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Telecom Vodafone joint proposal chosen for rural broadband

Wednesday 20th April 2011

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A joint proposal from Telecom and Vodafone has been selected to deliver the Government's Rural Broadband Initiative (RBI).

The agreement comes after two months of negotiations on the companies' proposal for the Government's $285 million tender to provide broadband services in rural areas.

Minister for Communications and Information Technology Steven Joyce said the companies were expected to begin the roll out of RBI infrastructure in the middle of the year, with the work to be finished in the next six years.

The final contracts with Telecom and Vodafone provided for 86% of rural houses and businesses to have access to broadband peak speeds of at least 5 megabits per second (Mbps).

That compared with 20% now, and the RBI objective of 80%.

Under the agreement 154 new cellphone towers would be built and 380 exciting cell towers upgraded to enable fixed wireless broadband to rural customers, as well as improved mobile coverage.

Telecom would extend its existing fibre network by about 3100km, with some homes along the route being provided with the opportunity of fibre to the premise at urban prices, Joyce said.

Seven hundred rural schools would connect directly to fibre networks, while 48 schools would have digital microwave radio connections, equating to 95% of rural schools having access to ultra-fast broadband speeds of 100Mbps.

Wholesale prices would be comparable to urban pricing, while all competitors to Telecom and Vodafone would be able to gain access to rural broadband infrastructure funded by the Government on a non-discriminatory basis.

Telecom would extend urban-like fixed line broadband speeds to 57% of rural customers.

Mark Ratcliffe, chief executive of Telecom network business Chorus said that within the first year around 500 rural schools would be connected to fibre.

Telecom and Vodafone said they would both be making significant investments of their own to complement the $285 million of government funding.

Rural customers would have not only faster data services but also a much wider choice of technologies and suppliers for those services.

Telecom said the agreement did not cause any changes to its guidance on earnings before interest, tax, depreciation and amortisation, or on capital spending.



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