National announces rollout of ultrafast broadband to 190 towns

Prime Minister Bill English said UFB was critical for businesses in the regions. Photo / Nick Reed

Prime Minister Bill English has announced the rollout of ultrafast broadband to another 190 towns and rural areas at a cost of $270 million.

It will see the UFB network completed two years ahead of time - by the end of 2022.

English said UFB was critical for businesses in the regions, especially those focusing on technology.

The money includes $140m to extend rural broadband to a further 74,000 households and businesses and to get mobile coverage in "black spots" on stretches of state highways and tourist hotspots such as in Milford Sound, Cape Reinga and Bethells Beach.

English said the UFB rollout had gone faster than expected and the uptake was higher that estimated "which makes it one of the quiet successes of our country".

English made the announcement at Mystery Creek in Hamilton, where Mayor Andrew King thanked him for the infrastructure spending in the region on transport and schools.

English said $240m of the $270m cost would be recycled capital from the original rollout because uptake had been strong.

The remaining $30m would be from the Telecommunications Development Levy.

It is in addition to the $150m previously allocated.

Chorus will deliver the ultrafast broadband to 87 per cent of the country.

The deal will increase Chorus' peak leverage in the medium term, so it will fully underwrite its final dividend for the 2017 financial year, while it hasn't changed its 2018 guidance. Crown Fibre Holdings is funding the programme through $240m in recycled capital from earlier stages of the UFB programme and $30m from the telecommunications development levy.

"Fibre uptake across our existing UFB areas is at 35 per cent, while first time orders from addresses in our FY14-FY16 rollout areas are already about 45 per cent to 50 per cent," chief executive Kate McKenzie said. "People clearly recognise the bandwidth and performance benefits of fibre and we're pleased that New Zealand's fibre footprint will now extend to close to 90 percent of the population."

Chorus will also spend about $20m to deploy VDSL vectoring capability in rural and local fibre company areas during FY18, it said, potentially improving broadband performance for up to 360,000 customers in these areas.

Communications Minister Simon Bridges said the total $2 billion spend on communications infrastructure would put New Zealand in the top five countries in the OECD for access to high-speed broadband, up from 26th in 2011.

He said connectivity was important to businesses and tourists.

- with BusinessDesk