SPK- Spark NZ (TELCO)

[Master98]

Spark and Chorus are quite different company, Chorus is fully regulated, and Spark is not, Spark can (even though not that easy) pass their extra cost to customers, even maybe part of the cost, so should not expect SPK share price to drop as much as Chorus did.

[xafalcon]

Spark chief executive Simon Moutter says the company will finalise price rises within days

http://www.stuff.co.nz/business/mone...ds-price-rises

What a sham this is. Companies saying they need to increase their pricing, yet their input costs are falling significantly (14%), just not by the windfall 23% they were expecting.

Any excuse to raise prices on a captive market seems fair game now. Very similar to the NZ petrol market

What has comcom actually acheived here?

Outwardly it appears they have scored an own-goal and given the telco's an excuse to raise margins.

[Master98]

Any excuse to raise prices on a captive market seems fair game now. Very similar to the NZ petrol market

yes, NZ petrol market always the winner.

[BIRMANBOY]

Relax ..raising margins is something every profit driven enterprise is designed to do...the market place and Commerce Commission will work the way they should and find a balance between return on capital and consumer protection. Easy to focus on one perceived anomaly but much more pertinent to look at the big picture.

What a sham this is. Companies saying they need to increase their pricing, yet their input costs are falling significantly (14%), just not by the windfall 23% they were expecting.

Any excuse to raise prices on a captive market seems fair game now. Very similar to the NZ petrol market

What has comcom actually acheived here?

Outwardly it appears they have scored an own-goal and given the telco's an excuse to raise margins.

[couta1]

The whole uncertainty around this backdating thing is the main issue to me, if it goes back two years rather than just to December 1st then that's going to have a massive impact on Sparks bottom line from April forward. Off course it may go the other way and the FPP may come back a dollar or so which would be bad news for Chorus.The whole situation was completely avoidable if the ConCon hadnt be so intent on playing their power games in the first place by setting the price for Chorus at that ridiculous $34 level,even if Sparks SP goes back over $3 short term until April comes and goes there's just too much uncertainty IMO and I'm staying out of both stocks.

[Master98]

The whole uncertainty around this backdating thing is the main issue to me, if it goes back two years rather than just to December 1st then that's going to have a massive impact on Sparks bottom line from April forward. Off course it may go the other way and the FPP may come back a dollar or so which would be bad news for Chorus.The whole situation was completely avoidable if the ConCon hadnt be so intent on playing their power games in the first place by setting the price for Chorus at that ridiculous $34 level,even if Sparks SP goes back over $3 short term until April comes and goes there's just too much uncertainty IMO and I'm staying out of both stocks.

Remember couta1 Spark is not a regulated company, it is always can find a way go out.

[couta1]

Remember couta1 Spark is not a regulated company, it is always can find a way go out.

True but the extent it can raise its prices by does have a cap and that cap could leave it facing a significant earnings downgrade.

[Master98]

True but the extent it can raise its prices by does have a cap and that cap could leave it facing a significant earnings downgrade.

Cap for non regulated company? I dont think so.

[couta1]

Cap for non regulated company? I dont think so.

Its called the TSO cap and puts a limit on how much price increase Spark can pass on.

[Master98]

Its called the TSO cap and puts a limit on how much price increase Spark can pass on.

oh. this is not major, Spark can figure it out.