NI cities first to be connected to broadband scheme

Photo / Thinkstock

Five North Island cities will be among the first to benefit from the Government's $1.5 billion scheme to deliver ultra-fast broadband to 75 per cent of New Zealand.

Crown Fibre Holdings (CFH), the entity set up to manage the Government's investment, said today it had concluded negotiations with Northpower Limited and the WEL Networks owned Ultra Fast Fibre Limited and will begin work in the next two weeks.

The cities of Hamilton, Tauranga, Whangarei, New Plymouth and Wanganui
will be among the first to benefit from the roll out of ultra-fast
broadband (UFB), Minister for Communications and Information
Technology Steven Joyce said.

The announcement confirms earlier flagged short-listed deals for the regions, and though Telecom has expressed disappointment as it pitched for a nationwide solution, it is still in the hunt for the Auckland fibre roll-out and hasn't ruled out partnering with other successful bidders. Today's announcement made no mention of Alpine Energy, which was put in the box seat to win Timaru.

Northpower is expected to begin its roll out in Whangarei before Christmas with Ultra Fast Fibre to begin laying fibre early in 2011.

The new companies will also roll out fibre in Cambridge, Te Awamutu, Hawera and Tokoroa with a completion date of 2015 for all work by both companies.

The joint ventures represent nearly 16 per cent of UFB premises.

Joyce said wholesale household prices would start at $40 or less per month for an entry level product and $60 per month for the 100 Megabit product.

There would be no connection charges for households, he said.

CFH is expected to shortly announce a list of parties which have been successful in the remaining 25 ultra fast broadband regions.

Telecom has already said it plans to split off its network arm, Chorus, as part of its proposal to join the scheme and today reiterated its plans.

"We are firmly of the belief that a structurally separate Chorus as the cornerstone of a national framework for fibre is the most efficient and effective way to deliver the government's fibre vision and that is reflected in our proposal," Telecom's chief executive Paul Reynolds said.

"We are also open to partnership with other public and private sector owners of fibre assets, including the parties selected as CFH's partners, where partnership can improve the overall economics of a national solution to deliver fibre further and faster for New Zealand," he said.

Reynolds said today's announcement confirmed Crown Fibre's "previously indicated intention in these areas".

"Telecom's proposal is focused on the remainder of the country," he said.

The UFB objective is to deliver internet download speeds of at least 100Mbit/s, and uploads of at least 50Mbit/s - speeds which are up to 50 times faster than today's typical broadband services.

For its money, the Government wants to see affordable services, a "significant contribution to economic growth" and avoidance of both "lining the pockets" of existing broadband providers and of duplicating their networks.

- NZ HERALD ONLINE/ BUSINESSDESK