Crown Fibre Holdings reveals UFB shortlist; Telecom shunned from ‘priority negotiations’

9 Sep 2010

Crown Fibre Holdings (CFH) has revealed its shortlist of bidders for the government’s NZD1.35 billion (USD972.4 million) ultra-fast broadband (UFB) project, reports the National Business Review. In a controversial move, national telecoms operator Telecom New Zealand has been omitted from ‘priority negotiations’, after its plan to offer a nationwide rollout across all 33 regions was dismissed in favour of a region-by-region approach. The three bidders named for ‘priority negotiations’ are all members of the Regional Fibre Group (RFG) – an alliance of power companies and regional fibre providers. They are: Alpine Energy, which plans to operate in Timaru; The Central North Island Fibre Consortium (Hamilton, Tauranga, New Plymouth, Wanganui, Hawera and Tokoroa); and Northpower (Whangarei). All three have been invited to commence the negotiation of binding offers. Telecom New Zealand remains on the shortlist, along with ten other interested parties, although its future participation is doubtful after CEO Dr. Paul Reynolds’ earlier admissions that Telecom must succeed with its national bid in order to guarantee its involvement. Only one bidder has been eliminated completely from the process: Canada’s Axia NetMedia, which was being backed by Vodafone.

Crown Fibre Holdings has left the door open for Telecom New Zealand to team up with its fellow shortlisted bidders. CFH chairman Simon Allen commented: ‘These three parties have displayed the best proposals including a combination of access prices, funding provisions, industry experience and financial backing. CFH believes these respondents can drive strong uptake and offer competitive access prices that providers of retail services will find attractive. CFH will be having further discussions with the other shortlisted parties, and as a consequence of those discussions will elect other parties to negotiate with to meet the balance of the UFB target. All shortlisted parties remain important contenders for future negotiations of binding agreements. CFH is open to either a Telecom, New Zealand Regional Fibre Group solution, or some form of combination for the balance of the UFB project. I am pleased to confirm that CFH is well on track to make recommendations for binding offers for initial investment partners to shareholding Ministers in October 2010, and to commence the roll-out of UFB before the end of the year’.

New Zealand, Spark