Telstra goes after NZ Telecoms market

Australian national telecommunications carrier Telstra is to set up a $NZ1 billion ($US491 million) joint venture in the New Zealand telecommunications market, intensifying its battle with Telecom New Zealand for regional dominance.

Late last year, Telecom New Zealand took a majority stake in Australia's third-largest telecommunications company, AAPT, as its first serious play in the Australian market.

Now, Telstra will merge its New Zealand operations with Saturn Communications, a local subsidiary of broadband network specialist UnitedGlobalComms to form a joint venture called Telstra Saturn, Telstra said in a statement.

The joint venture has committed to investing more than $NZ1 billion over five years to create a national broadband network in New Zealand, Telstra said.

The submarine fibre-optic backbone will link New Zealand's three largest cities of Auckland, Wellington and Christchurch, and bypass Telecom New Zealand's network as an effective way to provide open competition, Telstra said.

Saturn has already established a hybrid fiber-coaxial cable network past 100,000 homes in the New Zealand capital Wellington. It has achieved over 25 percent penetration in local telephony, 20 percent penetration for pay TV and 10 percent penetration for Internet service, Telstra said.

The merger, expected to be finalised next month, keeps the Australasian telecommunications market in a state of flux.

Apart from Telstra and Telecom New Zealand, the largest telecommunications company in the region is Australia's C&W Optus, whose parent company Cable & Wireless PLC has been rumoured in local media to be looking to off-load its 52.5 percent stake.

These rumours were denied by C&W Optus Chairman Ralph Robins in a meeting last week with institutional investors.

New Zealand's other main player is Clear Communications, a wholly-owned subsidiary of British Telecommunications PLC, which will soon embark on a $NZ120 million upgrade to its nationwide digital network.

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More about AAPTBritish TelecommunicationsCable & WirelessClear CommunicationsC&W OptusOptusSaturnTelecom New ZealandTelstra CorporationUnitedGlobalComms

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