Telecom 'well-positioned to co-exist with state infrastructure'

Telecom chairman Wayne Boyd Photo / Steven McNicholl

If Telecom was unsuccessful in agreeing to an appropriate ultra-fast broadband package with the Government, it would be "well positioned to co-exist with state infrastructure too", its chairman Wayne Boyd said today.

Speaking at the company's annual meeting in Christchurch today, Boyd said Telecom already had more than 25,000km of fibre optics in operation, roughly half the total required to extend fibre to 75 per cent of New Zealand premises as intended by the Government.

"Frankly, wasting taxpayer funding and private investment on duplicating a network that is half way complete is economic madness," Boyd said.

The best solution for Telecom, the telecommunications industry, and New Zealand was for Telecom to be at the heart of ultra-fast broadband (UFB), he said.

"By extending, rather than replicating, our 25,000km of fibre Telecom can deliver more fibre, further and faster than any other participant," he said.

"Working with Telecom will also ensure the entire industry is focused on delivering New Zealand's fibre future as efficiently as possible, rather than having one of the largest private sector investors in competition with state funded infrastructure."

Under the tender process being run by government agency Crown Fibre Holdings, any telecommunications company that both owns infrastructure and sells services to end users is precluded from taking an ownership stake in any fibre that gets built under the government initiative.

So far, Crown Fibre Holdings has announced it is to start negotiations for UFB with lines companies in three regions.

At the start of August Telecom proposed a package that would result in the company being split into two separate companies - one that builds and maintains infrastructure and another that sells services to end users.

The package proposed Telecom co-invest with the Government to deliver a national fibre to the home network that met the 75 per cent coverage objective, and beyond.

Boyd said he was aware there had been some conjecture that Telecom may be doing a deal on UFB behind the scenes.

"Setting the record straight", Telecom would continue to comply absolutely with the Government's process, he said.

The company had received formal feedback on its proposals from the Ministry of Economic Development and Crown Fibre Holdings during the past two weeks.

Telecom remained open to partnership with other public and private sector owners of fibre assets, including the three parties prioritised so far for negotiation, Boyd said.

"But be assured, that should Telecom not be successful in agreeing an appropriate package with your Government, your company is well positioned to co-exist with state infrastructure too."

The fibre optic connections envisioned under the Government's UFB initiative had the potential to deliver broadband speeds ahead of where virtually all developed countries were now.

While Telecom supported the vision, demand for such astronomical speeds was uncertain, as could be seen in countries where the fibre leap had been taken, such as France and Singapore.

In part, that was why the initiative included up to $1.5 billion of taxpayer funding to stimulate the building of the infrastructure ahead of demand.

Independent reports had calculated the total cost of achieving the 75 per cent coverage at between $6b and $8b.

- NZPA