Telecom to upgrade network

9.35am

Telecom today provided more details of its billion dollar plan to upgrade its networks and build new ones over the next decade.

"We're well advanced with the work we're doing with Alcatel to roll out a totally new network infrastructure across New Zealand," chief operating officer Simon Moutter said today after the company announced a 6.3 per cent rise in its June year net profit to $754 million.

Mr Moulter promised Telecom would offer "a host of new services" over the next few years.

The company has budgeted to spend $650m in capital expenditure in 2004/5 against $608m in the year just completed.

The plans will deliver "exponentially increasing bandwidth to customers," said Mr Moulter.

Highlights of the package include:

* a $120m investment in fibre network over five years with fibre to the street curb extended to increase capacity and bandwidth of residential broadband and to enable new services including video and very high speed internet. A fibre optic pilot programme in Manukau will be extended.

* $110m will be spent to extend services based on the old copper cable network (existing phone lines) over the next three years.

* $25m a year over five years will increase the capacity of the main trunk fibre network to meet growing bandwidth demand and develop the next stage of a multi-service network which will eventually carry all Telecom's voice, data, internet and video traffic.

* Replacement of its telephone network with the replacement of its digital transmission service (ISDN). A new Alcatel exchange will be installed in Auckland to provide ISDN services in 2005.

Meanwhile, Telcom confirmed its plan to close down its 17 year-old 025 mobile network in 2007.

"We'll be working with customers between now and then to ensure they can take advantage of the benefits of upgrading to 027 (CDMA)," the company said.

Telecom has made a $110m pre-tax non-cash write-down of the value of the 025 network, a move foreshadowed earlier this year.

Mobile manager Kelin Kenrick said the closure of the 025 network would be a logical step given the development of CDMA and third generation technology.

- NZPA