact most are only holding very small holdings so outcomes of sell or buy have very different impacts

[couta1]

Alas I think my time on this forum might be coming to an end, had a couple of posters put the boot in on my reputation page (also some good reputation comments) surely posters should have the guts to post criticisms openly so I know who you are (Thankyou to those that have) maybe my open and honest style is not appropriate for this forum and posters with hidden motives and agendas are preferred ?

[clip]

There's a reputation page? How does one get there?

[JayRiggs]

Jayriggs, How many are you holding at $2.50 ? I wish others on this forum would state how many they are holding and not just there purchase or sell price as this can give others sitting on large numbers like I was false impressions when if fact most are only holding very small holdings so outcomes of sell or buy have very different impacts

I hold about 8000. Just a small player here.

[couta1]

Jayriggs,Thanks for your honesty, yes I would also still be holding if I held that amount.

[JayRiggs]

Alas I think my time on this forum might be coming to an end, had a couple of posters put the boot in on my reputation page (also some good reputation comments) surely posters should have the guts to post criticisms openly so I know who you are (Thankyou to those that have) maybe my open and honest style is not appropriate for this forum and posters with hidden motives and agendas are preferred ?

Well I hope you don't leave couta. I've enjoyed your posts.
Dunno why people would be giving you negative reputation?

[BIRMANBOY]

Click on Settings tab at top right of page after you log in...next to my profile...to give reputation click on star at bottom left of applicable post. You can add a comment or not.
There's a reputation page? How does one get there?

[BIRMANBOY]

Like everything in life Couta, there is good and bad and there are unfortunately more people than would be considered desirable, who enjoy making others uncomfortable either because they are ignorant or insensitive or have some anger or grief they are trying to pass on. My old man used to say never talk politics or religion at the dinner table because it was bound to bring out strong opinions. In any case don't let others opinions push you out....they could be complete ar******s or maybe there is some validity...doesn't matter. We note, dismiss and move forward. Its all a big learning curve and where we are is merely transitory.
Alas I think my time on this forum might be coming to an end, had a couple of posters put the boot in on my reputation page (also some good reputation comments) surely posters should have the guts to post criticisms openly so I know who you are (Thankyou to those that have) maybe my open and honest style is not appropriate for this forum and posters with hidden motives and agendas are preferred ?

[Joshuatree]

You can remove stars or what? Like Hotcopper plus or minus? ………. Im going back to watch breaking bad series 3.

[Snow Leopard]

Alas I think my time on this forum might be coming to an end, had a couple of posters put the boot in on my reputation page (also some good reputation comments) surely posters should have the guts to post criticisms openly so I know who you are (Thankyou to those that have) maybe my open and honest style is not appropriate for this forum and posters with hidden motives and agendas are preferred ?

Ignore them, couta1. Do not lot the ******** get you down.

Everyone here is entitled to express their own opinions provided that they play by the rules.
If you have had particularly vitriolic reputation posts report it to the site admin.

Best Wishes
Paper Tiger

[couta1]

Thanks PaperTiger and others who have just given me some positive reputation credits, I guess some are angry that an overly enthusiastic older fool with a good sum of money could dare to make such silly mistakes like I did with CNU when they would have done so much better if they were in my situation

[Mista_Trix]

Hehe, shouldn't that be sum in capitals ;)

[Bobcat.]

...positive reputation credits...

I've tried to find on this web site the list of reputation credits/debits and comments against my posts, without success. Does anybody know where these are tallied and displayed?

[couta1]

Hehe, shouldn't that be sum in capitals ;)
Dead right Mista Trix

[Stu]

Alas I think my time on this forum might be coming to an end, had a couple of posters put the boot in on my reputation page (also some good reputation comments) surely posters should have the guts to post criticisms openly so I know who you are (Thankyou to those that have) maybe my open and honest style is not appropriate for this forum and posters with hidden motives and agendas are preferred ?

Going for this year's Irony Man Title?

[couta1]

I've tried to find on this web site the list of reputation credits/debits and comments against my posts, without success. Does anybody know where these are tallied and displayed?
Just click on settings TAB above my messages box to displaydisplay

[Joshuatree]

Ok I've found I've got 51 points ,1 little red rectangle from snapiti (when we had the ramping stoush) and reputation 4 ; Bizarre stuff . So people can complement each other and build up stars (like on trade me). Designed to self regulate (i hope). just don't knowif its a good or bad thing , feels sneaky ; underhand. I mean why not PM anyone if you need to?

[Wolf]

Just click on settings TAB above my messages box to displaydisplay

Wheres the my messages box? Is it possible to see the reputations given to someone?

What have they being saying Couta? Don't leave. I think it's terrible that you've been copping criticism because of your honesty especially while your already down.

[Bobcat.]

What have they being saying Couta? Don't leave. I think it's terrible that you've been copping criticism because of your honesty especially while your already down.

All we need to do to turn this around is go back to Couta's posts that we like, click on the star under his name and post a favourable rep.

[Wolf]

All we need to do to turn this around is go back to Couta's posts that we like, click on the star under his name and post a favourable rep.
Sounds good, glad to know about this reputation button now.

[Stu]

So Couta is leaving because of some hidden star system that no one has heard of or cares about? Yeah right. This latest weepy outburst makes me a little suspicious.
Opens an account on the first leg down of Chorus claiming to have lost the very round number of 100,000 (10,000 dollars too insignificant, 1,000,000 dollars too Dr Evil). Explains he had to sell because he was too busy and didn't have the time to worry about it, then proceeds to post with great regularity at all times of the working day and night. Then explains he has to leave with Chorus approaching its low because, er, he's being bullied in a manner where access to view has to be elaborately explained to everyone.

[nextbigthing]

Ok I've found I've got 51 points ,1 little red rectangle from snapiti (when we had the ramping stoush) and reputation 4 ; Bizarre stuff . So people can complement each other and build up stars (like on trade me). Designed to self regulate (i hope). just don't knowif its a good or bad thing , feels sneaky ; underhand. I mean why not PM anyone if you need to?

Can you see who the points are from? How do you know it's Snapiti or are you guessing? I can't see who mine are from?

[Bobcat.]

So Couta is leaving because of some hidden star system that no one has heard of or cares about? Yeah right. This latest weepy outburst makes me a little suspicious.
Opens an account on the first leg down of Chorus claiming to have lost the very round number of 100,000 (10,000 dollars too insignificant, 1,000,000 dollars too Dr Evil). Explains he had to sell because he was too busy and didn't have the time to worry about it, then proceeds to post with great regularity at all times of the working day and night. Then explains he has to leave with Chorus approaching its low because, er, he's being bullied in a manner where access to view has to be elaborately explained to everyone.

Couta - make an honest and dignified response to this challenge, would you thnx.

[Snow Leopard]

Couta - make an honest and dignified response to this challenge, would you thnx.

Better still, ignore him.

Best Wishes
Paper Tiger

[winner69]

All we need to do to turn this around is go back to Couta's posts that we like, click on the star under his name and post a favourable rep.

Good to know you can't mass reputate anybody .... one needs to spreads one reputation around it says

Anyway coutla one more point coming you way

[BIRMANBOY]

Vince says that if you slip him a $100 and case of Steinlager he'll tell you who they are from.......just kidding of course..PS (the case is on the courier Vince)
Good to know you can't mass reputate anybody .... one needs to spreads one reputation around it says

Anyway coutla one more point coming you way

[Mista_Trix]

Couta - make an honest and dignified response to this challenge, would you thnx.

