New Zealand gets five bids for RBI; Telecom NZ, Vodafone submit surprise joint bid

12 Nov 2010

New Zealand’s Minister for Communications Steven Joyce has confirmed that the government has received five final proposals for its Rural Broadband Initiative (RBI), which seeks to extend broadband services to rural areas. First unveiled in March 2010, the project seeks to provide fibre to 97% of rural schools and minimum 5Mbps transmission speeds to 80% of rural households within six years. Joyce said that the government will be undertaking an intensive evaluation of the proposals over the next four weeks, with a final decision likely to occur before Christmas.

In a surprise move, it has been revealed that Telecom New Zealand and Vodafone have submitted a joint bid for the RBI, comprising a combination of fibre and mobile broadband technologies. The joint proposal will see Telecom’s existing fibre infrastructure extended to key rural points of presence, including schools and hospitals, with an expanded Vodafone wireless infrastructure delivering mobile broadband services to outlying areas. Telecom and Vodafone had widely been expected to submit separate bids, and had given no indication of a joint bid. Vodafone CEO Russell Stanners commented: ‘During the bid process the MED (Ministry of Economic Development) made it clear they wanted proposers to work together so we started thinking ’why not?’. It makes perfect sense to come together to combine our assets, investments and skills to build a solution that meets the requirements [of the government]’. Telecom CEO Paul Reynolds added: ‘This solution sees New Zealand’s two largest telecommunications providers combining their extensive resources and skills to bring the benefits of high speed broadband to rural communities as quickly as possible. By collaborating, our companies are showing that the telecommunications industry is working for the good of New Zealand to deliver a solution that will accelerate the commercial success and social connectivity of New Zealand’s rural and regional communities, employing fixed and mobile technology’. Stanners conceded that the partnership ‘was not a sight you saw very often’.

Although Joyce opted not to reveal the full shortlist, other entities believed to have put forward bids for the project include the New Zealand Regional Fibre Group (NZRFG), which includes Vector, Unison, PowerNet and Horizon Energy. Another consortium, comprising state-owned Kordia, internet provider Woosh and network owner FX Network is also believed to have lodged a bid.