Telecom NZ and Vodafone team up for Rural Broadband Initiative

Telecom NZ (ASX:TEL) and Vodafone have submitted a joint response to the initiative

Telecom New Zealand (ASX:TEL) and Vodafone have submitted a joint response to the Rural Broadband Initiative (RBI), a program which aims to give 97 per cent of rural NZ households access to broadband speeds of at least five megabits per second (Mbps).

The initiative, NZ’s equivalent of the National Broadband Network (NBN), was originally planned in September 2009 and is expected to cost the NZ Government $NZ300 million, be funded via a NZ$48 million government grant and NZ$252 from a new Telecommunications Development Levy set up as part of the Telecommunications Service Obligations (TSO) reforms.

Crown Fibre Holdings (CFH), the company charged with building the broadband network, recently announced the first three companies to build aspects of the network, but left incumbent Telecom New Zealand out of the plans.

The rural broadband initiative is designed to give access to high speed broadband to the 25 per cent of New Zealanders not covered under the parallel NZ$1.5 billion Ultra-Fast Broadband initiative which aims to deliver services of at least 100Mbps to urban areas over the next 10 years.

The solution proposed by the two telcos claims to meet the requirements of the program through the extension of Telecom’s existing fibre infrastructure to rural points of presence, including schools and hospitals, and the expansion of Vodafone’s wireless infrastructure.

The proposal touts open access, noting the availability of both fibre and wireless components to those seeking access or wholesale customers, allowing “any” party to offer a retail service over the new infrastructure.

It also indicates Telecom will be responsible for the design and build of open tower infrastructure, on which Vodafone and Telecom will co-locate mobile services on, in addition to other wireless service providers. It also claims to extend Telecom’s fast broadband rollout to 92 per cent of the country and bring “city-grade” fixed broadband to rural users.

Vodafone chief executive, Russell Stanners, said the aim was to provide the best technology fit, “giving the best bang-for-buck for the New Zealand taxpayer”.

“Wireless is now recognised internationally as playing a critical role in reaching rural areas, where it is the most efficient way to deliver high speed internet access,” Stanners said in a statement. “The spin-off benefit of building more cell sites to deliver a broadband service to homes and businesses is the significant expansion of mobile voice, SMS and data coverage in rural New Zealand.”

Telecom chief executive, Paul Reynolds, said the two companies had combined resources in an attempt to give rural communities high-speed broadband access as soon as possible.

According to Reynolds, the collaboration is an attempt to “deliver a solution that will accelerate the commercial success and social connectivity of New Zealand’s rural and regional communities”.

Back in March, Telecom New Zealand noted the Government’s decision to press ahead with plans to deliver rural broadband services throughout the country would mean its EBITDA guidance for each of the 2011, 2012, and 2013 financial years would be adversely affected by up to $56 million.

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