Iiiinteresting call, I've been on here for the last 6 months and had no idea about that function, not that I was looking for it mind you.

Interesting challenge.

[couta1]

So Couta is leaving because of some hidden star system that no one has heard of or cares about? Yeah right. This latest weepy outburst makes me a little suspicious.
Opens an account on the first leg down of Chorus claiming to have lost the very round number of 100,000 (10,000 dollars too insignificant, 1,000,000 dollars too Dr Evil). Explains he had to sell because he was too busy and didn't have the time to worry about it, then proceeds to post with great regularity at all times of the working day and night. Then explains he has to leave with Chorus approaching its low because, er, he's being bullied in a manner where access to view has to be elaborately explained to everyone.
Your facts are incorrect, actual loss was $98869 to be exact close enough to 100k wouldn't you say with brokerage chucked in ,selling was a very tough decision, what's too busy got to do with it I never said that was my reason for selling, my work hours vary and I get to choose my own hours to a certain extent, so able to post when I like plus I'm always a bit over enthusiastic with new things, no weepy outburst I just don't like people who can't openly disagree and have to stick the boot in behind the scenes when your trying to recover from your loss and its not a hidden star system it's part of your message page

[BIRMANBOY]

In the immortal words of the proverbial "she'll be right mate", theres still some hope.
http://www.abersochlife.com/wp-content/uploads/2012/11/Sinking-boat-by-Paul-Collins.png (http://www.google.co.nz/url?sa=i&rct=j&q=&esrc=s&frm=1&source=images&cd=&cad=rja&docid=P_UgJ_RP5ZgPBM&tbnid=iufvTmNdJXoijM:&ved=0CAUQjRw&url=http%3A%2F%2Fwww.abersochlife.com%2Ffaf-with-a-difference%2F&ei=k-yfUof1BueYiAeDtYHQDw&bvm=bv.57155469,d.cGE&psig=AFQjCNGHWehB8PyMUiQDywABhOVDbmtuFw&ust=1386298477207723)

[spmcg]

I'm sitting on only a little over 2k shares at a little over 2.50.

[JAYAY]

by Simon Botherway 2 hours ago EY's findings are unsurprising. Anyone who understands network economics could have reached that conclusion in short order (no criticism of EY implied). It is disappointing that the range of potential political responses canvassed in this article address a narrow range of symptoms. Certainly incompetence has played a part (& no excuse should be offered for that) but the main problem is a convoluted, disjointed, poorly defined & designed, subjective regulatory regime which promises nothing but uncertainty & which is entirely at odds with the relatively clearly defined objectives (& associated benefits) of a UFB rollout. A holistic response is required.

[clip]

^well said by Simon, where was that from? I especially like the last sentence or two

[JAYAY]

^well said by Simon, where was that from? I especially like the last sentence or two

Yes I liked it too. Simon is a guy who knows what he is talking about. It's from NBR.

[Stu]

Your facts are incorrect, actual loss was $98869 to be exact close enough to 100k wouldn't you say with brokerage chucked in ,selling was a very tough decision, what's too busy got to do with it I never said that was my reason for selling, my work hours vary and I get to choose my own hours to a certain extent, so able to post when I like plus I'm always a bit over enthusiastic with new things, no weepy outburst I just don't like people who can't openly disagree and have to stick the boot in behind the scenes when your trying to recover from your loss and its not a hidden star system it's part of your message page

I'm guessing you are bona fide, because a grown man getting upset over 2 Facebooky disLikes? You couldn't make that up. Now that you've brought this important site feature to our attention feel free to post all the frowny faces and angry emoticons on my notifications thing, I suppose people will only read posts that have a high smiley face rating, just like they only buy bottles of wine with lots of gold medal stickers plastered all over them.
For someone who apparently has a million dollar portfolio and has been trading for a while, the whole sympathy for your loss thing is getting a little old too. From memory this 10 percent portfolio loss stems from a gamble of buying into the dividend and hoping it wouldn't correct ex dividend? So about what the average portfolio would have made in the last year or two conservatively speaking?

[warthog]

Paper Tiger was right: could everyone let couta1 depart without a further increase in the noise to signal ratio here?

The hog is sure nobody here actually takes pleasure in other traders losing money.

So the hog's suggestion is let's just move on.

[Snow Leopard]

Paper Tiger was right: could everyone let couta1 depart without a further increase in the noise to signal ratio here?

The hog is sure nobody here actually takes pleasure in other traders losing money.

So the hog's suggestion is let's just move on.

The problem with continuing conversations entwined amongst other conversations on a linear thread such as ShareTrader is that sometimes the context as read from a certain point is not the context as totally written so to clarify.

The quote that the warthog quotes is in relation to a quote related to something I wrote which may have been quoted, or not.

Anyway the gist of what I was saying is not the gist of the quote above that the warthog suggests that couta1 should quietly disappear.

What I was actually saying is that couta1 should ignore the post from Stu the Forum Troll, which couta1 choose to quote and reply to thus ignoring the ignore suggestion.

So everything is now clear?

Chorus gone bust yet?

Best Wishes
Paper Tiger

[warthog]

The problem with continuing conversations entwined amongst other conversations on a linear thread such as ShareTrader is that sometimes the context as read from a certain point is not the context as totally written so to clarify.

The quote that the warthog quotes is in relation to a quote related to something I wrote which may have been quoted, or not.

Anyway the gist of what I was saying is not the gist of the quote above that the warthog suggests that couta1 should quietly disappear.

What I was actually saying is that couta1 should ignore the post from Stu the Forum Troll, which couta1 choose to quote and reply to thus ignoring the ignore suggestion.

So everything is now clear?

Chorus gone bust yet?

Best Wishes
Paper Tiger

The hog stands corrected, but let's move on anyway.

[couta1]

Yes let's all move on ,thanks to all those that showed personal support(You all know who you are)the only reason I replied to Stus post is because I hate misquoted facts and people questioning someone else's integrity with no proven facts and no I won't be posting any nasties on your page Stu that's not my style, am not going to disappear completely as it seems there are quite a few that have enjoyed my posts and I have also learnt a lot from many of you after all we are all on this journey together at the end of the day so lets be happy for others when they succeed and show support to those that suffer loss as I'm sure we will all find ourselves in each of those situations along this journey,cheers

[janner]

Yes let's all move on ,thanks to all those that showed personal support(You all know who you are)the only reason I replied to Stus post is because I hate misquoted facts and people questioning someone else's integrity with no proven facts and no I won't be posting any nasties on your page Stu that's not my style, am not going to disappear completely as it seems there are quite a few that have enjoyed my posts and I have also learnt a lot from many of you after all we are all on this journey together at the end of the day so lets be happy for others when they succeed and show support to those that suffer loss as I'm sure we will all find ourselves in each of those situations along this journey,cheers


Amen !!............

[JAYAY]

http://www.whaleoil.co.nz/2013/12/matthew-hooton-duped-kiwi-households-hundreds-millions-dollars/

Have a look at this.

[Harvey Specter]

http://www.whaleoil.co.nz/2013/12/matthew-hooton-duped-kiwi-households-hundreds-millions-dollars/

Have a look at this.For a supposed right wing blogger, he doesn't pull any punches. Love the bit about David Farrar being a travel blogger.

All what he says is true though. So much lies, politics, corporate sabotage etc going on, it would be fantasic if I wasn't caught in the middle of it.

