Telco rivals to press on with fibre networks

Telecom will split from its network arm, Chorus, which will become a separate listed company and be responsible for Telecom's portion of the fibre rollout. Photo / Supplied

Fibre companies around the country will compete - and collaborate - with Chorus as it builds 70 per cent of the Government's ultra-fast broadband network.

On Tuesday, Communications Minister Steven Joyce awarded the remaining broadband contracts, with Telecom scooping up Auckland, the east and lower North Island and most of the South Island.

Christchurch's Enable Networks won Government funding to lay fibre in Christchurch, Rangiora, Kaiapoi, Woodend, Lincoln, Prebbleton and Rolleston.

The contracts for the central North Island and Whangarei were given in December to WEL Networks and Northpower respectively.

As part of its deal with the Government, Telecom will split from its network arm, Chorus, which will become a separate listed company and be responsible for Telecom's portion of the fibre rollout.

The new company will receive $929 million of the Government's $1.35 billion investment in the scheme.

Vector, which lost out on contracts for the lucrative Auckland leg, said on Tuesday it was confident it would continue to operate a competitive business.

However, Vector refused to comment on whether it would look to expand its own network to rival Telecom's fibre.

Other companies said they would continue laying cables in the ground, despite missing out on Government money.

Chief technology officer of Wellington's CityLink, John Heard, said the internet firm would continue its broadband build.

"We've been [laying fibre] for 15 years so we're going to continue and that is going to be true for most of the fibre operators. There's always a need for adequate competition," he said.

Unison Group, which was part of a consortium bidding against Telecom for North Island contracts, said it would also trudge on with its broadband rollout.

"Unison was already well advanced with over 140km of fibre rolled out across Hawkes Bay, Taupo and Rotorua. We are strongly positioned to deliver even more for business [customers] and our fibre network is opening the door to greater competition and opportunity," chief executive Ken Sutherland said.

Both Unison and CityLink indicated they would limit their fibre rollout to commercial customers and would not extend it to residential areas.

New Zealand Regional Fibre Group, which represented a number of smaller broadband bidders, said some members may collaborate, rather than compete, with Chorus.

Telecom confirmed yesterday that a newly formed Chorus would be willing to work with other providers, including those that bid against it.

"There's plenty of options. We'd be happy to talk with anybody to see if we can work together to mutual benefit. If it makes sense for both parties, then why wouldn't you do it?" said Telecom spokesperson Ian Bonnar.

Enable Network's acting chief executive, Malcolm Campbell, said it had already discussed working with Chorus to lay fibre around Christchurch.

When it splits, Chorus will have a completely new corporate structure, chaired by Telecom director Sue Sheldon and led by a newly appointed chief executive. Chorus boss Mark Ratcliffe is an obvious candidate for the job, but is not guaranteed the position.

Telecom shares rose another 5c yesterday to $2.48.5 after surging 15.5c on Tuesday.