Whangarei will be first centre to get ultra-fast broadband

Broadband internet and telecommunications equipment inside the Mt Albert exchange, Auckland. Photo / Kenny Rodger

The Government's $1.5 billion ultra-fast broadband scheme will begin in Whangarei this year.

The city is among the first five for which contracts to lay fibre-optic cable have been concluded in an initial $200 million deal.

But although Communications and Information Technology Minister Steven Joyce hoped contracts for the remaining 25 areas would be settled before next year's election, he was unable to say when the Auckland contracts would be finalised or how much the public could expect to pay.

Mr Joyce yesterday said Northpower had won the Crown Fibre Holdings contract to install and operate a fibre network in Whangarei, and Ultra Fast Fibre Ltd won contracts for Hamilton, Tauranga, New Plymouth and Wanganui as well as Cambridge, Te Awamutu, Hawera and Tokoroa.

The work is scheduled for completion by 2015.

Mr Joyce had promised the the first fibre would be laid in the ground before the end of the year and yesterday said Northpower would begin doing so before Christmas.

Limited new services would be available before the new year.

He said Crown Fibre Holdings would soon announce with whom it would negotiate contracts for the remaining 25 regions including Auckland. He hoped all would be signed before next year's election, would not give a more definite timetable.

He said Crown Fibre Holdings could finalise contracts quickly, but it was taking its time with negotiations to ensure the best deal for the taxpayer and the Government.

Mr Joyce said wholesale household prices would start at $40 or less a month for a 30 megabits per second (Mbps) entry level product and $60 a month for a high-end 100 Mbps product. Those prices would serve as informal benchmarks for other deals.

He did not wish to try to estimate what retail prices would be. But he understood the entry-level wholesale price revealed yesterday was on a par with wholesale prices for services over the old copper network.

Telecom, which still hopes to win at least some of the remaining UFB contracts, has a basic broadband package with theoretical speeds of up to 24 Mbps at $41 a month.

"For similar prices to what they [customers] are paying currently, they're getting vastly faster service both at the base level and premium products," said Mr Joyce.

IDC telecommunications analyst and commentator Rosalie Nelson said retail pricing for the new services was "the multimillion-dollar question".

Prices would depend on several factors including whether local phone services were included in packages, the cost of transporting data beyond the local fibre network and the cost of equipment for service providers and home users.