Plus I hope the roll out of Fibre to my area isn't delayed - should be in by mid 2014 - yay

[jamiec26]

http://www.whaleoil.co.nz/2013/12/matthew-hooton-duped-kiwi-households-hundreds-millions-dollars/

Have a look at this.

Now that grinds my gears!

[nextbigthing]

The comments made by John Key quoted in the Herald are seemingly a lot more positive for CNU.

I like the last bit of the Whaleoil blog, more to be revealed!

[Hoop]

I consider Fibre to be the next major advancement in this ongoing Industrial (technological) Revolution...It has to be up there with Electrical power line rollouts, copper wire rollouts for phones connected to manual exchanges (remember the party lines)..air waves (transmitters.cell towers) ...unfortunately I remember all these occasions :p and thinking back it it drew the same infighting between the futurist (exponential) thinkers v the conventional (linear) thinkers with their why change so quickly and upset the status quo arguments...people out there with invested interests either-way ..the wacko's...the scaremongers...the denial people that see any change as bad...together with the masses who tried to make sense of where all this was going to go in the future.

Technological lifestyles changes usually happen suddenly often within a generation time frame..with each Technological rollout comes inventions we never could imagine at the time e.g electricity was thought of mainly for lighting to replace the candle/lamps... Fibre atm is mainly thought of communication and replacement for copper lines..

What does all this have to do with Chorus???...Any monopoly that has no or limited foresight or competitive need to change ( invest money into an "unknown" area)..won't do so...It will fail to adapt fast enough and will eventually fade out...

Below is some humorous quotes by famous people who applied their "now" thinking to their future outlook...Note these quotes are less than 150 years old...ENJOY:)

[W]hen the Paris Exhibition closes electric light will close with it and no more be heard of.
- Erasmus Wilson (1878) Professor at Oxford University

They will never try to steal the phonograph because it has no `commercial value.' - Thomas Edison (1847-1931). (He later revised that opinion.)

This `telephone' has too many shortcomings to be seriously considered as a practical form of communication. The device is inherently of no value to us. - Western Union internal memo, 1878

What use could this company make of an electrical toy? - Western Union president William Orton, responding to an offer from Alexander Graham Bell to sell his telephone company to Western Union for $100,000.

Well informed people know it is impossible to transmit the voice over wires and that were it possible to do so, the thing would be of no practical value. - Editorial in the Boston Post (1865)

Radio has no future. - Lord Kelvin (1824-1907), British mathematician and physicist, ca. 1897.

While theoretically and technically television may be feasible, commercially and financially I consider it an impossibility, a development of which we need waste little time dreaming. - Lee DeForest, 1926 (American radio pioneer and inventor of the vacuum tube.)

[Television] won't be able to hold on to any market it captures after the first six months. People will soon get tired of staring at a plywood box every night. - Darryl F. Zanuck, head of 20th Century-Fox, 1946.

[brucey09]

Snrs.
Spanish saying "no te argumentar desquitarse" , english no argue get even.
The comcom nz
Dr Stephen Gale
contact@comcom.govt.nz
Muchos email . Yes?

[Poet]

That whaleoil blog is interesting Jayay, good to see the truth finally getting some exposure - I wonder if mainstream media will pick it up.

The other lie (spin) that is out there is that the price differential between copper and fibre won't make a difference in uptake of fibre because consumer will be happy to pay extra for the extra speed services etc that fibre will offer.

The reality is that it is the retailers that are purchasing the fibre and/or copper from Chorus and then on-selling to consumer. You can bet if there is a significantly greater profit margin to be gained for the retailer by retailing services over copper rather than fibre then the retailer won't be in any rush to upgrade their consumers to fibre.

[Merc]

... (remember the party lines)..

Oh yes. 32 years ago we left civilization to live in a run down garage on 10 acres in the hills - and were introduced to the party line.

3 digit phone number to dial the locals, had to insert 09 in front of all Auckland calls - although calls were free.

5 households on the party line so to make a call - pick it up, hear voices, wait 5 minutes, try again.
By the time we had a free line it was odds on the local exchange was overloaded and we had to wait for that too.
Last straw would be FINALLY getting a free line, free line on the exchange - then getting the engaged signal from the person you were ringing.

A year or two later the upgrade happened and we had our own line.

As a child my English mother would book a three minute call to "phone home" on Christmas Day. The cost? 5 pounds - equivalent to a week's housekeeping money.

My father's grandfather communicated with his parents in the UK by letter on sailing ships.

Now? Phone, fax, wireless router, (slowish) broadband, mobile phones, data card when on the move... A couple of years back I spent an hour on Skype with my daughter who was in the UK for a year. She gave us a walk through video tour of her new flat. Cost? Just my monthly internet charge.

The future? Things we haven't yet thought about but we'll need the bandwidth and speed of fibre to do it

[macduffy]

The future? Things we haven't yet thought about but we'll need the bandwidth and speed of fibre to do it

Unless, of course, someone discovers another technology that we havn't yet thought about!

;)

[Harvey Specter]

Is there anything that requires CNU to offer anything but voice over copper?

[warthog]

Is there anything that requires CNU to offer anything but voice over copper?

Even less than that. They are just a pipe. Other, smarter, more nimble businesses will cut their lunch and eat it.

CNU will be kept alive for all parties' interests. Just like a host is kept alive so parasites can continue to exist, CNU shareholders will be granted a relatively modest return after their initial capital losses for getting into this mess in the first place.

Does anyone know how many CNU shares are held by the NZ politicians' super fund? That is the only wildcard in this affair.

[Bobcat.]

Does anyone know how many CNU shares are held by the NZ politicians' super fund? That is the only wildcard in this affair.

37m a year ago (after they replaced IFT with CNU)
http://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=10777996

[macduffy]

USA substantial security holder reducing its stake. No surprises there.

http://news.theage.com.au/breaking-news-business/bank-of-new-york-mellon-trims-chorus-stake-20131206-2yurz.html

[Balance]

USA substantial security holder reducing its stake. No surprises there.

http://news.theage.com.au/breaking-news-business/bank-of-new-york-mellon-trims-chorus-stake-20131206-2yurz.html

All the way down to $1.00, I would say when they are trying to unload the other 6.3% of Chorus.

Frightful!

[biker]

Well, it's all pretty negative news on CNU at the moment and even more negative sentiment. I think there may be a bounce not far away and I'm buying at 1.32. They may well go lower but the market is so sour on this stock, I think the prospect is now more on the upside. The risk/ reward equation is rapidly changing IMO.

Disc. Now hold quite a few so I'm biased

[couta1]

i didnt do my due diligence and just saw $$$ signs in it. Blame shift! Blame shift!

http://i.stuff.co.nz/business/industries/9485537/NZ-branded-as-risky-as-Pakistan
I'm feeling vindicated, these guys now writing the same things I wrote on this forum weeks ago, by the way there's some very cool people on this forum I'm feeling very humbled by the personal messages and reputation support I've had, Thankyou all

[Deeppacket]

All the way down to $1.00, I would say when they are trying to unload the other 6.3% of Chorus.

Frightful!


Once it hits $1.00 I am in :)

[Balance]

Well, it's all pretty negative news on CNU at the moment and even more negative sentiment. I think there may be a bounce not far away and I'm buying at 1.32. They may well go lower but the market is so sour on this stock, I think the prospect is now more on the upside. The risk/ reward equation is rapidly changing IMO.

