New Zealand telecoms giants unite for rural initiative

15 December 2010 |


Telecom New Zealand and Vodafone have made a late joint bid for the New Zealand government’s Rural Broadband Initiative (RBI), which aims to expand broadband access using a combination of fibre and mobile broadband.

The NZ$300 million (US$ 232.9 million) initiative, which is funded by the government and a new Telecommunications Development Levy, has set a target of providing fibre to 97% of New Zealand’s rural schools and delivering a minimum of 5Mbps broadband to 80% of rural households within six years. As one of five bids for the RBI, the Telecom New Zealand and Vodafone proposal brings together the country’s largest full-service telecoms company and largest mobile provider, allowing the former to focus on extending fibre infrastructure and the latter to expand wireless infrastructure.

“The need to work together to bridge the digital divide doesn’t stop with us and Vodafone – the open access fibre network we build also means others can do their part in helping extend fast broadband to as many New Zealanders as possible,” said Dr Paul Reynolds, CEO of Telecom New Zealand.

If the bid proves successful, the incumbent will be able to extend its fast broadband offering of 10Mbps and above to 92% of the country while Vodafone will be responsible for the construction of an open access tower infrastructure for wireless service providers to colocate mobile services. Both companies have also pledged to make additional investment to their networks in RBI areas.

While the combined technical capabilities of the companies is likely to be an attractive proposition to the New Zealand government, analysts are concerned that there could be potential conflicts of interests.

“The challenges facing the bid will be in relation to fibre versus wireless and also how the RBI fits in with the government’s Ultra-Fast Broadband (UFB) plan, especially in areas where the two meet or overlap,” said Paul Budde, managing director of analyst firm BuddeComm. “Currently these are separate initiatives and there is a national approach missing.”