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Thread: CNU - Chorus

  1. #21
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    True, true, the thought occurred to me also. So, when the NZ $ rises they take profits but don't affect TEL so much because of the buyback.

    Other thought that occurred to me - all the brouhaha about Sam Morgan's Pacific Fibre cable possibly in two years time - are punters thinking that may impact CNU? Presumably TEL put it's half share of Southern Cross into CNU...

    Doubt if Pacific Fibre will be a big money spinner for Sam - for a start the Commerce Commission will by eyeing it like a circling vulture as it does all telecoms in NZ and presumably Southern Cross will price competitively and add to its capacity leaving Sam lamenting. And who knows where it will be in two years, it may not fly yet.

  2. #22
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    Southern cross sits with TEL.

    If you picked CNU up at $3, selling at $3.50 is equivalent of 2 years of dividends, especially if they are not imputed in year 1.

    Most Chorus holders will be after yield, so its an easy switch to another yield holding, $3.70 looked giddy, and $4 is move your holding to cash territory.

    $3.30 looks about right with no impuation.
    ~ * ~ De Peones a Reinas ~ * ~

  3. #23
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    Quote Originally Posted by Major von Tempsky View Post
    ...
    Other thought that occurred to me - all the brouhaha about Sam Morgan's Pacific Fibre cable possibly in two years time - are punters thinking that may impact CNU? Presumably TEL put it's half share of Southern Cross into CNU...
    In the split TEL actually kept the SC Cable (i think).
    Another problematic fact for the new cable proposed is
    that TEL as well as several major users of SCC have repeatedly
    pointed out there actually is no market shortage, there is lots of
    spare unused capacity. Furthermore the actual SCC charges are
    well within market limits - nobody is getting overcharged at all.
    Also TEL/SCC consortium have several times significantly reduced
    SCC tarrifs in recent years. At the same time there has been significant
    investment in improving SCC & its servicing technology. All of which is
    quite contrary to the lazy journalism of NZ newspapers who just seem to
    have been parroting propaganda from the TEL-haters.
    So how good is the business argument for the new cable? why have several
    big customers signed up to use it? I want to learn a lot more about it before
    seriously considering investing in a future ipo for the new cable.
    At that time we will also be very interested in whatever TEL will be doing, but
    we can be sure it will be a very competitive response.
    Conceivably, TEL might even have found reasons to welcome a new competing cable.

  4. #24
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    Quote Originally Posted by sharer View Post
    Conceivably, TEL might even have found reasons to welcome a new competing cable.
    No way - that’s like Telecom welcoming unbundling..

    Pac Fibre is bad news for Telecom, the way the make the business case work is by lifting the bandwidth and charging lower prices. SX will eventually struggle to compete as it hits the bandwidth thresholds. Is at this level where Pac Fibre will probably hold their price.

    SX has been on the down trend for a few years now, and could be forgotten completely at some point in time.

    About a $50-80m hit to EBITDA.

  5. #25
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    http://www.nbr.co.nz/article/souther...band-ck-107901

    This, from the NBR today, is rather more optimistic (and disagrees with Buns, but hey I'm not looking for an argument :-) )
    They also announced a 44% price cut which rather undermines the economic rationale for Pacific Fibre. Good to see someone fighting back rather than just lying back and allowing themselves to get trampled over.

    ......"Southern Cross announced a capacity boost, and plans for a 100 gigabit/sec upgrade by December (that’s a very, very, very fast speed – but also academic, given your ISP will only buy a small slice of capacity, largely dictated by price).

    As ever, there’s no doubt, on a technical level, that Southern Cross can carry all the broadband data that New Zealand internet users can throw at it – and likely continue to as the Ultrafast Broadband (UFB) roll-out brings faster fibre connections to homes and businesses over the next decade. The key benefit of the Pacific Fibre (Sydney-Auckland-LA) and Axin/Huawei cables (Sydney-Auckland) will be to provide more price competition.
    "
    If they go ahead in two years time.... ;-)

  6. #26
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    Why the continuing weakness in Chorus? Anyone have any ideas?

    Does it go on to the 1st report in August and then everyone snaps awake?

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  8. #28
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    Ouch!

    This cuts right across what the Government was trying to achieve both with the UFB and the partial floats of Government Corporations.

    Expect the heavy boot of Government to go STAMP! on the extended fingers of the Commerce Commission at some stage :-)

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  10. #30
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    Initial thoughts were to expect a sp rise this am, so far, so good.

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