Chinese fibre for capital?

Chinese firm Cheung Kong Infrastructure will consider building a fibre-optic access network in Wellington.

Cheung Kong, which owns local power lines company Wellington Electricity, could invest in a "local fibre company" (LFC) which would be set up as part of the Government's $1.5 billion ultrafast broadband scheme.

The Wellington region would receive about $156m of the $1.35b allocated to LFCs, if the government funding was carved up according to population.

The Government intends to invest dollar-for-dollar with private investors in local fibre companies, which will be responsible for building and marketing fibre networks in their regions.

Cheung Kong bought Wellington Electricity from Vector last year for $785 million. Wellington Electricity spokesman Hugo Armstrong says the firm is studying the Government's fibre plan but has no further comment.

Consulting firm Network Strategies has suggested lines companies could play a role in the Government's fibre plan by rolling out fibre networks on their existing infrastructure.

Cheung Kong Infrastructure is the biggest business group in Hong Kong and is controlled by the richest man in Asia, Li Ka-shing, who has amassed a personal fortune estimated at NZ$38 billion.

Mr Li is no stranger to the telecommunications industry. He is also chairman of Hutchison Whampoa, an international conglomerate with telecommunications holdings in 14 countries.

He began his career making and exporting plastic flowers and is known as "Superman" in Hong Kong for his skill in investment. Despite his immense wealth he lives modestly and wears a cheap black wristwatch and simple black dress shoes.

Cheung Kong tried to buy a New Zealand ironsands business for $250 million last year, but the deal was vetoed by the New Zealand Government.

Managing director H L Kam said then that it was interested in buying more New Zealand infrastructure assets.

"We have found New Zealand to be an attractive place for investment due to its political stability, legal system and efficient business environment. We look forward to having more opportunities to participate in the business development of New Zealand."

Neil de Wit, chief executive of Wellington telco CityLink, says the firm has been mulling over the fibre plan since it was first discussed a year ago and is "reading the documents quite deeply".

It is too early to say how CityLink might be involved in a Wellington roll-out, he says. "[The plan] is still subject to change but we have clarity about government thinking. It's a regional approach as opposed to a national approach and that obviously triggers a whole pile of contemplation on our behalf.

"It's set up for there to be the best-of-breed local solutions in various regions."

FX Networks sales manager Jamie Baddeley says it is likely to get involved in a proposal. "Whether we put one forward directly ourselves remains to be seen."

Wellington City Council strategy manager Paul Desborough says councils in the region will make proposals to the Government but it is too early to say what they would contain. "As a region we're really supportive of additional broadband and fibre."

Interested parties have until April 27 to make submissions on the fibre plan and would-be partners must submit proposals for regional investments by October.

Already there are signs the timelines may slip. Kordia strategic development manager Susie Stone says the state-owned enterprise is among telcos that have appealed for an extension of a "couple of weeks" to submit feedback.

- © Fairfax NZ News