Satellite project grounded

By PAUL BRISLEN

Telecom has ditched plans for a national satellite broadband service following its failure to secure the Government's Project Probe funding.

The Government recently awarded its provincial broadband extension tender to Auckland internet provider Iconz, which has secured a deal with Thai-based satellite operator Shin Satellite.

Shin is in the process of launching a satellite that will service New Zealand and the rest of the Pacific.

Telecom was keen to use the satellite to reach the 5 per cent of the country it cannot reach with broadband services via other means.

Now Telecom, which had also been negotiating with Shin, is ending its efforts and will direct customers interested in satellite services to its competitors, Iconz and Timaru-based provider BayCity, says Telecom's general manager of technology investment, Steven Crombie.

"We won't be servicing customers directly but will instead work with other providers to ensure they are catered for," he said. No contracts would be signed with Iconz or BayCity, but Telecom would ensure its customers were well taken care of.

"We don't want to be in the business of reselling a product so it's better for us to direct customers to these other providers."

Iconz general manager Sean Weekes said Telecom's move was a good one for Iconz and BayCity.

"There won't be a contract signed. It'll be more of an ad hoc arrangement, but it's all good news."

BayCity managing director Barry Payne said the company was on the verge of making an announcement about its relationship with Shin Satellite but was not prepared to comment until later in the week.

Iconz has signed a contract with Shin and will be offering services immediately. Shin plans to launch IP Star, one of the world's largest capacity telecommunications satellites, in February, but is already offering service via existing satellites.

BayCity is also expected to begin offering services shortly and will be targeting remote rural settlements.

BayCity originally worked with technology provider Ericsson and wireless network company BCL to provide internet services to Fonterra farmers. It has been working with Telecom since 2002 in rural New Zealand.

Shin is to spend $15 million building an earth station in Auckland to manage the satellite, which will offer service in New Zealand, Australia, India and most of Southeast Asia.

At Telecom's full-year profit announcement last month, chief operating officer Simon Moutter said he was disappointed about missing out on the Probe funding.

He said Iconz had put in a less sophisticated and cheaper proposal.