Vodafone: Let's work together

Vodafone has presented a white paper proposing a single high-speed network. Photo / Kenny Rodger

Vodafone has suggested telcos and infrastructure companies club together to invest in a single ultra-fast broadband network.

In a white paper sent to Communications and Technology Minister Steven Joyce, Vodafone has offered a model that has several companies "co-investing" to develop a single high-speed fibre network.

Firms investing in the fibre network will compete at a wholesale or retail level.

Any companies not prepared to put "skin in the game" should not have assured or regulated access to the network infrastructure, said Vodafone.

"It is critical to understand that the co-investment model will not and is not intended to produce a perfectly competitive market with minimal barriers to entry and hundreds of competitors: it is intended to resolve the tension inherent in the pursuit of both competition and investment."

Vodafone's general manager of corporate affairs, Tom Chignall, said legal action to resolve interference on its network by Telecom's XT Network had delayed the release of the discussion document, originally intended to be included in submissions to the Government on its broadband plan.

In March, Joyce called for feedback on a proposal for public-private partnerships to deliver ultra-fast broadband at a cost to taxpayers of $1.5 billion over 10 years.

Under the plan, the Government would partner private infrastructure companies to provide the "dark fibre" which telcos and internet service providers would buy access to, add their own electronics and use 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.

Chignall said there were three main challenges to the Government's fibre plan - the cost of building the network, achieving customer uptake to make the business case viable and being able to derive the right amount of revenue from customers.

"Our model deals with all three of those," said Chignall. "It gets round the table players who are keen to have skin in the game, prepared to put their money down, prepared to take risks on allthose three key areas, not just the build risk."

He said it would create a vibrant wholesale market because investors committing to take network capacity would be keen to on-sell any not used by their own retail arms.

Vector chief executive Simon Mackenzie said that while it made sense to have multiple investors, allowing companies with retail operations to invest replicated a vertically integrated model, closing out opportunities for new parties to deliver services.

Vector, which has 770 km of fibre in the ground, has indicated it was prepared to spend "hundreds of millions of dollars" expanding the network.

"Our perspective is this fibre network is not a fibre network solely for telecommunications companies," said Mackenzie.

He said content providers would be forced to use a retail channel owned by a network investor.

"It seems to go against the desire of the Government to create an open, transparent platform for people to provide products and services, not only to customers but for customers to access directly."

In submissions on the Government proposal, Telecom detailed two alternative models: a national network of ducts available to all operators deploying fibre or extending its current fibre rollout.

Telecom spokesman Mark Watts said yesterday that the company was focused on the two proposals it had on the table and looked forward to the next stage of the process.

TelstraClear corporate affairs head Mathew Bolland would not comment specifically on Vodafone's plan, only saying, "Let them row their own boat."

Bolland said it was too early for TelstraClear to count itself either in or out of investment in local fibre companies, but as it stood the structure proposed by the Government had too many unknowns.

A spokesperson for Joyce said officials were still analysing submissions with the Minister expected to report back to the Cabinet in June.