Mobile carriers forge partnership to snare all the public funds for rural upgrade
Vodafone New Zealand chief executive Russell Stanners says it makes sense for the Government to spend all of the $150 million it has earmarked for improving rural telecommunications on new cellphone towers, with none going on improvements to the fixed-line network.
Spark, Vodafone and 2degrees have submitted a joint proposal to build and share 520 new cellphone towers that would provide 4G mobile and home broadband and cellphone services to rural areas.
The plan would see the area of New Zealand that was covered by mobile services increase by a quarter and would extend mobile coverage to another 1200 kilometres of state highway.
The companies said that in addition to the government funding, which has been raised through an industry levy, they would contribute "hundreds of millions" of dollars in infrastructure.
The Government previously opted to subsidise a mix of mobile infrastructure and improvements to Chorus' copper fixed-line broadband network when funding the already-completed first stage of the Rural Broadband Initiative (RBI).
But Stanners said its proposal was all that was needed to meet the requirements of the new second stage (RBI2).
Chorus submitted a separate proposal to Crown Fibre Holdings (CFH), which is running the RBI2 tender, that would bring better fixed-line services to rural areas.
Company spokesman Ian Bonnar said there was no reason CFH could not take bits from both Chorus' and Spark, Vodafone, and 2degrees' proposals and get an "even better outcome".
Chorus chief executive Kate McKenzie said it foresaw fibre being the predominant broadband technology for homes and businesses in the future.
But Chorus said independent testing had found even copper technology VDSL significantly out-performed mobile broadband technologies available today.
"Innovative fixed-line technology choices such as vectoring will deliver even faster speeds over fixed lines, which also deliver consistent performance that does not slow down at busy times and do not require data caps to constrain use," McKenzie said.
Stanners said Spark, Vodafone and 2degrees' proposal to build 520 cellsites was based on it getting the entire government subsidy for RBI2.
He did not rule out a joint mobile and fixed-line solution, but did not believe that was necessary.
"Our vision was to create an overall solution," he said. "I think the Government should come to a decision that our solution is the one they go with.
"Having said that we respect CFH will go through a process and I'm sure there is a lot of water to go under the bridge before we find out what the solution is the Government will decide to implement."
Telecommunications Users Association (Tuanz)chief executive Craig Young said it had been pushing for the three mobile providers to work together to leverage the government subsidy.
But he said any infrastructure built by the three companies under RBI2 should also be available to smaller local wireless providers.
"We wouldn't like to see a tower built and then locked up by those three mobile providers, we'd like to see other opportunities for other providers beyond those three."
Spark managing director Simon Moutter said the cooperation of the three providers was the only economically viable way to deliver quality mobile coverage and wireless broadband infrastructure to remote rural areas.
2degrees chief executive Stewart Sherriff said 2degrees had a proud history of investment and innovation in New Zealand. "We are therefore very happy to be part of this proposal to address the digital inequity between urban and rural communities."
Vodafone spokeswoman Elissa Downey said the companies would share the towers using a technology called "Multi Operator Core Network" (MOCN).
That would mean they would share antennas on the cellphone towers and radio spectrum, as well as the towers themselves.