Vodafone says plan would improve performance
IT & Telcos
Vodafone says the service it will offer rural homes if it wins a $285m government tender to improve rural broadband will provide superior performance to its existing 3G service, allowing it to be a genuine competitor in fixed-line broadband.
Telecom and Vodafone yesterday announced a surprise partnership to build 154 cellphone towers that they said could be shared by other operators.
It is understood the Commerce Commission is unlikely to block the bid, but 2degrees chief executive Eric Hertz sounded a note of disharmony, warning that the "open access" the two companies promised competitors might not amount to "equal access".
The joint Telecom-Vodafone bid is one of a handful believed to have been submitted to the Economic Development Ministry.
The Government's Rural Broadband Initiative would see 100 megabit-per-second broadband connections provided to more than 800 rural schools and a 5Mbps service to 80 per cent of rural homes within six years, with the remainder of schools and homes getting a more basic broadband service.
The Government expects to sign a contract by February.
IDC analyst Rosie Spragg said the bid appeared quite a compelling proposition. "The Government will need to work their way through the political challenges of it being the two incumbents and the issues around open access."
Vodafone manager Steve Rieger said it intended providing a "fixed-wireless" service using antennas installed in homes that would allow hundreds of people to simultaneously connect to a cellsite and surf the web.
Prices would be competitive, with fixed-line broadband plans available in urban centres.
He acknowledged that supporting large numbers of rural customers accessing services such as Sky's forthcoming iSky internet television service could prove a challenge but believed it was one that could be met by advances in mobile technology.
Telecom would lay fibre and Vodafone would build the towers. Both would compete to connect customers.
Vodafone chief executive Russell Stanners said his company would ensure the cellphone towers were tall enough to accommodate competitors' equipment.
Mr Hertz foresaw problems. "If you get three players up there with 3G and 4G equipment and add a WiMax too – it is going to be very difficult to do that with a tower that is going to be acceptable to the community.
"The question for us is, `is open access really equal access?' If two incumbents subsidised by the Government get a first-to-market advantage, it may be difficult for a third entrant to come in and if [2degrees] has proved nothing else, we have proved three is better than two."
He said a network in which operators shared all their network equipment and radio spectrum but still competed for retail customers made more sense.
The Regional Fibre Group, a coalition of electricity lines and fibre companies, submitted a rival bid that it said would take fibre-optic-based ultrafast broadband deeper into rural New Zealand. Chief executive Vaughan Baker warned against a "completely wireless or mobile solution", saying rural New Zealand would miss out on the broadband infrastructure they deserve.
Federated Farmers chief executive Conor English said it was good the joint Vodafone-Telecom bid had generated excitement but there were several good options. "We think the solution is going to be a mix of technologies. It is not going to be just about fibre or just about mobile."
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