Telecom NZ to participate in national broadband network build out

15 January 2011 |

Telecom Corp of New Zealand (Telecom NZ) has been chosen as a preferred bidder to participate in the building of the country’s national broadband network, overturning its apparent exclusion from the process.

If Telecom NZ’s bid is successful, the incumbent could end up building and operating around three quarters of the NZ$3 billion (US$2.2 billion) network. Crown Fibre Holdings (CFH), the government agency that is overseeing the bidding process, has said that Telecom NZ is now in the frame to lay fibre in at least 23 of the 28 regions the project has been divided into, having met requirements on access pricing and on working within the government’s allocated budget.

Fibre network operators Northpower and WEL Networks have already been chosen to supply 16% of the infrastructure between them. Another preferred bidder, Alpine Energy, is still in negotiations with CFH.

The network, when complete, aims to bring high-speed internet access to at least 75% of New Zealanders, the government has promised.

Telecom NZ’s chief executive Paul Reynolds has indicated he is prepared to go into partnership with other network operators if that would help to lower costs for both parties.
This represents a turnaround from September 2009, when the telco appeared to have been frozen out of the bidding process. At the time, Reynolds said the company might end up competing with the national project with its own fibre and copper hybrid network. Last month, Telecom NZ also indicated it could work with Vodafone to extend broadband reach of both fixed and mobile services to rural areas as part of the government’s Rural Broadband Initiative.