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Existing fibre partners get slice of $300 mln expansion to UFB

Thursday 26th January 2017

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The four existing companies partnering with the government to build a nationwide ultrafast fibre broadband network have each got a slice of the government's $300 million expansion to the project. 

Northpower, Ultrafast Fibre, Chorus and Enable have been awarded contracts to extend the network to 151 extra towns, which Communications Minister Simon Bridges says will provide fast internet services to 85 percent of the population by the end of 2024. The extension initially sought to cover 80 percent of New Zealanders by 2022 at an expected cost of between $152 million and $210 million. 

"Phase two of the UFB build will see fibre rolled out across all mainland regions, to 151 more towns plus 43 suburban fringe areas around the larger centres which were covered by the first phase of the programme," Bridges said in a statement. "This will provide around 423,000 additional New Zealanders in both rural and urban areas, from Ruatoria to Reefton, with access to world-class broadband." 

The government campaigned on the initial $1.5 billion UFB in 2008, which ultimately saw Telecom Corp, now Spark New Zealand, carve out its network business Chorus as a standalone entity to participate in the project. Chorus won the lion's share of the contract, though Enable, Northpower and Ultrafast Fibre each secured smaller regions. 

Separately, Chorus said it will extend UFB to a further 169 regions, adding more than 200,000 households and businesses to its network. It estimates the second tranche of the build will cost between $370 million and $410 million at an average cost per household of $1,500 to $1,700. The first tranche of the network, which is more than halfway through, is expected to cost between $1.75 billion and $1.8 billion. 

Chorus said the new deal doesn't change capital expenditure or dividend guidance for the 2017 financial year. 

Ultrafast Fibre parent WEL Networks said its extension to 12 new communities will cost an extra $60 million, taking its total investment to $450 million, while Northpower's new work in 12 towns will cost another $30 million. 

Bridges said the second phase of UFB work will start this year, with each build area completed within a 12-month period " in order to provide as little disruption as possible".

BusinessDesk.co.nz

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