NZ's Chorus makes deal to get paid early for UFB network work

Reuters News
Posted: Jul 17, 2014 5:36 PM

WELLINGTON (Reuters) - New Zealand telecommunications network operator Chorus Ltd said on Friday it had agreed a plan with a government agency that would allow the company to be paid earlier for building the government-sponsored ultra fast broadband network.

The company, which is building about three-quarters of the national network, said under the conditional deal it could bring forward up to NZ$178 million of payments.

Chorus has said that its ability to build the ultra fast broadband network is being diminished by regulator plans to control prices it can charge internet service providers for access to its network.

It has said the controls will knock its income by as much as NZ$1 billion up to 2020, which has prompted it to suspend dividends and look for savings.

The company said the early payment plan was an important funding backstop, and would not come into effect until after October 2015 when the regulator is expected to make a final decision on pricing.

(Gyles Beckford)