Balance 'critical' for broadband

Faster broadband in New Zealand will pay dividends if telecommunications regulations are right, the president of Internet protocol for French telecommunications giant Alcatel-Lucent says.

"Anything that can support business in an efficient way is critical for an economy," Basil Alwan said in Wellington yesterday.

Faster, more efficient broadband meant companies were better able to outsource IT services to specialist contractors to cut overheads. The ability to reliably and rapidly access global markets and business partners was critical if companies wanted to maintain a competitive edge, he said.

But the Government's regulatory package now being finalised would need to balance competition with the need for network operators to be able to invest in their networks at an appropriate level.

The New Zealand Institute estimated in a report recently that improved broadband could generate national economic benefits of between $2.7 billion and $4.4 billion a year.

Mr Alwan is in New Zealand this week. Alcatel-Lucent has contracts with Telecom, state-owned broadcaster Kordia and electricity network operator Transpower.

Telecom has had a business partnership with Alcatel-Lucent since 2002 and awarded the company a $300 million contract in June to build a new mobile phone network based on W-CDMA technology.

Alcatel-Lucent employs more than 600 staff in New Zealand and has offices in four cities.

Mr Alwan said that though he was not an expert on the telecommunications rules the Government was finalising, the key to their success would be striking a balance.

The incentive to invest in networks would be stifled if network operators were paid too low a price by competitors seeking access to their networks.

"There has to be a business model that makes sense. The investment we're talking about is rather large," he said.

"Likewise, there needs to be competition - everybody recognises that so there needs to be a balance."

- © Fairfax NZ News