Telecoms competition hots up

By CHRIS BARTON, IT editor

Lines company Counties Power will inject extra competition into Auckland's telecoms market after yesterday winning a Government contract to provide a high-speed wireless internet network in the region.

The deal means there will be three competing networks in Auckland - Counties, Woosh Wireless and Telecom - as well as the separate CBD fibre-optic cables laid by Vector, Citilink and TelstraClear.

Counties, based in Pukekohe, will spend $15 million in the next year to expand its broadband network.

The contract is part of the Government's Provincial Broadband Extension (Probe) project to ensure that provincial communities and schools have access to high-speed internet.

All but one of the 14 regional contracts have been awarded. A partnership of Telecom and BCL has won seven, Woosh/Vodafone four, Nelson firm ThePacific.net one and Counties Power one.

Otago and a national "region 15" serviced by a satellite provider are still to be determined.

Other than the $2 million awarded to Southland, the Government has yet to announce subsidies for any of the other regions. The Probe project is believed to have a $30 million budget.

To meet the project requirement of providing video-capable fast internet to all schools, Counties' network expansion will begin in the outer areas of Auckland, especially Franklin and Rodney districts where 45 schools cannot get broadband.

The network will then expand into Waitakere, Manukau and other remote parts of Auckland where schools lack high-speed internet access.

By the end of next year, about 50,000 households in the Greater Auckland region should have fast internet access and voice services, says Probe manager Tony Van Horik. That is in addition to the 35,000 served by Counties' Wired Country network covering Pukekohe, Waiuku, Tuakau and Papakura.

Residents in those areas can already access fast internet starting at 1 megabit a second - twice as fast as the minimum speed requirement of Probe - from a variety of retailers who sell services on the network.

Prices are also much cheaper than Telecom and Woosh. Cut-price toll provider WorldxChange said last month it would begin offering in November a combination of voice and broadband services - bypassing Telecom's network - for $80 a month.

Van Horik said that in assessing Counties' bid, he was impressed with its open network access model.

"It lets a range of providers provide value-added services on the network, giving much more choice. That's something we want to encourage."

Counties Power chief executive Neil Simmonds said winning the Probe tender was a great endorsement of the company's business plans.

"We thought we could offer value to the community that was better than any other option, which is why we were quietly confident."

He said stage one of Counties' network, which cost $21 million, would be profitable by 2005.

The company had arrangements to work with Auckland lines company Vector, but plans for expanding the network to cover all of Auckland had not yet been put to the board.

The Government also awarded two Probe tenders for the West Coast and Manawatu/Wanganui regions to Telecom.

Van Horik said that even though the stimulation of broadband competition was a key aim of Probe, it did not make sense from both a financial and practical viewpoint to have a competing provider to Telecom in those regions.

That was because of the difficult terrain, coverage area and lack of suitable cabling.

"If we started putting in non-viable competitors willy-nilly, no one is going to win that game."