Chorus secures early funding for NZ fibre roll-out
Kiwi operator Chorus has secured early funding from Crown Fibre Holdings for the roll-out of New Zealand’s Ultrafast Broadband (UFB) network.
Crown Fibre Holdings, the company managing Chorus and the New Zealand government’s investment in the nationwide fibre roll-out, has agreed to bring forward up to NZ$178 million ($154 million) in network investment funding.
Chorus is building approximately three-quarters of New Zealand’s national network and the funding was initially budgeted for the financial years 2018 and 2019.
The NZX-listed operator said the offer stands as a relatively expensive source of funding with an effective finance rate of roughly 8.5%, but Andrew Carroll, CFO at Chorus, said it was a “useful funding backstop”.
The company has said that the roll-out of the network is being hit by regulator plans to control prices it can charge ISPs for access to its network, which could knock Chorus’s income by as much as NZ$1 billion ($868 million) up to 2020.
The early funding is not anticipated to come into effect until after October 2015, when the NZ regulator is expected to make a final decision on pricing, and will be terminated if Chorus does not use it by June 2016.