Regulator consults on Chorus’ fibre network investment plans

12 Feb 2021

New Zealand’s competition regulator, the Commerce Commission, is consulting on Chorus’ proposal to spend NZD1.6 billion (USD1.16 billion) over the first three years of the new fibre regulatory regime. Under the new regime, wholesale fixed line provider Chorus will be subject to price-quality regulation, whereby the Commission sets the maximum revenue Chorus can earn from its customers and the minimum quality standards it must meet. Any expenditure proposed by Chorus and approved by the Commission will help determine the revenue Chorus can recover from retail service providers which use its network to sell broadband services to homes and businesses. Stakeholders are invited to make their submissions before 12 March.

In its proposal for its first regulatory period from 1 January 2022 to 31 December 2024, Chorus is seeking approval to invest NZD983 million in capital expenditure – a 44% reduction compared with 2020 – and incur operating expenditure of NZD599 million (a 17% increase). The Commission will assess the company’s proposal against the Chorus capex input methodologies set by the Commission in 2020 that underpin how the regulatory regime treats capital spending. The Commission will make its draft decision in May and its final decision in September 2021, before finalising Chorus’ first price-quality path in November 2021.