Commerce Commission wants Chorus to cut capital spending plan

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Standard & Poor’s is keeping Chorus’ credit rating on negative watch.
Photo: RNZ

Telecommunications lines company Chorus will need to do more to convince the Commerce Commission to approve its revised four-year capital spending plans.

The Commerce Commission wants Chorus to cut 16 percent or $302.6 million from its original capital spending plan of $1.59b over the next regulatory period (2025-2028).

Chorus said it had already pared back its spending by $200m in February to $1.3 billion.

However, Telecommunications Commissioner Tristan Gilbertson said the commission was not satisfied.

He said Chorus had failed the expenditure test in a number of areas, which resulted in a draft decision to cut back on its spending, though Chorus could provide further evidence to support an increase ahead of the commission’s final decision.

“We want to see ongoing investment in world-class infrastructure but are conscious that any expenditure we approve is ultimately borne by Kiwi consumers in the prices they pay for fibre services,” Gilbertson said.

“That’s why the rules require Chorus to demonstrate that proposed expenditure is prudent and efficient.”

Chorus chief corporate and regulatory officer Julian Kersey said Chorus was undertaking a detailed review of the draft decision and would make submissions identifying the likely consumer outcomes, given the reductions to planned spending.

“High-speed broadband plays an increasingly important role for homes and business across Aotearoa. It is critical that we have allowances that are sufficient to let us meet consumers’ expectations for reliable, uncongested broadband,” he said.

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