Is Chorus too big to fail?

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1168 posts

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#929456 8-Nov-2013 14:42

vexxxboy: would the public even care if UFB failed, the uptake has been way below what is possible and most people are happy with what they have, when the average usage has just gone from 20 GB a month to 40 Gb a month do people really need UFB as much as the government says they do.

That's the second part of the question. Today, we probably don't need UFB. We almost certainly will need a UFB, if not the UFB in the proposed form. But we don't know what we would use it for as yet. So, how to we convince people, including ourselves, that building it is probably a good idea now?

Much like when the Auckland harbour bridge was built it didn't need the clip on lanes and nobody probably even mentioned a rail line. With the wonders of hindsight we can imagine how much easier it would be to get around Auckland if these things had been considered before they were actually needed.

How can we use the lesson here make sure we don't make the same mistake with the UFB?

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gundar

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#929457 8-Nov-2013 14:42

I was surpised to read they have made a shareholder dividend this year, so it doesn't sound like there's no coffee in the staff room, yet.

Like has been mentioned, it does seem to be an NZ thing to create smoke screen and cry poverty until there is more free money....

mattwnz

20164 posts

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#929528 8-Nov-2013 15:39

gundar: I was surpised to read they have made a shareholder dividend this year, so it doesn't sound like there's no coffee in the staff room, yet.

Like has been mentioned, it does seem to be an NZ thing to create smoke screen and cry poverty until there is more free money....

I don't see why not, as any shareholder needs a return on their investment, especially with a utility share, where you expect a regular return, and they are less likely to have much stock growth. Otherwise why would anyone invest, you may as well put your money in the bank. This is the reason why the stock price has dropped like a stone. Companies also borrow money in order to pay out dividends.

greenbone

176 posts

Master Geek

#929532 8-Nov-2013 15:42

andrewNZ: No company is too big to fail.

some companies are too big to fail. obvious example being banks

they would (and have) receive government assistance to prevent them from failing. aka bailouts

mattwnz

20164 posts

Uber Geek

#929535 8-Nov-2013 15:47

greenbone:
andrewNZ: No company is too big to fail.

some companies are too big to fail. obvious example being banks

they would (and have) receive government assistance to prevent them from failing. aka bailouts

Probably only the very big banks. Also NZ is now one of the only countries in the OECD without a deposit guarantee, so there is no guarantee that the gov would bail them out. I believe in NZ they can now take a percentage of a persons savings to keep the bank going.

Batman

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#929602 8-Nov-2013 17:10

I better get my ufb before they shut shop

SaltyNZ

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#929616 8-Nov-2013 17:30

The bottom line is that Chorus knew the review was coming; it was part of the contract they agreed to when they put their hand out for a big chunk of my tax money, which will not go towards supplying me with any fibre services. If they gave out a big dividend knowing they had a potentially large cost coming up then their management are either incompetent or deliberately attempting to extort more money.

Either way, not a good look.

I also don't buy the argument that a lower copper price will hinder takeup and slow rollout of UFB. If that is anything but a strawman argument then here's a good idea: lower the prices in places where is NOT UFB, and put it back up where there IS.

Chorus has an incentive to hurry the hell up, and subscribers have an incentive to switch. Problem solved.

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ubergeeknz

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#929645 8-Nov-2013 18:07

SaltyNZ: The bottom line is that Chorus knew the review was coming; it was part of the contract they agreed to when they put their hand out for a big chunk of my tax money, which will not go towards supplying me with any fibre services. If they gave out a big dividend knowing they had a potentially large cost coming up then their management are either incompetent or deliberately attempting to extort more money.

Either way, not a good look.

I also don't buy the argument that a lower copper price will hinder takeup and slow rollout of UFB. If that is anything but a strawman argument then here's a good idea: lower the prices in places where is NOT UFB, and put it back up where there IS.

Chorus has an incentive to hurry the hell up, and subscribers have an incentive to switch. Problem solved.

EXACTLY. Them acting all surprised is just that, acting. It's no surprise and has always been planned. I'm also pretty sure making misleading press releases as a listed company is illegal to boot.

oxnsox

1923 posts

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#929688 8-Nov-2013 20:00

SaltyNZ: The bottom line is that Chorus knew the review was coming; it was part of the contract they agreed to when they put their hand out for a big chunk of my tax money, which will not go towards supplying me with any fibre services. If they gave out a big dividend knowing they had a potentially large cost coming up then their management are either incompetent or deliberately attempting to extort more money.

Either way, not a good look.

I also don't buy the argument that a lower copper price will hinder takeup and slow rollout of UFB. If that is anything but a strawman argument then here's a good idea: lower the prices in places where is NOT UFB, and put it back up where there IS.