Disc. Now hold quite a few so I'm biased

Don't like trying to catch a falling knife with double edges!

Almost inevitable dividends will be stopped for a few years and government will pump in money to dilute existing shareholders.

[GR8DAY]

......just put my double-digit buy order in for 50,000 at 99c. ( should get them next week at this rate)

[clip]

I'm feeling vindicated, these guys now writing the same things I wrote on this forum weeks ago, by the way there's some very cool people on this forum I'm feeling very humbled by the personal messages and reputation support I've had, Thankyou all

I'd forget about reputation couta, i think you're the only one who pays any attention to it (that and the other person who keeps giving you a bad rep apparently)

[Balance]

......just put my double-digit buy order in for 50,000 at 99c. ( should get them next week at this rate)

I am in for some at $1.01.

:D

[couta1]

I'd forget about reputation couta, i think you're the only one who pays any attention to it (that and the other person who keeps giving you a bad rep apparently)
Not quite true, Snapiti also got some bad rap I'm more heartened by the personal messages even one from out on the ocean(Thanks Iceman)

[Bjauck]

i didnt do my due diligence and just saw $$$ signs in it. Blame shift! Blame shift!

http://i.stuff.co.nz/business/industries/9485537/NZ-branded-as-risky-as-Pakistan
Jason Pidcock, manager of the London-based $8.7 billion Newton Asian Income Fund is obviously not happy with his non-performing NZ investments. Obviously he wants to find out the cause of the non-performance. It sounds like he had treated NZ as a developed country with a reliable stable political environment. He thinks he was in error to do so.

Perhaps we are seeing the cost of the adoption of MMP. Minor parties with little electorate support have been able to exert considerable influence on the the Key Government. In other words just about all the promises and policies that the Key administration make cannot be relied on, as the minor parties can pull their support at any time.

[Harvey Specter]

USA substantial security holder reducing its stake. No surprises there.

http://news.theage.com.au/breaking-news-business/bank-of-new-york-mellon-trims-chorus-stake-20131206-2yurz.htmlThese guys must be hurting. They are the ones that pushed the price of MEL upto 1.11 as they acquired their 10% stake.

[Bobcat.]

Looking at the charts, there has been two substantial downward waves (268-180c and 190-140c), and we are now on its third (150-?). Elliott wave theory would suggest a buying opportunity at the bottom of this current wave.

1st wave dropped the sp 90c, 2nd wave 50c, this wave 20-30c? On this basis, I'm looking for the downward momentum to wane and/or for a downward spike. I have a cheeky bid that I'm moving down each day at 7% ahead of the market - currently @121c.

Yep, that's my strategy and I'm sticking to it.

BC

A mild earthquake (4.8) has just struck - again around Seddon. Must be the old fella again turning in his grave at what he sees from above going on here below, politically.

[vorno]

Latest update: https://www.nzx.com/files/attachments/186535.pdf

EDIT: How much (as a percentage) would Chorus lose in terms of profits from this action going ahead? Does the potential loss of profit evenly match the drop in the share price?

[blackcap]

These guys must be hurting. They are the ones that pushed the price of MEL upto 1.11 as they acquired their 10% stake.

Just wait till they dump their MELCA stake :)

[silu]

Just wait till they dump their MELCA stake :)

Sometime in 2015/2016 perhaps?

[macduffy]

These guys must be hurting. They are the ones that pushed the price of MEL upto 1.11 as they acquired their 10% stake.

Bank of NY Mellon are a large custodian/nominee holder for an unknown number of beneficial owners. We don't know how many of them are or have been selling although the odds are that it aint over yet!

[sideline]

Just wait till they dump their MELCA stake :)


BNY Mellon is NOT the ultimate beneficial holder of the Chorus shares. They issue the Chorus ADR (Symbol: CHRYY), which enables trading in Chorus on the US markets. They hold the CNU shares as backing for the CHRYY they have issued (ratio 5 CNU to 1 CHRYY).
So the reduction in their holding means that quite a few holders of those ADRs (probably mostly US fund managers diversifying internationally into 'safe' utilities in 'safe' jurisdictions) have sold their CHRYY causing BNY Mellon to cancel those ADRs and selling the CNUs no longer required.
I doubt BNY Mellon makes any investment decisions here, they are mainly arbitrating and collecting fees for providing the service.

I would think their holding in MELCA will be for a similar arrangement, though I could not find a Meridian ADR.

[warthog]

or wait till they are going to pay a dividend ... then sell again ....

The hog bets their bank(s) will be lining up before shareholders.

[J R Ewing]

Jason Pidcock, manager of the London-based $8.7 billion Newton Asian Income Fund is obviously not happy with his non-performing NZ investments. Obviously he wants to find out the cause of the non-performance. It sounds like he had treated NZ as a developed country with a reliable stable political environment. He thinks he was in error to do so.

Perhaps we are seeing the cost of the adoption of MMP. Minor parties with little electorate support have been able to exert considerable influence on the the Key Government. In other words just about all the promises and policies that the Key administration make cannot be relied on, as the minor parties can pull their support at any time.

I was thinking the same thing Bjauck. In this MMP environment it is going to be very difficult to push through sensible legislation if the need for it can't be easily explained in a tweet or a 15 second news interview. In contrast it is all too easy to take political advantage with w glib comment that appeals to envy. Like "Chorus just paid out HOW MUCH MONEY as a dividend to those rich B****rds!! Time we stood up for the needy and gave them cheaper phone bills" You can't de-bunk that within the attention span of the target audience unfortunately.

[Bobcat.]

The 5m trade at 4pm at a price of 130c may be significant - pivots normally occur with large trading volume. Today we are going to top Tuesday's 7m daily volume.

Monday, I'll be buying if it has a higher low than today's 127.

BC

[Stu]

http://www.whaleoil.co.nz/2013/12/matthew-hooton-duped-kiwi-households-hundreds-millions-dollars/

Have a look at this.

Wow, suggests NZers are a bunch of simple minded and gullible yokels who believe anything in typeface form (and handwritten notes from a smartly dressed and fine upstanding Vodafone chaps and their pals). Hard to believe any underhandedness is going on, not from a nation that penned the inspirational and uplifting text that was the latest Hannover Finance prospectus.
http://www.youtube.com/watch?v=SjbPi00k_ME

:)

[Merc]

Vodafone rang a short time ago to say that if we shift to a new phone/broadband plan and sign up for it for a year then we will make savings.

My reply? "I will come back to you on this. As a Chorus shareholder I am deeply unhappy that Vodafone have supported the current Chorus mess and am looking at changing companies. Please pass this on to Management"

Now off to research the alternatives...
Any suggestions? (Fibre unfortunately not being an option. Current download load speed on our ancient copper lines is about 3Mbps )

[couta1]

Vodafone rang a short time ago to say that if we shift to a new phone/broadband plan and sign up for it for a year then we will make savings.

My reply? "I will come back to you on this. As a Chorus shareholder I am deeply unhappy that Vodafone have supported the current Chorus mess and am looking at changing companies. Please pass this on to Management"

Now off to research the alternatives...
Any suggestions? (Fibre unfortunately not being an option. Current download load speed on our ancient copper lines is about 3Mbps )
We're with Vodafone will be giving them a call on Monday to change to Telecom probably and telling them as we pay around $200 a month for our services then maybe they could give us a free period say for around the next 45 years should do the trick and square off their debt to us for their part in CNU saga

[warthog]

We're with Vodafone will be giving them a call on Monday to change to Telecom probably and telling them as we pay around $200 a month for our services then maybe they could give us a free period say for around the next 45 years should do the trick and square off their debt to us for their part in CNU saga

Vodafone don't care about you.

