Thank you. Checked Flip out and it is cheaper with the advantage of carry over - but it isn't available in our area :(
Printable View
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.
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
From NBR:
http://www.nbr.co.nz/article/chorus-...eory-ck-149759Quote:
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.
Hows that for an option. They should start with a selective roll out to all ComCom employees personal residences.
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.
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/w...lecom-unbundle
Is Rubbish? Read the latest Telecom announcement, today and look forward to a nice capital gain and a fat dividend for TEL
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...