Vector mulls future in telco services

By CHRIS DANIELS

Vector, New Zealand's largest power lines company, is studying an ambitious expansion of its telecommunications business with a plan to install fibre-optic links in every home and business on its network.

Although the trust-owned company has yet to commit to the scheme, a team of its executives are in Europe looking into new technology, including "fibre to the home" systems. Their trip includes a meeting with Swedish telecoms equipment maker Ericsson.

Rolling out a regionwide fibre network would cost hundreds of millions of dollars and provide a new method of providing cable TV, plus full telecoms services, including broadband internet access.

Vector could use its existing lines, both overhead and underground, to run out fibre-optic cables into each house on its network.

Both Vector and TelstraClear, a natural partner in any fibre-to-the-home scheme, are playing down the study, saying no decisions have been made and stressing that they are talking to many other companies.

"There is simply no partnership with TelstraClear," said Vector spokeswoman Charlene White.

There was still a lot of work to do "in order to understand the technology" before any decisions were made, she said.

Vector owns the local powerlines across the Auckland region and in Wellington and has 42 per cent of all New Zealand's electricity connections. It also owns a fibre-optic network in downtown Wellington and in Auckland, catering for business customers.

To free itself from reliance on wholesale contracts with Telecom, TelstraClear needs some way of getting into homes and businesses across the Auckland region.

Attempts to allow wider access to the local loop - Telecom's copper wire network linking individual customers with telephone exchanges - failed last year, when Telecommunications Commissioner Douglas Webb decided not to "unbundle".

This decision has still be reviewed by Communications Minister Paul Swain.

More pressure on the minister came yesterday from the Auckland Chamber of Commerce, which released details of a survey conducted of its members.

Ninety-three per cent said they would be more likely to use more telecommunications services if they were better priced or marketed.

TelstraClear initially tried to build its own fibre-optic network, but public concern about the unsightliness of stringing new cables on existing overhead powerlines saw the plan quietly shelved.

The company says new technology would mean much less visual pollution from fibre-optic cables.

TelstraClear would be unlikely to make any serious commitment to a fibre-to-the-home network with Vector while access to the local loop was still being decided.

"Local loop unbundling is an important question. The economics of fibre-to-the-home is also important," said Kevin Millar, head of change at TelstraClear.

"We are raising our sights on investing in ways that we can bring more competition to more customers.

"If someone like a Vector or someone else was to make that possible, you'd see a lot of investment."

The company's business strategy was to be "access agnostic" - where it did not care which method was used to reach customers.

In some areas it might be through a wireless system, in other parts it would be through Telecom's network.