Chorus dumps Downer for Visionstream in Wellington

Need to speed up UFB installations cited.

Chorus [NZX: CNU] has dumped UFB contractor Downer for fibre installations in Wellington, Kapiti Coast and Manawatu.

Visionstream will take over work in Wellington and the Kapiti Coast on May 16, and Manawatu from May 30.

"We need to make changes to ensure consumers are connected to fibre much quicker than is currently the case,” says Chorus customer services general manager, Nick Woodward.

 The E Tū union says up to 100 jobs could be lost in the transition.

Chorus says after Downer's firing and Visionstream's hiring, it expects a net gain in UFB installers in the region.

Spokesman Nathan Beaumount refused to answer a question about Visionstream's rate per-premise compared to Downer, citing commercial confidentiality.

"This change will allow Downer to focus on its performance in Hutt Valley and Wairarapa," Mr Woodward says.

“We’ve been open about our need for more technicians, and how we want to retain skilled people in the industry. Visionstream’s operating model has proven to be very effective in attracting new crews and in getting through the most jobs in a day.”

Chorus recently told NBR its customers faced a median wait time of 22 days for a standard UFB install, 99 days for a mixed dwelling unit and 104 days if down a right-of-way.

At the company's interim result announcement in February, Chorus chief executive Mark Ratcliffe said the industry would need double the number of UFB installers by mid-year as demand for fibre takes off. Analysts see no major impact on Chorus' capex, given contractors bear the costs of recruiting more technicians. However, one analyst notes, "The near-term challenge for Chorus is demand is happening a lot faster than predicted which changes the capital profile, and the demand for installers."

Visionstream is Chorus’ long-term partner in Auckland, and has also recently started doing fibre installations in Porirua. This has resulted in a noticeable improvement in the time it takes to connect consumers to fibre in Porirua.

Downer will continue connecting consumers to Chorus’ fibre network in the Hutt Valley, Wairarapa, Napier, Hawke’s Bay, Gisborne and the South Island, including Christchurch, South Canterbury and Otago.

Downer will also continue to manage Chorus’ copper network in the lower North Island and lower South Island, Chorus says.

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