[warthog]

Vodafone rang a short time ago to say that if we shift to a new phone/broadband plan and sign up for it for a year then we will make savings.

My reply? "I will come back to you on this. As a Chorus shareholder I am deeply unhappy that Vodafone have supported the current Chorus mess and am looking at changing companies. Please pass this on to Management"

Straight in the bin.

[couta1]

Vodafone don't care about you.
So we should all lay down like a pig in the mud and say or do nothing then?

[warthog]

In this MMP environment it is going to be very difficult to push through sensible legislation

Actually one of the huge problems in NZ politics is that there is a culture of pushing through very poorly-drafted and ill thought-through legislation.

One of MMP's clear advantages is that it often doesn't allow a party that has a plurality to push through its legislation without seeking the support of others to at least reach a majority.

Examples: current govt's policies towards asset sales (shambles), transport (building motorways soon to be as clogged as current), earthquake recovery (lack of leadership, insurance shambles, lack of vision in Christchurch), national telecom strategy (lack of, CNU fiasco), education (who could argue that Hekia Parata knows what she's doing?).

Ironically enough, National has relied on the support of the Maori party to push a lot of this through.

[warthog]

So we should all lay down like a pig in the mud and say or do nothing then?

The mud is actually quite cooling and comfortable thank you very much.

You were probably with Vodafone because of some cheap deal or other so you're probably at the thin end of the revenue curve for them.

You're just churn to them. Win majority, lose minority.

[couta1]

The mud is actually quite cooling and comfortable thank you very much.

You were probably with Vodafone because of some cheap deal or other so you're probably at the thin end of the revenue curve for them.

You're just churn to them. Win majority, lose minority.
Actually I like Warthogs they have attitude but are known to exhibit their gentle side frequently kind of a good mix really

[Merc]

Vodafone don't care about you.

Quite right. Vodafone wouldn't care about me and Couta. But if we are the thin edge of the wedge...

A few years ago we had a major issue with State insurance. Although we had been with them for years it was enough to trigger a comparison of insurance companies and a move. By moving to AMI our insurance premiums went down (and the improvement in service was amazing)

Time to see what better deals are available with the phones/internet.

[Bjauck]

One of MMP's clear advantages is that it often doesn't allow a party that has a plurality to push through its legislation without seeking the support of others to at least reach a majority.

Examples: current govt's policies towards asset sales (shambles), transport (building motorways soon to be as clogged as current), earthquake recovery (lack of leadership, insurance shambles, lack of vision in Christchurch), national telecom strategy (lack of, CNU fiasco), education (who could argue that Hekia Parata knows what she's doing?).

Ironically enough, National has relied on the support of the Maori party to push a lot of this through.
So the parties with maybe less than 5% of the votes end up being able to veto legislation and policy. Is that democracy in action or being held to ransom by fringe minority parties? The asset sales were scuppered by whom? Green/Labour policies and last minute grandstanding? Politicians threatening renationalisation with some threatening compensation only to "the deserving"? National has a telecoms policy...scuppered by an ill defined regulatory regime and minor parties whose telecoms policy consists of pork barrel politics by telling the public they are trying to get them cheaper broadband.

[warthog]

Quite right. Vodafone wouldn't care about me and Couta. But if we are the thin edge of the wedge...

A few years ago we had a major issue with State insurance. Although we had been with them for years it was enough to trigger a comparison of insurance companies and a move. By moving to AMI our insurance premiums went down (and the improvement in service was amazing)

Time to see what better deals are available with the phones/internet.

Oh don't get the hog wrong: anyone considering moving from Vodafone will benefit. The hog did this many years ago, and found the leaving experience to be top-notch. Couldn't get basic service from Vodafone for love nor money but when leaving, suddenly the service was exemplary.

[RedWizzard]

So the parties with maybe less than 5% of the votes end up being able to veto legislation and policy. Is that democracy in action or being held to ransom by fringe minority parties?.

I think it says more about the lack of a stable minor party on the right than it does about the system. This government has had it particularly tough with ACT self-destructing and Dunne getting somewhat offside. But I don't think you can blame either of those on MMP. I think Labour have generally avoided "being held to ransom" when they've been in power.

To me the asset sales have been driven by the ideology that government shouldn't be running businesses. There doesn't see to be a economic rational for it - the proceeds of the sale weren't required for anything concrete and the assets were returning more than the cost of borrowing would have been. The ideological rational is fine, but these sales don't actually achieve the goal. And rushing through 3 large sales in the same sector might not have been the best plan. So it's all been a bit ill-conceived IMHO.

This Chorus mess is really due to the scale of ComCom's cut being unexpected. A bit more foresight from both Chorus and the government could have mitigated this situation significantly.

[RedWizzard]

Vodafone don't care about you.

Vodafone don't care about anyone.

Those who think Vodafone will pass on any part of a wholesale price drop are dreaming. Let's not forget they used to charge $20 per MB for roaming data when local charges where 1/100th of that. They claimed they had no control over the foreign carrier's charges, even when that foreign carrier was Vodafone Australia. When the ComCom and the ACCC announced they'd investigate suddenly the charge dropped 90%. Vodafone know how to gouge customers and they're not afraid to do it.

[Major von Tempsky]

Hope everyone noted the crocodile tears from TUANZ and their request to meet with the Minister Amy Adams so they could facilitate the fast as possible rollout of UFB and to do anything they could to help it.
ROTFL.
They are the ones who initiated and poured petrol on this snafu and their best action would be to change sides on the copper pricing.
Presumably they are all now life members of the NZ Labour Party.

[Bjauck]

I think it says more about the lack of a stable minor party on the right than it does about the system. This government has had it particularly tough with ACT self-destructing and Dunne getting somewhat offside. But I don't think you can blame either of those on MMP. Yes definitely a contributing factor...and because of the MMP system accommodation so often has to be sought by the government with these minor parties, which can lead to the unpredictability that investors dislike.

Labour has had to compromise, whether you call it being held to ransom depends how important the "compromised" policies were to you, by needing to work with the Greens. That is the name of the game under our MMP system. Compared with our old FPP system, more power is given to the parties that have less support in the electorate.

As for the specific privatisations...I don't have the knowledge to comment if they were ill-conceived.

[macduffy]

Quite right. Vodafone wouldn't care about me and Couta. But if we are the thin edge of the wedge...

A few years ago we had a major issue with State insurance. Although we had been with them for years it was enough to trigger a comparison of insurance companies and a move. By moving to AMI our insurance premiums went down (and the improvement in service was amazing)

Time to see what better deals are available with the phones/internet.

The irony in that, of course, is that both State and AMI are now subsidiaries of the big Aussie, IAG. It will be interesting to see if differences in premiums and service persist in the future.

[Merc]

The irony in that, of course, is that both State and AMI are now subsidiaries of the big Aussie, IAG. It will be interesting to see if differences in premiums and service persist in the future.

10 years ago you only had to mention "State Insurance" to anyone who had ever had a claim with them and steam would come out of ears as they launched into a tirade about their own claim. The Serious Crash Unit made the comment that "All insurance companies can be hard to deal with but State are by far the worst."

