Scrap UFB rollout, says Vodafone
Vodafone says the Government should scrap the rollout of fibre-based ultrafast broadband in much of Wellington and Christchurch "to make ends meet".
Russell Stanners, chief executive of the Auckland- based subsidiary, said people could instead use Vodafone's cable broadband service which was available to 85 per cent of Wellington homes and almost two-thirds of homes in Christchurch. Cable could offer download speeds on a par with fibre for at least the next five years, he said.
The proposal would slice $360 million off the cost of laying fibre to the street and another $140m connecting homes to UFB, directly saving taxpayers $145m and helping Chorus close the $1 billion funding gap caused by lower regulated wholesale prices for copper-based broadband, he said.
Vodafone's HFC (hybrid- fibre coaxial) cable networks passed 145,000 or 11 per cent of New Zealand homes, Stanners said. "There are real challenges on the UFB cost envelope and the pricing envelope; let's be pragmatic".
Stanners sent a letter to Crown Fibre Holdings chief executive Graham Mitchell setting out the idea and promising that Vodafone would wholesale its cable networks to other internet providers on an equal footing if it was accepted. He also hoped to discuss his proposal with Communications Minister Amy Adams when they met in a few weeks.
Mitchell said he could not comment on Stanners' proposal as it concerned government policy. Adams, who has up to now consistently maintained the fibre roll-out will continue, was not available for comment.
Fibre-optic cable all the way to people's homes was the "bee's knees" but the cost of the UFB scheme exceeded its funding, and utilising Vodafone's cable networks could bridge that gap, Stanners said.
He had become more convinced of that during a visit to Vodafone acquisition Kabel Deutschland in Germany, when he was advised HFC networks could be delivering download speeds of 1 gigabit-per-second within five to 10 years. "Our networks can meet all the speed requirements of UFB," he said.
Vodafone acquired the HFC networks through its $840 million takeover of TelstraClear in 2011. The Government had approached TelstraClear when it owned the networks but the company had not been interested in making them available for the UFB programme, he said.
Stanners acknowledged that abandoning laying fibre in the Wellington and Christchurch's cable zones would mean Crown Fibre would have to revise its contracts with UFB network-builders Chorus and Enable Networks. But Enable, like Chorus, was facing "big challenges", he said.
UFB residential fibre connections
Orcon About 6000
Snap Internet More than 4000
Telecom About 4000*
Vodafone 2000 to 3000
CallPlus/Slingshot several hundred
Note: *Telecom figure as at December 31
Source: Company statements