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Auditors Called in to assess Chorus' financial position

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New Zealand's landline major, Chorus is to have its financial position audited by Ernst & Young Australia, the government has announced.

Communications and Information Technology Minister Amy Adams said that the audit will investigate Chorus' capability to deliver on its contractual commitments with the Government, in light of the Commerce Commission's decisions on final wholesale prices for copper-based broadband services.

Chorus was spun off from Telecom New Zealand in 2011, as a result of shareholders approving the demerger of retail and infrastructure divisions following state-sanctioned local loop unbundling in 2006.

The company is currently undertaking installations of fibre optic cables in New Zealand's urban centres as part of the Government's Ultra-Fast Broadband Initiative.

The independent assessment has been commissioned to provide the Government with a detailed analysis of the impact on Chorus of the recently announced determinations of the Commerce Commission and its ability to meet its Ultra-Fast Broadband (UFB) and Rural Broadband Initiative (RBI) contractual obligations through internal adjustments.

It will also distinguish between the impact of the Commerce Commission's pricing decisions and any strategic choices that Chorus may have made which may contribute to any financial stress it could face.

The review is expected to be completed before the end of the year.

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