Telecom and Vodafone team up for rural broadband bid

Friday 12th November 2010

Telecom and Vodafone New Zealand, New Zealand's two major mobile operators, today submitted a joint bid for the $300 million rural broadband initiative.

The RBI looks to provide fibre to 97% of rural schools and a minimum 5 mega bits per second broadband service to 80% if rural households in the next six years, with today being the final day for submissions.

The two companies will look to combine their resources to build a new, open network infrastructure that will extend Telecom’s existing fibre infrastructure to key rural points and allow Vodafone to provide high speed broadband services wirelessly.

"By collaborating our companies are showing that the telecommunications industry is working for the good of New Zealand to deliver a solution that will accelerate the commercial success and social connectivity of New Zealand's rural and regional communities, employing fixed and mobile technology,"Telecom chief executive Paul Reynolds said.

The network will be built with open access on both the fibre and wireless components, letting any party to offer a retail service over the new infrastructure.

Under the proposal Telecom will be responsible for building fibre to schools and hospitals, cell sites, and rural exchanges and cabinets, while Vodafone will be tasked with designing and buildings the open access tower infrastructure that Vodafone and Telecom XT will co-locate their mobile services on.

“Wireless is now recognised internationally as playing a critical role in reaching rural areas, where it is the most efficient way to deliver high speed internet access,” Vodafone chief executive Russell Stanners said.

Last year Vodafone announced it entered into a closer partnership deal with communications company Farmside to deliver rural broadband via satellite.

The Ministry of Economic Development is expected to announce the winner of the RBI tender by Christmas, according to the statement.

Telecom added that the bid, if accepted, is unlikely to have any material impact on its earnings or capital expenditure guidance.

Shares in Telecom fell 0.9% yesterday to $2.16.

Businesswire.co.nz

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