My local panel beater told me a year ago that things have changed and State is now one of the better ones. But they still won't get my business.

Back to Chorus.
Interesting that the providers are declaring that Chorus is the sole reason that internet prices are so high. Yet Vodafone rang me yesterday to say that if I switched to a new plan (with the same features as now) I'd save $23.87 per month.

Checking out the other providers showed their prices are in the same lower ballpark.

[biker]

The 5m trade at 4pm at a price of 130c may be significant - pivots normally occur with large trading volume. Today we are going to top Tuesday's 7m daily volume.

Monday, I'll be buying if it has a higher low than today's 127.
BC

I like your thinking Bobcat

[biker]

Vodafone rang a short time ago to say that if we shift to a new phone/broadband plan and sign up for it for a year then we will make savings.

My reply? "I will come back to you on this. As a Chorus shareholder I am deeply unhappy that Vodafone have supported the current Chorus mess and am looking at changing companies. Please pass this on to Management"

Now off to research the alternatives...
Any suggestions? (Fibre unfortunately not being an option. Current download load speed on our ancient copper lines is about 3Mbps )

I share your sentiments Merc.

I use Flip for broadband, home phone and free NZ toll calls and 2 degrees for mobile phone and data.
I get all the home and mobile, phone and data that I need for $94 a month. No contracts,no lock on and no terms. It was the cheapest most convenient set up I could find, unless you need huge amounts of data. I use an iPad with 3G, iPhone, home phone and Mac book.

[noodles]

We're with Vodafone will be giving them a call on Monday to change to Telecom probably and telling them as we pay around $200 a month for our services then maybe they could give us a free period say for around the next 45 years should do the trick and square off their debt to us for their part in CNU saga

Couta, I get it that you are hurting with your loss. However, I don't think you should apply a great deal of blame to Vodafone. I think it is Chorus management who took a optimistic approach to their regulatory risk by loading up on debt and paying large dividends.

I take full responsibility for any losses I incur.

[ari]

Largest telecommunications infrastructure company, bit like NZ Rail on which alot of people made a killing......watching very closely.

[couta1]

Couta, I get it that you are hurting with your loss. However, I don't think you should apply a great deal of blame to Vodafone. I think it is Chorus management who took a optimistic approach to their regulatory risk by loading up on debt and paying large dividends.

I take full responsibility for any losses I incur. Noodles was actually more of a tongue in cheek comment and you never know we might get a cheaper deal if we give them a call if Telecom can offer a cheaper price for the same package.

[Merc]

... However, I don't think you should apply a great deal of blame to Vodafone. I think it is Chorus management who took a optimistic approach to their regulatory risk by loading up on debt and paying large dividends.
...
.

I think you are missing the point here.

In 2011 Telecom split into two - Telecom and Chorus - with the intention that Chorus would tender for the fibre rollout. At that time the bean counters worked out a presumably fair value for Chorus knowing that a review on copper prices was coming up. All those involved, including the Government, worked out an estimated figure of what was fair for a new price for copper.

Chorus then acted like any normal established business. They put in a tender for the rollout with the intention of following normal business practice in funding this new product through a combination of debt, equity and income.

Unfortunately com com are a wild card with other ideas. They separated the products into two, treated Chorus like 2 separate companies and went against common business practice by declaring that existing income should not be used to fund the new product.

On top of this all self interested parties have jumped in boots and all to back the com com decision for their own nefarious purposes:

- Labour, whose only policy to date appears to be to shout loudly "National is WRONG, down with National!"
- The Greens... <let's not go there>
- The Internet Providers who see a way to grab some extra profit
- A collection of people who want to raise their public profile
- The media who want to sell papers and are coming across very, very one sided
- The general public who sees shares as only belonging to the super rich so naturally these fat cats (us shareholders) deserve punishment

Result? The share price (value of the company) has tumbled, banks could well foreclose on Chorus loans (they will lend up to x of the value of a company. Company value halves - so do the loans), the ASX is sending out "please explain" messages and overseas investors are bailing out, querying whether NZ has dropped to 3rd world status and making plans to keep their money well away from here both now and in the future. Is this good for NZ? Somehow I doubt it.

It should also be noted that both Telecom and Chorus were listed as established companies with dividends, not as start ups in early growth stage with little or no dividends. Many elderly people would be invested in the company for income to supplement pensions.

So why pick on Vodafone? The NZ Herald on Thursday:

Vodafone on the Coalition for Fair Internet Pricing:
September 13: "We decided a few days ago that (the coalition) probably wasn't the best thing for Vodafone at this stage.''
Yesterday: Did you give financial support to the coalition?: "Yes we did ... I think we've been reasonably open about that.''

[couta1]

Looking at the charts, there has been two substantial downward waves (268-180c and 190-140c), and we are now on its third (150-?). Elliott wave theory would suggest a buying opportunity at the bottom of this current wave.

1st wave dropped the sp 90c, 2nd wave 50c, this wave 20-30c? On this basis, I'm looking for the downward momentum to wane and/or for a downward spike. I have a cheeky bid that I'm moving down each day at 7% ahead of the market - currently @121c.

Yep, that's my strategy and I'm sticking to it.

BC

A mild earthquake (4.8) has just struck - again around Seddon. Must be the old fella again turning in his grave at what he sees from above going on here below, politically.
Bobcat, I'm just wondering if it wouldn't be wise for those that want to jump back in to wait and see what the future dividend policy might be? Unless you want to trade the stock of cause

[Merc]

I share your sentiments Merc.

I use Flip for broadband, home phone and free NZ toll calls and 2 degrees for mobile phone and data.
I get all the home and mobile, phone and data that I need for $94 a month. No contracts,no lock on and no terms. It was the cheapest most convenient set up I could find, unless you need huge amounts of data. I use an iPad with 3G, iPhone, home phone and Mac book.

Thank you. Checked Flip out and it is cheaper with the advantage of carry over - but it isn't available in our area :(

[fish]

I think you are missing the point here.

In 2011 Telecom split into two - Telecom and Chorus - with the intention that Chorus would tender for the fibre rollout. At that time the bean counters worked out a presumably fair value for Chorus knowing that a review on copper prices was coming up. All those involved, including the Government, worked out an estimated figure of what was fair for a new price for copper.

Chorus then acted like any normal established business. They put in a tender for the rollout with the intention of following normal business practice in funding this new product through a combination of debt, equity and income.

Unfortunately com com are a wild card with other ideas. They separated the products into two, treated Chorus like 2 separate companies and went against common business practice by declaring that existing income should not be used to fund the new product.

On top of this all self interested parties have jumped in boots and all to back the com com decision for their own nefarious purposes:

- Labour, whose only policy to date appears to be to shout loudly "National is WRONG, down with National!"
- The Greens... <let's not go there>
- The Internet Providers who see a way to grab some extra profit
- A collection of people who want to raise their public profile
- The media who want to sell papers and are coming across very, very one sided
- The general public who sees shares as only belonging to the super rich so naturally these fat cats (us shareholders) deserve punishment

Result? The share price (value of the company) has tumbled, banks could well foreclose on Chorus loans (they will lend up to x of the value of a company. Company value halves - so do the loans), the ASX is sending out "please explain" messages and overseas investors are bailing out, querying whether NZ has dropped to 3rd world status and making plans to keep their money well away from here both now and in the future. Is this good for NZ? Somehow I doubt it.

