Vector 'ready now' with broadband cable

Vector says it would be ready to start rolling out cable now to fit the high-speed broadband model proposed by the Government.

Communications and Technology Minister Steven Joyce announced public-private partnerships would be established to deliver ultra-fast broadband to 75 per cent of New Zealanders within 10 years.

The broadband roll-out was a key National election commitment and it would cost taxpayers up to $1.5 billion.

The Government would establish a Crown-owned investment company, Crown Fibre Investment Co (CFIC), to handle its investments.

Under the plan, CFIC would partner companies such as Vector to provide the "dark fibre" and telcos and internet service providers would buy access to it, add their own electronics and then use it to provide a retail service.

Retail telcos will be barred from owning more than 50 per cent of one of the proposed 25 local fibre companies.

Fast broadband with speeds 50 to 100 times those of basic home dial-up could be worth $2.4 billion to $4.4 billion a year, according to Joyce.

Vector chief executive Simon Mackenzie would not be drawn on the scale of any investment but said earlier this year his company would be prepared to spend "hundreds of millions of dollars" on expanding its existing network to meet the Government's requirements.

"We're pleased the Government stuck with its vision - it's gravitated at regional solutions which we're ideally placed to deliver particularly in Auckland and some other locations."

The company was on the ground in Wellington and could partner other lines companies in the country.

In Auckland, Vector has 500km of fibre optic network already laid in the CBD and other business districts and is expanding that network by an extra 300km as part of an agreement with Vodafone.

The company now had to study details of the proposal, respond to it and if commericially viable submit proposals by mid-October.

"We could start now - it creates some good options for us to continue looking at growing," MacKenzie said.

While Vector is upbeat, Telecom was more muted.

Along with Vodafone and TelstraClear, Telecom commissioned a report which found their own investment plans would deliver broadband speeds adequate for the needs of everyday internet users without the need for a boost from the Government.

Telecom yesterday said it would now evaluate the proposal in detail.

"Telecom supports the Government's vision of delivering very high broadband speeds to New Zealanders, and we are investing $1.3 billion this year alone in improving the country's telecommunications infrastructure," chief executive Paul Reynolds said.

Forsyth Barr analyst Andrew Harvey Green said Vector had to assess downside.

"There's definitely an opportunity there for them but there's risk as well."

Unlike the energy sector there were no guaranteed, regulated returns. They would have to build the network and hope customers signed up, he said.

Vector shares closed flat at $2.28 and Telecom was down 4c, also at $2.28.

BROADBAND ROLLOUT
* The 25 centres identified range from Auckland to Oamaru.
* Typical businesses could get up to 30 megabits per second for $100 per month.
* High residential users could get 20mps, allowing streaming of three high-definition channels simultaneously.