Commerce Commission releases draft RAB decision for Chorus’

Chorus Limited
Level 10, 1 Willis Street
P O Box 632
Wellington
New Zealand

Email: company.secretary@chorus.co.nz






STOCK EXCHANGE ANNOUNCEMENT

19 August 2021

Commerce Commission releases draft RAB decision for Chorus’ fibre business

The Commerce Commission has released a draft decision proposing an initial
regulated asset base (RAB) of $5,427 billion for Chorus’ regulated fibre business from
January 2022. The Commission’s draft RAB is made up of core fibre assets of $3,980
billion and a financial loss asset of $1,446 billion.

In March, Chorus proposed a conservative starting RAB of $5.5 billion based on
extensive modelling work by international experts Analysys Mason. The Commission
used this RAB value to inform its draft Price-Quality decision on 27 May that
referenced an annual revenue range of $689 million to $786 million, including pass-
through costs, for the 2022 to 2024 regulatory period.

The Commission has noted in its draft RAB decision today that “If all other aspects of
our draft PQ decision remained unchanged, our indicative estimate of the combined
impact of these decisions would lead to a 2%-2.5% reduction in allowable revenue
over the PQP1 period. This figure also includes the impact of updated WACC values
applied in the pre-implementation period.”

Chorus made submissions on the draft Price-Quality decision in July, with strong
evidence to support changes to the Commission’s proposed reductions in allowable
operating and capital expenditure.

Chorus CEO JB Rousselot said Chorus will be analysing the detail of today’s
announcement and will make submissions based on its extensive modelling work.

“We welcome this step towards greater certainty for Chorus and our investors. Our
aim is to ensure the final RAB reflects the full costs of structural separation required
by the public-private partnership with the Government. We’ve used a lot of our
existing infrastructure and spent billions more to rollout the fibre network over the
last decade. It’s critical that the true value of our participation in this partnership is
recognised so we can keep investing in developing the capability and reliability of
fibre broadband for New Zealand.” he said.

The Commission is expected to give its next decision on the RAB in December.

Chorus will report its FY21 results on Monday 23 August.



Authorised by:

David Collins
Chief Financial Officer

ENDS

For further information:

Brett Jackson
Investor Relations Manager
Phone: +64 4 896 4039
Mobile: +64 (27) 488 7808
Email: Brett.Jackson@chorus.co.nz

Steve Pettigrew
Head of External Communications
Mobile +64 (27) 258 6257
Email: Steve.Pettigrew@chorus.co.nz