It should also be noted that both Telecom and Chorus were listed as established companies with dividends, not as start ups in early growth stage with little or no dividends. Many elderly people would be invested in the company for income to supplement pensions.

So why pick on Vodafone? The NZ Herald on Thursday:

Excellent post merc.
Its not easy remaining calm and rational when you look at the com com decision-its fairness and the implications for the future.
Chorus is so right taking them to court where I think they will be shown to be lacking

[noodles]

Chorus then acted like any normal established business. They put in a tender for the rollout with the intention of following normal business practice in funding this new product through a combination of debt, equity and income.


Then they should have put clauses in their contract that exempted copper from comcom price changes. If they could not do that, they should have kept a lazy balance sheet until they did know the outcome.

The plain fact is that both Chorus management and shareholders knew that a review of copper pricing was on the horizon. It was a known risk.

[Merc]

Then they should have put clauses in their contract that exempted copper from comcom price changes. If they could not do that, they should have kept a lazy balance sheet until they did know the outcome.

The plain fact is that both Chorus management and shareholders knew that a review of copper pricing was on the horizon. It was a known risk.

Yes, it was known. But it was also assumed that com com would comply with section 18 of the Telecommunications Act rather than dismiss it as of no importance. This will be challenged in Court.

[Poet]

I don't know if anyone has posted the relevant sections of the act but if not, here they are:

2 In determining whether or not, or the extent to which, any act or omission will result, or will be likely to result, in competition in telecommunications markets for the long-term benefit of end-users of telecommunications services within New Zealand, the efficiencies that will result, or will be likely to result, from that act or omission must be considered.

(2A) To avoid doubt, in determining whether or not, or the extent to which, competition in telecommunications markets for the long-term benefit of end-users of telecommunications services within New Zealand is promoted, consideration must be given to the incentives to innovate that exist for, and the risks faced by, investors in new telecommunications services that involve significant capital investment and that offer capabilities not available from established services.


So I guess that Chorus will be asking the high court whether or not the comcom's decision to look at copper network in isolation from the whole picture complies with the above legislation - seems to me that it hasn't, but you never know with courts. And obviously the comcom does think it has complied

[Harvey Specter]

Is there anything that requires CNU to offer anything but voice over copper?

From NBR:


Chorus provides most of us with pretty good copper broadband speeds. But legally, it's only obliged to provide ISPs with a minimum 32Kbit/s copper broadband - dialup rather than actual broadband speed. http://www.nbr.co.nz/article/chorus-responds-brislen-idc-nuclear-option-theory-ck-149759

Hows that for an option. They should start with a selective roll out to all ComCom employees personal residences.

[Merc]

Nothing quite like looking at one's internet plans to come to the conclusion that one should keep an eye on it on a regular basis.

When a fixed term mortgage is about to expire the bank sends a letter offering the choice of going onto the current floating rate or renewing it for another term.

Telcos don't do this. They sign you up for two years and when the time expires carry on charging at the rate of the plan unless you, as the customer, remember and "do something about it." Telcos must make an absolute killing on this one!

My research over the weekend shows me that:
- We'll stay with Vodafone for the phone and broadband (although changing the plan to the new rate) BUT
- There are far better options for our data card courtesy of 2 degrees (we wander a bit) AND
- One of our two mobiles will join the other one at 2 degrees

Reason?
Location. Limited options for alternatives to existing and for us Vodafone works out the cheapest (theoretically, if Chorus still have any cash, they will be doing a network upgrade here in the next 18 months. Won't be to fibre though.)

As for data plans... have they ever changed! Carry over data and the ability to use the one plan for various devices.

If you haven't looked at your plans recently it is worthwhile doing so.

[KiwiGreen]

Some great discussion and informative posts on this Chorus forum. This article just got released on the TUANZ website so thought I'd post it. Talks about the risk of Telecom choosing to unbundle when that option becomes available to them at the end of the year.

"The Ernst & Young Australia report into Chorus is not a review of Chorus's financial position, despite some media reports that would suggest that's what's happening. Rather it's a review of the impact the Commerce Commission's UBA and UCLL determinations will have on "key Chorus financial indicators".

The short answer is, naturally enough, yes it will.

I know of no business, regulated or otherwise, that wouldn't have some impact with a reduction in its incoming revenue.

On top of that, the review is explicitly barred from looking at Chorus's own "strategic choices" especially those that "may have led to higher capital expenditure than initially forecast."
That’s quite a limiting factor – especially if you think that Chorus’s problem is largely nothing to do with the Commission’s determination but rather is a matter of cost blow-outs in the rollout itself.
So what will the review look at, because without all of that it's going to be hard to come up with any result beyond "OMG, the ComCom is to blame".

One of the main factors in the report will have to be the counter-factual Ernst and Young comes up with.

The counter-factual is the “what if?” scenario. What would have happened if the Commerce Commission hadn't reduced the price? With the counter-factual to hand, we'll be able to determine the net difference in pricing regimes.

Incidentally, the government isn't waiting for this and has already directed Crown Fibre and Chorus to sit down together to renegotiate the UFB deal.

That may be the right thing to do at this point. I'm hard pressed to support yet another closed-door secret back room deal (they tend to have severe unintended consequences for the industry and the users, to put it mildly) but given the government isn't looking to reduce its requirements or increase the money being paid out, I presume the discussions will revolve around payment schedules, bank guarantees and the like.
I trust any such agreement comes with severe caveats around both the Final Pricing Principle review and the high court legal action Chorus is taking, not to mention certain performance criteria and a new dividend policy, but that’s just me.

Let's look at the counter-factual and the elephant in the room that nobody has mentioned.

At the end of this year, in just a couple of weeks' time, Telecom will be allowed to unbundle Chorus's network.

As part of the separation agreement, Telecom has been excluded from being able to unbundle Chorus's network.

Telecom retains the lion's share of the fixed line broadband market and the belief was that Telecom would be able to sweep in, unbundle on a massive scale and undermine Chorus's ability to earn any money from the UBA component of its copper network.

The issue of whether Telecom wants to unbundle or not remains a key consideration for both Ernst and Young and Chorus.

If the UBA price is too high, Telecom will spend the money and unbundle, dramatically cutting Chorus's earnings. Never mind the impact of the Commission's determination, if Telecom took its 50% market share to an unbundled service, Chorus would lose everything.

Telecom doesn’t necessarily want to blow $50m or more on the copper network when it’s gearing up to fight a fibre war. It would rather spend its money on content and services that drive customers to the fibre network and reap its rewards in the longer run.
The question for Ernst & Young is: how high is too high? At what point would Telecom have moved to unbundle? It will have to work that out to produce a counter-factual that actually makes sense. If it just takes the existing regime and compares that with the new UBA price, it will have failed in its mission to provide a comparable counter-factual because despite the rhetoric from both Chorus and the government, there’s no going back to the old numbers.
The retail-minus model has always produced results that mean New Zealanders pay too much for broadband. Moving to a cost-based model was always going to be a shock to the system but nothing like the shock that could still come from half the market moving to an unbundled provider.
The report is due out shortly and we’ll be able to see what E&Y make of all this. Hopefully the negotiations between Crown Fibre and Chorus will result in an amicable agreement and we can put this sorry year behind us and get on with rolling out the future in a more rational, sober way."

http://tuanz.org.nz/blog/2013/12/9/will-telecom-unbundle

[craic]

Is Rubbish? Read the latest Telecom announcement, today and look forward to a nice capital gain and a fat dividend for TEL

[Bobcat.]

