Telecom puts forward plans for govt broadband initiative

Friday 29th January 2010

Telecom Corp., the country’s largest telecommunications company, is keen to be involved in the government’s $1.5 billion roll-out of high-speed broadband across the nation, putting forward two proposals and keeping the door open to other options.

The phone company has submitted two plans to the government’s Crown Fibre Agency, the company headed by the former chairman of the NZX and founder of ABN AMRO New Zealand Simon Allen, which will manage the government’s investment in fibre. The first plan is a fully compliant and preferred proposal pitching for a national approach to the laying of fibre, while the alternative option would allow the government to piggy-back on Telecom’s existing network.

The preferred proposal “makes the maximum use of the fibre already in the ground, assures high quality and guaranteed delivery and the absolute minimum of waste,” chief executive Paul Reynolds said in a statement. “A national approach ensures individual regions benefit from a consistently engineered and interconnected network.”

Telecom’s role in the government plan has been under the microscope since Communications Minister Steven Joyce put the contract out to tender last October and said while structural separation was up to the phone company, the government will only invest in fibre companies that aren’t controlled by shareholders who operate a retail business as well.

Earlier this week, Reynolds told the Dominion Post newspaper the costs of separating the business were costly and complex and that the board had consistently opposed such a proposal.

Reynolds said the company’s proposal would meet the needs of “all access seekers” because other wholesale and retail operators would also “drive demand for fibre to the home.”

The company is also open to alternative proposals that will meet policy makers’ goals, provided they “avoid unnecessary waste and align the incentives and investment plans of both the government and Telecom,” Reynolds said.

Telecom has been under fire this week after a major outage hindered mobile services for thousands of customers on the company’s XT network. The failure forced Reynolds to apologise and order an “urgent and independent” inquiry into XT.

The shares dropped 0.8% to $2.39 and have shed 2% since the network failure three days ago.

Businesswire.co.nz

Comments from our readers

No comments yet