Government belt-tightening has not affected a pre-election promise to spend $1.5 billion on delivering super-fast broadband.
Speaking at an industry conference yesterday, Communications Minister Steven Joyce confirmed a commitment to a high speed broadband network capable of upload and download speeds of 100 Mbit/s - around 50 times faster than generally available today - over a 10-year timeframe.
Mr Joyce said investment in broadband infrastructure would be critical for economic growth as the country moves out of recession.
"It's the speed at which we grow after the recession that will determine the state of the taxpayers' balance sheet in 10 years' time," Mr Joyce said.
He said the historically low levels of investment in broadband infrastructure had put the brakes on New Zealand's ability to take advantage of the opportunities the technology offered. Mr Joyce said Government funding would be directed at laying "dark fibre" - the physical fibre optic network capable of carrying broadband and voice data.
"The plan is to have stuff going in the ground around the end of the year," he said.
Telecom head Paul Reynolds said he was pleased to hear the Government was still committed to its promise to spend money on fibre networks.
"We've always said it would take a Government contribution to make fibre-to-the-home viable," said Dr Reynolds.
Telecom is among a number of telecommunications players, including electricity lines companies such as Vector, interested in Government funding to improve the broadband network.
The expectation is the Government money would be matched by private sector money and Mr Joyce would not be drawn on discussing which companies would be in the best position to join with the Government on building a high-speed broadband network.