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Chorus to accelerate, extend UFB programme with $270M government funding

Wednesday 30th August 2017

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Chorus says it will deliver ultrafast broadband to 87 percent of the country ahead of schedule, after making a deal to receive $270 million more in government funding.

The UFB2 rollout was due to be completed in 2024, but will now be finished by Dec. 2022, Chorus said, and it will expand its fibre rollout to 54,500 "rural premises" with a total cost of $130 million. About 60 percent of the country currently have access to fibre, the government says. 

At the same time today, communications minister Simon Bridges announced the government would spend $140 million improving rural broadband and mobile coverage. A new mobile black spot fund will provide greater mobile coverage on stretches of the state highway network, as well as tourist spots such as Milford Sound, Cape Reinga and Bethells Beach, and high-speed broadband will be available to an extra 74,000 rural households and businesses.

The deal will increase Chorus' peak leverage in the medium term, so it will fully underwrite its final dividend for the 2017 financial year, while it hasn't changed its 2018 guidance. Crown Fibre Holdings is funding the programme through $240 million in recycled capital from earlier stages of the UFB programme and $30 million from the telecommunications development levy. 

"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," chief executive Kate McKenzie said. "People clearly recognise the bandwidth and performance benefits of fibre and we’re pleased that New Zealand’s fibre footprint will now extend to close to 90 percent of the population."

Chorus will also spend about $20 million to deploy VDSL vectoring capability in rural and local fibre company areas during FY18, it said, potentially improving broadband performance for up to 360,000 customers in these areas.


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