MARKET TALK: Chorus soars as shackles come off copper pricing
Hamilton Hindin Greene analyst Jeremy Sullivan discusses sharemarket plays of the week. With special audio feature.
Click the NBR Radio box for on-demand special feature audio: Hamilton Hindin Greene analyst Jeremy Sullivan talks shares with Duncan Bridgeman and Andrew Patterson
Two-and-a-half years of turmoil and uncertainty was lifted from Chorus [NZX: CNU] this week when the Commerce Commission delivered its verdict on how much the company can charge for services over its copper wires.
“Clearly it’s good to see this uncertainty removed, the issues resolved and the coming together to view the real world costs associated with rolling out the network and the pricing moving back closer to where this all began,” Hamilton Hindin Greene analyst Jeremy Sullivan told NBR Radio’s Andrew Patterson.
The commission’s final decision sets a much higher price and paves the way for Chorus to resume paying dividends after it suspended payments in late 2003 due to an earlier ruling.
“I don’t think the commission necessarily got anything wrong,” Mr Sullivan says.
“It was just applying the law as it is written and in the process it is required to use benchmarking – but there are not very many fibre networks they could use to benchmark. Denmark and Sweden were the primary candidates and obviously their demographics are rather different from ours.
“In New Zealand 80% of residents live in standalone houses, whereas in those two countries you have roughly two-thirds living in multi strata houses …
“That was effectively the legislation that it had to use and it applied it in the way it was allowed to do so.”
Tune in to the special audio feature for the full interview, plus hear Mr Sullivan’s thoughts on this week’s GDP figures.
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NBR Radio
Fri, 18 Dec 2015
Fri, 18 Dec 2015
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MARKET TALK: Chorus soars as shackles come off copper pricing
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