25 Feb 2013

TUANZ sceptical of Chorus's UFB estimates

9:20 pm on 25 February 2013

The Telecommunications Users Association (TUANZ) says the increased cost of Chorus rolling out its part of the ultra-fast broadband network could delay people's access to it.

Chorus says the network will cost another $300 million because of the difficulties in digging up crowded areas such as Ponsonby and central Wellington.

TUANZ chief executive Paul Brislen finds it hard to believe that Chorus underestimated the costs and thinks the company's just looking for a handout.

He says ultimately it's the users who will suffer.

"We will end up being delayed and given that most of us won't see the connection by the latter half of this decade, it may well push it back by two or three years. So it may well be that most of us won't get connected by 2019, 2020, which given that we're paying for the thing is rather vexing, really."

Mr Brislen says Chorus' estimates seem much higher than what it would cost similar companies to do the same job.

International Data Corporation analyst Peter Wise says customers could bear the brunt of the increased cost.

He says if something costs more to build then potentially it will cost more to buy services from it in the future, otherwise a business case will not stack up.

Chorus on Monday reported a half-year profit of $84 million. Earnings for the six months to the end of December were $331 million.