Federated Farmers sets up own telco

CALLING IN: Federated Farmers has set up a telecommunications company, FedzTel, hoping to provide broadband to rural communities.

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Federated Farmers has set up a telecommunications company, FedzTel, hoping to provide broadband to rural communities.

President Don Nicolson envisages Fedztel will partner with existing network infrastructure owners.

Communications Minister Steven Joyce revealed at a conference in Auckland that Federated Farmers and FedzTel had put in a bid to participate in the Government's $300 million rural broadband initiative.

Mr Nicolson says Federated Farmers and its members had helped establish several businesses in the rural sector, including fertilser and insurance companies, meat processor and merchandising firms, but has not retained ownership of any of them, a decision it regretted.

It decided to rectify that about a year ago.

"We are voluntarily funded," he says. "Our board decided we would look to any business that could give us a revenue stream, and [there is] nothing better than the electricity or telecommunications sector, we thought."

Mr Nicolson says FedzTel would partner or form joint ventures with other firms in the sector. It does not yet have its own staff.

"We would love it to be successful, but we understand it is a tough business and there is a lot of water to go under any bridge yet."

It could offer partners "demand aggregration and uptake".

Federated Farmers has had several discussions with potential partners, he says.

"We don't have lots of resources, but we have taken lots of high-quality advice. We are looking to build a long-term revenue stream."

Federated Farmers was also interested in participating in the Government's $1.35 billion ultrafast broadband initiative.

"You can't get to rural areas without having built up some urban capacity."

A move into electricity retailing was not on the cards.

Telecommunications Users Association chief Ernie Newman says it is heartening that Federated Farmers has become more active in the telecommunications market.

- © Fairfax NZ News