Telecom, Vodafone bid one of five

Last updated 16:08 12/11/2010

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LATEST: A joint bid by usual rivals Telecom and Vodafone is among five final proposals for the Government's $300 million rural broadband project.

Five final tenders for the rural broadband initiative have been received by the Government, communications minister Steven Joyce said today after bids closed.

Telecom and Vodafone said they proposed to combine resources to build new, open access network infrastructure to provide broadband in rural areas using a range of technologies.

This would extend Telecom's existing fibre infrastructure by 3000km taking it to key rural points, including schools and hospitals, while Vodafone would build 154 new mobile towers.

Both fibre and wireless components would be available on an equivalent basis to access seekers and wholesale customers, allowing any party to offer a retail service over the new infrastructure.

Mobile phone company 2degrees said it would seek assurances that public funding led to a real choice for rural customers, rather than simply creating a "high speed" version of the mobile duopoly New Zealanders lived with for so long.

"We need to make sure that funding sees more than two players competing equally and vigorously for rural customers' business," chief executive Eric Hertz said.

The New Zealand Regional Fibre Group (NZRFG), which includes Vector, Unison, PowerNet and Horizon Energy, also put in a proposal.

NZRFG chief executive Vaughan Baker said the group's business model and build design would ensure a substantial fibre-rich backbone, which service providers could use to provide fixed, wireless or mobile broadband options.

The group's members were locally owned and regionally situated, embodying the principles of open access infrastructure on a non-discriminatory basis - more so than any other bidder, Mr Baker said.

They were the "natural custodians" of such essential infrastructure that would increasingly be treated as a utility over the next 100 years.

Vodafone chief executive Russell Stanners noted that his company and Telecom coming together was not a sight that was often seen.

Mark Ratcliffe, chief executive of Telecom's network business Chorus, said the joint proposal avoided unnecessary duplication. He could not see any advantages of Telecom making a bid on its own. The collaboration would enjoy the fastest possible start because it was building off existing infrastructure.

The initiative seeks to provide fibre to 97 percent of rural schools and a minimum 5 megabits per second (Mbps) broadband service to 80 percent of rural households within six years. It also aims to provide priority users with access to fibre-based broadband services.

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Mr Joyce said a change to a national approach in August encouraged collaboration and leveraging of existing assets.

"I anticipate all the tender proposals provide this in some way. This will ensure greater certainty of coverage for the money available."

The Government will evaluate the proposals over the next four weeks. A decision on the RBI bids is expected by Christmas.

- NZPA

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