Chorus has an incentive to hurry the hell up, and subscribers have an incentive to switch. Problem solved.

Yes, but......
This ruins my plan of getting better performance out of the (lower cost) copper network as folk around me free up the bandwidth as they switch to the fibre that's now in my street!!

But yes. The gvmt. did get a good deal. Contractors believed they'd be able to 'buy' the contracts and make up losses on the variations, but they haven't been able to work that angle. Chorus will continue.... we're just seeing the politics of Business meshing with the business of Politics.

networkn

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#929690 8-Nov-2013 20:05

Man I hear a lot of ME ME ME ME ME ME in this thread. Apparently in NZ we no longer care what is in the best interest of NZ as a whole.

Bobdn

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#929782 8-Nov-2013 22:50

http://www.stuff.co.nz/business/opinion-analysis/9378963/Weighing-in-on-the-UFB-debate

I thought this was a pretty good article. I feel for the Chorus investors who were probably looking for a reasonable return on a boring investment. It's not easy investing in our small country, there's not a huge amount of choice.

Most of all I fear where this thing could end up. Chorus was making great progress. In comparison the Australian UFB project has stalled. If the momentum for UFB slows now it could be decades until it's finished, if ever.

greenbone

176 posts

Master Geek

#929794 8-Nov-2013 23:35

have you seen light green pedestals similar to this around auckland? mainly in remuera, pakuranga and howick

they were installed in the 90's as the beginnings of a fast fibre network, an overseas initiative to launch new internet, phone and cable tv services in new zealand

soon after large areas of the network were completed (i was involved in hauling the FO cable), telecom got wind of what was going on. guess what they did? bought out the competitor, and mothballed the entire project. rather than try to compete, or improve their own services, or even use what had been completed to kickstart their own fibre network, they just shut the entire thing down and left it dormant in the ground. of course, they had a monopoly on copper at the time, so why would they improve anything if they didnt have to?

so in my opinion, if chorus is struggling with UFB, i say let them suck eggs ... bring in another contractor ... we shouldve had something resembling UFB years ago

sbiddle

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#929830 9-Nov-2013 07:45

greenbone: have you seen light green pedestals similar to this around auckland? mainly in remuera, pakuranga and howick

they were installed in the 90's as the beginnings of a fast fibre network, an overseas initiative to launch new internet, phone and cable tv services in new zealand

soon after large areas of the network were completed (i was involved in hauling the FO cable), telecom got wind of what was going on. guess what they did? bought out the competitor, and mothballed the entire project. rather than try to compete, or improve their own services, or even use what had been completed to kickstart their own fibre network, they just shut the entire thing down and left it dormant in the ground. of course, they had a monopoly on copper at the time, so why would they improve anything if they didnt have to?

so in my opinion, if chorus is struggling with UFB, i say let them suck eggs ... bring in another contractor ... we shouldve had something resembling UFB years ago

Umm.. Not quite true. Exactly the opposite infact.

That pedestal is one of the Telecom First Media ones. It's a network deployed by Telecom - they didn't buy anybody out or shut anybody down.

Telecom deployed a HFC network in parts of Auckland and Wellington following behind Kiwi Cable who had deployed HFC on the Kapiti Coast and were expanding into Wellington (and then changed their name to Saturn). The trial network deployed cable modems and TV but with ADSL just around the corner the business case for deploying a nationwide HFC network simply didn't stack up and the project was scrapped. There is no conspiracy anywhere!

Like the Vodafone HFC network the vast majority of the network is actually copper - it's fibre to the node and then coax past each house. All the pedestals like the one above only contain coax in them.

crackrdbycracku

1168 posts

Uber Geek

#929872 9-Nov-2013 10:31

Just watched The Nation.

It seems Amy Adams thinks Chorus is to big to fail. I'm going to bet the 'independent' advice is going to back up the position she alluded to, that the government will have to intervene.

Sadly the best the Coalition for Fair Internet Pricing could do was say people would sign up for UFB because of the 'new services' not even an attempt to describe what such services might be or why we would want them.

Without this vision we fall back on price of copper vs price of fibre.

Disappointed we can't have a proper national debate about this. The best dialogue is here, as usual.

Didn't anybody tell you I was a hacker?

andrewNZ

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#929883 9-Nov-2013 10:52

The government focuses on services and money. Even most the smart politicians have very little clue about technology beyond facebook and ipads.

I have nothing good to say about Miss Adams. She's so scared of making mistakes that she avoids things, and when she's forced to do something, she's goes for safe rather than right.

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