Network owner determined to keep hold of fibre assets

By PETER GRIFFIN and CHRIS DANIELS

Lines company Vector says it has no plans to sell its fibre-optic-based communications network and hopes to have a business strategy in place for its future in the next six months.

Vector's management team held a planning meeting a couple of weeks ago and considered 10 potential strategies for the communications network.

Vector has a fibre network running parallel with its electricity lines in the Auckland business district, heading south through Manukau and Papakura - a total of 950km of cable.

UnitedNetworks, too, has extensively cabled the Auckland CBD and parts of inner-city Wellington.

The sale of UnitedNetworks to Vector generated speculation that Vector would spin off its communications assets and possibly divest ownership.

Vector's new chief executive, Mark Franklin, said the company would not sell the fibre, but its strategy for communications had changed greatly from when both Tangent and United Networks had built their networks.

"Both companies had pretty significant plans in telecommunications, that was like three years ago when the whole thing was just blue-sky," said Franklin.

Both Tangent and United Networks have been offering bandwidth-on-demand services to businesses in the Auckland central business district and, in United's case, parts of central Wellington.

Originally the plan was for Vector to become a significant reseller of communications services and spread network coverage.

"I'm not saying I'm going to be a major competitor to Telecom, or even TelstraClear," said Franklin.

But the company had significant assets that could be used in conjunction with partners and develop a telecommunications "niche".

He said the future for the fibre infrastructure would be certain in about six months.

"We will have merged the two entities and had our discussions with potential partners in the marketplace and started to reformulate a proper strategy," he said.

Franklin added that maintaining ownership of the fibre network was of strategic importance to Vector's lines business.

"A lot of our assets have remote communications, we own our own telecommunications assets just to manage our own assets."

TelstraClear wants to extend fibre to Auckland's suburbs using Vector's lines infrastructure.

But Vector has resisted the move, claiming an agreement between TelstraSaturn and Vector's predecessor, Mercury Energy, is no longer valid.

The matter is still to go before the courts.