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UnitedNetworks jumps into comms market

By Phil Boeyen, ShareChat Business News Editor

Wednesday 26th July 2000

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Auckland-based electricity lines and gas distribution company, UnitedNetworks, says it's serious about the communications business, and has announced plans to install, own and manage state of the art fibre optic networks in the Auckland and Wellington CBDs.

The company plans to build the new underground network as stage one of a three-stage project to progressively deliver ultra high bandwidth to the kiwi market.

It will be the first time an energy company has moved into the communications market in New Zealand, but UnitedNetwork's affiliated companies in both Australia and the United States already have experience in the field.

The company says the fibre optic networks will put New Zealand's bandwidth on a par with the rest of the world.

CEO Dan Warnock says the company is still negotiating with potential customers and is not yet ready to announce the kind of increased revenue it expects, but he says there is already plenty of interest in the network.

"In the medium term our models indicate a solid contribution to profit."

Examples of potential customers for the networks include telcos, cable TV companies and internet service providers.

Mr Warnock says initial capital costs will be around $30 million in the first two years and will be funded within existing facilities.

The network will initially be capable of delivering bandwidth of up to 1 gigabit per second, and is expected to be working by early next year. The company plans to take advantage of existing underground pipelines to distribute the fibre optic cables.

Mr Warnock says there are plans to connect the Auckland CBD directly to the Southern Cross cable, which links New Zealand with Australia, Fiji and the United States. The Southern Cross cable will increase bandwidth available to New Zealand from 0.5 gigabit to over 40 gigabits.

He says this huge improvement in speed and data capacity is projected to significantly increase the demand for bandwidth in the New Zealand market.

The Southern Cross cable is expected to be operational in November 2000.

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