CNU today is not exhibiting signs of a bounceback. In spite of the DJIA and S&P500 lifting 1.3% last Friday night, it's trading flat at 133. Last Friday on the NZX saw a high of 140 followed by a low of 127 (i.e. tracking down) before lifting a little to close at 132.

I won't be surprised given today's lacklustre trading that 127 is soon tested again.

Not buying yet...

[JayRiggs]

Here's your chance to ask Amy Adams anything you like. Answers will be posted between 12:30pm - 1:30pm.
http://www.nbr.co.nz/ask-amy

[couta1]

Here's your chance to ask Amy Adams anything you like. Answers will be posted between 12:30pm - 1:30pm.
http://www.nbr.co.nz/ask-amy
For some of us on here that horse has well and truly bolted and its too late for her to attempt a recapture and saddle up again me thinks this horse changes colours too often

[Balance]

Until Bank of NY Mellon has finished selling, it's a one way bet - 25m shares to go.

[Balance]

SSH ths morning.

19.24m shares to go - thinking share will hit $1.00?

[Bobcat.]

SSH ths morning.

19.24m shares to go - thinking share will hit $1.00?

Don't assume they want out entirely. They may be satisfied trading down to hold under 5%, which is where they are at now.

[couta1]

SSH ths morning.

19.24m shares to go - thinking share will hit $1.00?
I wonder what these guys paid per share? If it was in the $2.50-$3 range they've lost a fortune, wondering if that other big fund manager that commented on NZ will also dump the rest of theirs as well?

[couta1]

Bobcat, Could you give me a reply to post number 1868 please

[Bobcat.]

Bobcat, I'm just wondering if it wouldn't be wise for those that want to jump back in to wait and see what the future dividend policy might be? Unless you want to trade the stock of cause

I have a trading portfolio as well as an investment portfolio that I'm managing on behalf of a friend. My strategies are usually different for the two.

As a trader, I'm looking for a higher high today (to follow yesterday's higher low). Anything over 133 would trigger a buy with intent to sell short-term.

As an investor longer term, my intent is to buy and hold. There is in my view still some bad news to come (e.g. equity raising, no divi confirmed, etc) and some time before the good news surfaces (Court rules in favour of CNU, etc) so I'm leaving CNU out of the Investment portfolio for now.

Make sense Couta1?

[couta1]

I have a trading portfolio as well as an investment portfolio that I'm managing on behalf of a friend. My strategies are usually different for the two.

As a trader, I'm looking for a higher high today (to follow yesterday's higher low). Anything over 133 would trigger a buy with intent to sell short-term.

As an investor longer term, my intent is to buy and hold. There is in my view still some bad news to come (e.g. equity raising, no divi confirmed, etc) and some time before the good news surfaces (Court rules in favour of CNU, etc) so I'm leaving CNU out of the Investment portfolio for now.

Make sense Couta1?
Thanks Bobcat, I find your updates most useful and in fact if had have followed your Rym is turning comment I would have made 8k back toward my CNU loss already but was a bit slow off the mark so will have to wait until next year now to have another go at that one,cheers

[Xerof]

I wonder what these guys paid per share? If it was in the $2.50-$3 range they've lost a fortune, wondering if that other big fund manager that commented on NZ will also dump the rest of theirs as well?
I remember balance telling us it was a buy in high 2.70 area, sure enough, a day or two later, we see that JPM were buying. Are they still holding, I wonder? Might be even more to be sold?

so, JPM bought near the top, Mellon's custodial clients could also be selling near the bottom.

nothing is ever as it seems


this is not a dig at balance either, just saying, noone is bigger than the market

[Balance]

I remember balance telling us it was a buy in high 2.70 area, sure enough, a day or two later, we see that JPM were buying. Are they still holding, I wonder? Might be even more to be sold?

so, JPM bought near the top, Mellon could also be selling near the bottom.

nothing is ever as it seems


this is not a dig at balance either, just saying, noone is bigger than the market

No sweat. Them's the breaks.

Experience with the big boys from US (and Oz) is that they are all in and all out.

Taking a $30m hit does not faze them either as the size of their funds are mind boggling - US$100b plus so a 1% gain or loss is $1 billion!

[couta1]

No sweat. Them's the breaks.

Experience with the big boys from US (and Oz) is that they are all in and all out.

Taking a $30m hit does not faze them either as the size of their funds are mind boggling - US$100b plus so a 1% gain or loss is $1 billion!
Wouldn't the clients of these fund managers be the ones taking the hit at the end of the chain though?

[Xerof]

Wouldn't the clients of these fund managers be the ones taking the hit at the end of the chain though?

certainly is couta, and then they get clouted for fees and bonuses. I know of one hedge fund manager who returned less than 3% to clients one year (about what they would have earned unleveraged by leaving it at a bank on deposit) and took a personal bonus of US400,000,000 for himself, for all his good work

[sideline]

Don't assume they want out entirely. They may be satisfied trading down to hold under 5%, which is where they are at now.

Guys, is it really so hard to understand how BNY Mellon operate the ADR programme and that its not them making the investment decisions here.
Note from the SSH: "There have been various purchases and sales of Common Shares and ADRs over multiple dates."

[Xerof]

Guys, is it really so hard to understand how BNY Mellon operate the ADR programme and that its not them making the investment decisions here.
Note from the SSH: "There have been various purchases and sales of Common Shares and ADRs over multiple dates."

Quite right sideline, we did digress onto other masters of the universe, but one has to at least try to dispell these sort of myths

Until Bank of NY Mellon has finished selling, it's a one way bet - 25m shares to go.

i have edited my first comment to read 'Mellons custodial clients.....'

[macduffy]

Sorry to pinprick here but it's not necessarily Mellon's clients who were doing the selling. Mellon are a big custodian player in the US market and just happen to administer the ADR "register" on CNU's behalf. For "significant shareholder" purposes, fluctuations in the number of ADR shares reflect in Mellon's notional "holding" regardless of who is doing the actual buying and selling.

[sideline]

Sorry to pinprick here but it's not necessarily Mellon's clients who were doing the selling. Mellon are a big custodian player in the US market and just happen to administer the ADR "register" on CNU's behalf. For "significant shareholder" purposes, fluctuations in the number of ADR shares reflect in Mellon's notional "holding" regardless of who is doing the actual buying and selling.

Exactly! The SSH only means the whole US american market has reduced its holding of CNU to below 5% of the total float - that will be many different holders of varying sizes contributing to that outcome. Mellon is only the conduit facilitating those holdings of overseas shares on the US market.

[Balance]

Exactly! The SSH only means the whole US american market has reduced its holding of CNU to below 5% of the total float - that will be many different holders of varying sizes contributing to that outcome. Mellon is only the conduit facilitating those holdings of overseas shares on the US market.

Not necessarily.

There are several huge funds in the States (eg. Capital Group) who typically invest at least 5% of a company.

[vorno]

Full update from Chrous for Shareholders: https://www.nzx.com/files/attachments/186742.pdf
Commission initiates review: https://www.nzx.com/companies/CNU/announcements/245003

[clip]

Looks slightly more positive to me, however the comcom deciding to back date the updated charges to dec 2012 is a big red flag/warning the way I'm reading it. Though I had seen talk of backdating prior, i thought it would be from 2014 to dec 2013, not 2012 (I probably missed this when reading). Disc not holding but keenly watching