CNU - Chorus

[Major von Tempsky]

Does ComCom know what it's doing? But ComCom foreshadows a changes in the Telecommunications Act - which I think will be ComCom's turn to get a nasty surprise as the Government uses it to sort ComCom and enforce its plans for UFB vs copper.

GENERAL: CNU: Draft Decision on UCLL Pricing Release by Commission 08:43a.m.

CNU
04/05/2012 08:43
GENERAL

REL: 0843 HRS Chorus Limited (NS)

GENERAL: CNU: Draft Decision on UCLL Pricing Release by Commission

STOCK EXCHANGE ANNOUNCEMENT

4 May 2012

Draft decision on UCLL pricing released by Commerce Commission

The Commerce Commission has issued a draft decision on UCLL re-benchmarking.

The Commission's draft decision proposes a new price for UCLL services. This
would impact around 6% of Chorus' copper-based access services on today's
volumes.

The draft UCLL price is no longer an exact average of the existing urban and
non-urban UCLL prices.

The draft decision foreshadows that there will be further Commission
processes. This includes an investigation into a potential change to the
Telecommunications Act for how the price of UCLFS services will be
calculated. The implications for the pricing of the other Chorus services
referred to the Commission's draft decision (SLU, UCLFS) is unclear. Chorus
is disappointed that this creates uncertainty for investors and industry.

At a time when New Zealand is making a very significant investment in
building a fibre world, Chorus is concerned that the Commission's draft
decision creates a potential disincentive for retail service providers and
end customers to transition to fibre services.

This is a complex draft decision and we are continuing to analyse it. Chorus
will engage with the Commission on this issue through the submission,
cross-submission and conference processes before the Commission issues a
final decision in mid-August.

A copy of the Commission's media release is attached.

Investor teleconference

An investor teleconference to discuss today's announcement will be held today
at 12:30pm NZ time (10:30am Australian EST). Please dial into the
teleconference 5 minutes before the scheduled start.

Please have the Conference ID ready to quote to the operator when dialling
in: Conference ID: 77975707

To join the teleconference, please use the following dial in numbers:

Country Date Time Dial in
New Zealand 4/05/2012 12:30pm 083035
Australia 4/05/2012 10:30am AEST 1800 007 094
USA 3/05/2012 8:30pm EDT 1800 651 8618
Hong Kong 4/05/2012 8:30am HKT 800 966 885
Singapore 4/05/2012 8:30am SGT 800 641 1152
Japan 4/05/2012 9:30am JST 00531 64 0081
UK 4/05/2012 1:30am GMT 0800 032 3241

*To join the teleconference via International Direct Dial from other
countries, please dial your country's international access code followed by
+64 83 08 30 35

An audio recording of that briefing will also be made available on the
investor centre section of Chorus' website afterwards.

ENDS
For further information:

Melanie Marshall
Head of Communications & Brand
Mobile: +64 (27) 452 6231
Email: melanie.marshall@chorus.co.nz

Brett Jackson









© Direct Broking Limited 2005.

[Major von Tempsky]

National now has a problem it will have to address: after the shabby treatment meted out to first Telecom and now Chorus by successive governments and ComCom it's going to be a very sceptical investing public eyeing the 5 floats National is so desperate to get away to please the IMF and help the Budget.

I was interested in getting a slice of Mighty River but I'm not now, I wouldn't touch it with a 40 foot barge pole and I predict neither will other investors including overseas ones until the Government fixes the Chorus ComCom problem and future ComCom problems in advance for the power companies.

The floats are going to go down like lead balloons. The Labour Party can relax.

[macduffy]

National now has a problem it will have to address:

I think you're right there, Major.

But I don't see the SOE partial floats going down like lead balloons. Those partial privatisations are too important to the ongoing success of the govt to be allowed to fail, so I see pressure being brought on the CC - which will also benefit CNU down the track.

Time to look seriously again at CNU, IMO.

