This morning Crown Fibre Holdings and the Minister of Communications and Information Technology, Hon Steven Joyce, has released the following information regarding the selection of Telecom NZ and Enable Networks as the remaining key partners selected for the rollout of fibre based broadband Internet connectivity across New Zealand.
Crown Fibre Holdings (CFH) has welcomed the announcement by Minister of Communications and Information Technology, Hon Steven Joyce that two companies are to deploy and operate the balance of the ultra-fast broadband (UFB) initiative, with a combined CFH investment of ~$1.1 billion. They are:
- Christchurch City Holdings Limited through its fibre business Enable Networks (covering Christchurch, Rolleston and Rangiora); and
- Telecom Corporation of New Zealand Limited through its Chorus business (covering 24 urban areas including Auckland and Wellington).
This announcement follows a recommendation from the CFH Board that was approved by Shareholding Ministers.
"These are strong commercial agreements which met the Crown's key criteria", said CFH Chair, Simon Allen.
"Partners such as Chorus and Enable Networks offer significant industry experience, financial strength and the ability to complete the UFB deployment within the Government's allocated budget and timeframe. Attractive wholesale UFB prices will help end users migrate onto the UFB to experience much higher bandwidth and new services that will follow.
"Collectively, we have made the best possible use of the Government's funds in striking these agreements, using the Public Private Partnership model to leverage ~$1.3Bn of investment to ensure the deployment of UFB to 75% of New Zealand's population. The total cost including private sector co-investment is likely to be in excess of $3Bn", said Mr Allen.
All 33 UFB candidate areas have now been awarded by CFH to its partners. This provides contractual certainty that the UFB policy objective of 75% of New Zealanders having access to at least 100 Megabits per second downstream, 50 Megabits per second upstream by the end of the decade will be achieved. Chorus, a business unit of Telecom, has been awarded 69.4% of the UFB, with 30.6% going to Enable and CFH's existing partners WEL Networks and Northpower.
As part of this agreement Telecom New Zealand has proposed that it will structurally separate its infrastructure business unit, Chorus, from the rest of the company.
"UFB will drive real change for New Zealanders, especially in the priority segments - businesses, schools and the health sector. We see enabling improved productivity, innovation and new services in these areas as perhaps the most critical benefits of UFB," said Mr Allen.
Chorus is intending to accelerate rollout to schools and hospitals beyond the policy requirements, with 95% completed by December 2013. Enable expect to have close to 100% of these premises covered by December 2012.
"CFH is also very encouraged that Christchurch City Holdings and Chorus have agreed in good faith to work in towards developing a partnership to bring their combined existing fibre networks and expertise to focus on the reconstruction and development of Christchurch", Mr Allen said.
"This has been a long, tough and highly competitive process and we thank all the bidding parties, successful and unsuccessful, for their efforts."
"Full scale deployment of UFB is already underway in Whangarei and will commence shortly in Hamilton, Tauranga and Wanganui. Enable will commence UFB deployment in July 2011 and Chorus in August this year. We anticipate the first UFB customer connections in the next couple of months," said Mr Allen.
CFH is releasing summary information of the arrangements underpinning the UFB contracts today, including product prices, indicative coverage areas and deployment timeframes. (www.crownfibre.govt.nz - see Publications & Tenders / Resources).
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