Chorus plan to add director after lifting fee cap

Chorus [NZX: CNU], the regulated telecommunications network operator, wants to add another independent director to its board to enhance its capability in what's become a vastly different landscape in just three years.

Shareholders today voted on whether to approve a lift in the pool for directors' fee to $1.1 million from $980,000, which was set in 2012 when Chorus was carved out of the then-dominant telecommunications company, Telecom Corp, which has since rebranded as Spark New Zealand.

Chair Sue Sheldon told shareholders the increase won't spill over into higher fees for the current directors, rather, it would allow the company to add another director with "additional skills and perspectives" in a new environment for the company.

The board faced an increased workload in the 2014 financial year, with 33 meetings compared to 14 the year before, and a normal schedule of eight.

In response to a question from a shareholder, Sheldon said the increase was based on the average fee for an ordinary director plus a committee role.

Speaking to BusinessDesk after the meeting, Sheldon said when the board was established it was thought Chorus would operate as a typical regulated utility, though that has changed with bedding in of the new regulatory landscape.

"That obviously looks different from what the position looked like in 2011, and we're working through that process," Sheldon said. "It's not just one particular thing we're looking for."

Chorus has been locked in a battle with the Commerce Commission over the past 18 months after the regulator imposed steeper cuts to the regulated price of services over the network operator's copper lines. The company has been fighting initial determination based on international benchmarks in the courts, while at the same time lobbying the regulator to take a softer approach in its more fulsome review.

Chief executive Mark Ratcliffe told shareholders the regulatory framework Chorus operates in needs updating to provide the sector with more stability and improve the fibre uptake. That includes bringing forward a review of the telecommunications framework from its scheduled 2016 start date, and earlier certainty for the post-2020 pricing regime to ensure investors can base their decisions on.

"I've had some indications from officials for the minister that they're contemplating starting some preliminary work on that in the current term," Ratcliffe said in response to a question from Scott Hudson of the New Zealand Shareholders' Association.

Ratcliffe also said clarity is needed on the Telecommunications Service Obligation review started last year, as would a streamlined consent process for fibre deployment.

Shares of Chorus rose 0.7 percent to $2.085, and have gained 44 percent this year.

(BusinessDesk)