Question: uniconnect ltd owns a large cable of 20 fiber strands...
UniConnect Ltd owns a large cable of 20 fiber strands that connect Melbourne to Los Angeles. A Customer enters into a 5-year contract with UniConnect Ltd to use a specified amount of capacity within a cable owned by UniConnect Ltd. The specified amount of capacity is equivalent to the full capacity of three fiber strands within the cable. The transmission of data follows a pre-determined schedule. If the fibers are damaged, UniConnect Ltd is responsible for the repairs and maintenance. UniConnect Ltd is obliged to substitute the fibers for reasons of repairs, maintenance or malfunction.
3.1 According to AASB 16 Leases, should the above contract between the Customer and UniConnect Ltd be treated as a lease contract? Discuss.