[Hoop]

Com Com's timing was to pure perfection ....the very same day that the NZ$ did a TA break...If I was an overseas investor in NZ equities (aka CNU, TEL) I'd be ditching too. FBU has already been mostly ditched...
Is this the start of foreign money leaving NZ and returning home?

[Silverlight]

If we get back to $3 its good buying, above $3.60 was looking too rich, long term Chorus still has a monopoly and is being paid to build the UFB and has an excellent mgmt team.

The idea that mighty river won't do well is a misnomer as Chorus is not 50% owned by the government therefore they don't have a direct implication that the comcom is hurting an SOE.

[blockhead]

Just what I love, put a whole bundle of cash in a stable share like CNU and the Tories change the rules one day, no wonder people prefer to buy a house and there is no investment in the so called productive sector. I had just been saying to Mrs Blocky we should invest a few hundred thousand in stable shares like TEL and CNU but she was wary, she remembers Equiticorp etc. Phew, saved by Mrs Blocky again !

Well don't ask me to invest in the SOE's, I would rather leave it in the overseas owned banks !

[Major von Tempsky]

David B - the problem is the principle involved.

If ComCom can get away with interfering in the market for copper wire transmission then it can get away with interfering with fibre-optic prices. And then it's a very short step to interfering in electricity price markets against Mighty River, Meridian, Genesis. Naturally after they had been successfully floated à la Telecom.

Beware: Karl Marx and Stalin and Mao Tse Tung are alive and well and living in NZ and working at ComCom.

The market has now learned a very bitter lesson: Don't touch any share in NZ which could possibly be attacked by ComCom and never trust Government share-floats. They're poison.

[blockhead]

Hi Sparky, I didn't mean to liken Chorus to Equiticorp, what I was trying to emphasise is there are still a lot of people wary of the sharemarket as a place to put hard earned savings because they remember it as a place where a huge amount of money was lost in the '87 crash. Mrs Blockhead has a long memory and still thinks it is a dodgy place to put the hard earn't, such decisions as we saw last week just keep reinforcing her thoughts.

[troyvdh]

I think that you and Mrs Blockhead are exactly right.
What folk continue to fail to realise is that for institutions like the share market to thrive ...it requires credibility....again I will state that as long as incidents (like Ms Gatting telling politcians behind closed doors that should they adopt a particular policy then the SP of TEL would collapse thereby effecting shareholders and institutions adversly) and the abovecontinue there is little hope.

And yet ..."experts"....Like Martin Hawes (Sunday times) continue to chide and ridicule residential investors (like me 30 + years) who continue to enjoy satisfactory returns and considerable comfort !!!!!!.It aint that flash....but its good enough !

[BIRMANBOY]

I think that you and Mrs Blockhead are exactly right.
What folk continue to fail to realise is that for institutions like the share market to thrive ...it requires credibility....again I will state that as long as incidents (like Ms Gatting telling politcians behind closed doors that should they adopt a particular policy then the SP of TEL would collapse thereby effecting shareholders and institutions adversly) and the abovecontinue there is little hope.


And yet ..."experts"....Like Martin Hawes (Sunday times) continue to chide and ridicule residential investors (like me 30 + years) who continue to enjoy satisfactory returns and considerable comfort !!!!!!.It aint that flash....but its good enough !

As the aussies say, harden the f**k up! :-) Come on.. the share price is not guaranteed....as someone said it goes up and it goes down. I'd rather have shares than deal with bad tenants, continual maintenance, rent tribunals, bad tenants (again)! and all of my money tied up in something I cant sell quickly if I need to. Up to the individual how they invest of course but if you are smart and diversify your share portfolio you will probably be up someplace and down somewhere else. So what if something goes down...history will show that a majority of sound companies recover over a period of time and if you are patient the "downs" are great to pick up more shares at a good price. I feel sure I will be buying some more CNU soon.