Canadian firm teams up with Vodafone in broadband bid

Vodafone chief executive Russell Stanners said mobile companies are one of the biggest users of fibre in the world. Photo / Paul Estcourt

Vodafone has formed an alliance with Canadian fibre grid operator Axia that will bid for a slice of the Government's $1.5 billion ultra-fast broadband project.

Axia will bid for national funding to create one single network that service providers such as Vodafone can plug into and distribute ultra-fast broadband to customers around the country.

The company will not be in competition with providers such as Vector, which has bid for Auckland, as it aims to build a New Zealand-wide network and not focus on one specific region.

Vodafone, through Axia, will be able to connect customers around the country to the single broadband network, a layer that will sit on top of the fibre infrastructure.

Axia plans to use fibre that has already been laid, owned by companies such as Telecom, TelstraClear and Vector.

Telecom owns about 25,000km to 30,000km of fibre throughout New Zealand. It would not comment on whether it plans to work with Axia but did state in a media release this year it was open to discussing alternative proposals.

Axia has built similar networks in Singapore, France and Canada.

Vodafone chief executive Russell Stanners said mobile companies are one of the biggest users of fibre in the world.

"Of all the countries in the world, New Zealand stands to benefit the most from building a next-generation network. We are remote from our markets, we have a small population but we think smarter, we work harder to develop our intellectual property."

Stanners said the "tyranny of distance" has been a major speed bump in New Zealand's economic progress and now, through ultra-fast broadband, the country has an opportunity to change that.

Axia chairman Art Price said rural areas had been compromised by a lack of access to fast broadband.

He said the outcome of the project would be higher performance broadband at a similar cost structure to today, so customers would pay the same but for superior quality.

Price said ultra-fast broadband would improve rural communities access to education, health care and security services such as police. Rural New Zealand had been left behind on these services and the future of business lay in ubiquitous digital access.

The strength of Axia's bid lies in its flexibility and its national outlook, he said.

Vector chief executive Simon MacKenzie said the company had a positive relationship with Vodafone but before any deals could be struck "it would have to stack up commercially".

However, MacKenzie said the company was open to discussion and that Axia's bid provided "healthy" competition.

Ultra-fast broadband is expected to provide download speeds of 100 megabits per second (Mbps).

The Government's investment will take 10 years to roll out to 75 per cent of the country's population. That spending is expected to be at least matched by private sector funding.

WHO IS AXIA?

* Founded 15 years ago in Alberta, Canada.
* Established to develop high-performance, fixed-fibre grids.
* Publicly listed on the Toronto Stock Exchange.
* Market capitalisation of C$122 million.
* 121 employees in Alberta.
* Works with governments to provide broadband solutions.
* Competition is usually incumbent telcos.