Chorus CEO Kate McKenzie said the agreement will ensure a future-proofed network solution for another 200 towns and rural communities. "Fibre uptake across our existing UFB areas is at 35 percent, while first time orders from addresses in our FY14-FY16 rollout areas are already about 45 percent to 50 percent," McKenzie said. "New Zealand’s fibre footprint will now extend to close to 90 percent of the population," McKenzie added.
The terms of the agreement are consistent with the previously announced UFB 2 rollout. Chorus will receive further state funding including NZD 2,000 per premises passed, or up to ZND 109 million in CFH equity securities, for the additional 54,500 premises. This equates to approximately 75 percent of the expected communal rollout cost of ZND 135-155 million. The additional state funding also includes NZD 7 million to assist with accelerating the UFB 2 build. Build work on the new UFB areas is expected to begin from FY19.
The fibre expansion is expected to increase Chorus’ peak leverage in the medium term, so Chorus will arrange underwriting of its final FY17 dividend payment. In addition to its investment in rural fibre, Chorus plans to invest around NZD 20 million to deploy VDSL vectoring capability in rural and local fibre company areas during FY18. This has the potential to improve broadband performance for up to 360,000 customers in these areas, the company said.
