Telecom New Zealand breaks its silence on UFB bidding process, offers CFH new bid

13 Oct 2010

Telecom New Zealand has re-priced its bid for involvement in the national Ultra-Fast Broadband (UFB) initiative, reports the New Zealand Herald. The national telecoms operator was controversially 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 in September. The telco hopes to hear whether its revised bid to participate in the government’s NZD1.35 billion (USD972.4 million) scheme has been successful within a matter of weeks. The head of Telecom’s Chorus unit, Mark Ratcliffe, said that the company has been ‘sharpening its pencil’ since losing out in the first round of preferred partner choices, which were announced last month and went to three regional bidders, led by electricity network companies in Timaru, Whangarei, and the Central North Islands. Ratcliffe continued: ‘We have had lots of detailed discussions with [state-owned UFB management company] Crown Fibre Holdings (CFH) about where we could improve our bid.’

However, Telecom chief executive Paul Reynolds has warned that the company is in danger of running out of time to split itself into two companies – a key part of its initial UFB bid offer – if Crown Fibre Holdings drags its heels in the decision-making process. In his first interview since September’s shock exclusion from the ‘priority negotiations’, Reynolds admitted that discussions with both CFH and the government departments responsible for telecoms regulation have intensified in recent weeks, commenting: ‘We’re pleased there’s real and good discussions taking place. There’s dialogue now in the true sense of the word’. Telecom has previously stated that it will only structurally separate its network assets from its customer services if it is a preferred UFB partner. It also seeks suitable regulatory amendment to reflect the new competitive environment that UFB will introduce. Reynolds has previously suggested that the structural separation needs to be achieved by mid-2011.

New Zealand, Spark