Five cities now have fibre certainity

December 7th, 2010 at 3:00 pm by David Farrar

has announced:

The cities of Hamilton, Tauranga, Whangarei, New Plymouth and Wanganui will be among the first to benefit from the government’s rollout of ultra-fast (UFB), says the Minister for Communications and Information Technology Steven Joyce.

Crown Holdings has concluded negotiations with two partner companies, following shareholding ministers’ approval of the deals over the weekend.

The partners are:

  • Northpower Limited
  • and Ultra Fast Fibre Limited, owned by WEL Networks,

The new companies will rollout fibre in Whangarei, Hamilton, Cambridge, Te Awamutu, Tauranga, New Plymouth, Wanganui, Hawera and Tokoroa.

Northpower will commence its roll out in Whangarei before Christmas with Ultra Fast Fibre expected to begin laying fibre early in 2011.  Both companies will have completed their rollouts by 2015.

These joint ventures represent nearly 16 per cent of UFB premises and a combined value of more than $200 million.

This is excellent news. It shows the regional approach has worked, in preference to one nation-wide contract.good to see there will be some fibre laid before the end of the year.

There was some suspicion that Northpower and WEL would not end up with the contracts, despite being announced as preferred bidders. People speculated that Telecom might grab it away from them in a negotiation for a nation-wide contract.

So good to see there will be some fibre laid by the end of the year.

CFH will shortly announce a list of parties with whom it will next elect to negotiate with in the remaining 25 UFB regions.

All eyes are on this.

My view is that Telecom/Chorus will be successful if their price is the same or close to the Regional Fibre Group – say within a couple of hundred million. There are long-term benefits to getting Telecom to structurally separate, and having Chorus as a stand alone infrastructure company.

But it is possible the Regional Fibre Group will have undercut Telecom. They have certain cost advantages such as current ducts and poles and resource consents. Over 70% of the cost of fibre is digging up the road, and the less of that you have to do, the cheaper you do it.

In an ideal world I’d have Telecom sell Chorus to the Regional Fibre Group – then you’d have an integrated infrastructure provider. However I’m not sure Vector and co could afford to buy it!

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10 Responses to “Five cities now have fibre certainity”

  1. RightNow (6,994 comments) says:

    What will be interesting will be how this bandwidth is carried upstream. The article reports a wholesale rate to ISP’s of $60/month for 100Mbps symmetric at 1:1 contention. Unless a truckload more content is hosted locally then that 100Mbps is ‘aspirational’ at best. I would expect real speeds to be not much better than DSL, especially for international content.

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  2. berend (1,709 comments) says:

    We already had a city with fibre certainty. So certain actually that it was already laid and being used. No government involved.

    But I should stop. We’re borrowing only $275 million a week, so who cares? All for the re-election of John. Must be worth it.

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  3. Inventory2 (10,339 comments) says:

    @ Berend; we didn’t. We are trying to run a business with staff spread all around the country. We’ve structured much of our communications to be web-based`. We are absolutely delighted that Wanganui is going to get ultra-fast broadband early in the piece. National campaigned on it; National is delivering on its promise.

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  4. Graeme Edgeler (3,289 comments) says:

    National Party-held and somewhat-marginal electorates. Excellent.

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  5. gingercrush (153 comments) says:

    Um Hamilton and Cambridge are also covered by the Labour-held electorate of Tainui. And besides everywhere except for the big four cities (Dunedin not Hamilton), Palmerston North and the two Maori electorates Labour has no electorate seats. Therefore, under your stupid rationale Graeme Edgeler anywhere in provincial New Zealand and its somehow pork barrel politics (and you are implying that and I see Idiot/Savant is saying the exact same thing)

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  6. tristanb (1,127 comments) says:

    @ Berend; we didn’t. We are trying to run a business with staff spread all around the country. We’ve structured much of our communications to be web-based`. We are absolutely delighted that Wanganui is going to get ultra-fast broadband early in the piece. National campaigned on it; National is delivering on its promise.

    Well, I’m glad my taxes are subsidising your business. But even happier to be subsidising the big Telcos.

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  7. Pongo (372 comments) says:

    Well done Mr Joyce. Also pleased it hasnt been given to the incumbents who have served us so poorly with their mobile systems, lets hope he smacks them hard on termination charges very soon. The only way they will be forced to run their oligopolies effeciently is regulation and judging from the Brightstar debacle they are hardly focused.

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  8. berend (1,709 comments) says:

    @Inventory2: fibre was already being laid by Northpower limited and they already announced that TWO YEARS AGO. I quote:

    Northpower, the community-owned electricity distribution and contracting company, has budgeted $1.5 million for the backbone and then expects to spend up to $30 million over five years to extend fibre to a majority of its 52,000 customers.

    National is basically announcing what private companies were already doing before National got elected.

    Great stuff. We really need a government.

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  9. Falafulu Fisi (2,179 comments) says:

    Inventory2 said…
    We are trying to run a business with staff spread all around the country. We’ve structured much of our communications to be web-based`

    IV2, can you state specifically here of what this new UFB roll out can achieve that you can’t (or not able to) do now? Teleconference? C’mon, what’s wrong with conference call using telephones? Transmission of large files? Umm, how big are those files & how often? I’ve heard all reasons, but to me is just nonsense.

    Can any pro-government spending here elaborate a bit further of why they’re supporting this UFB? I’m pro-market & not pro-government spending?

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  10. Camryn (543 comments) says:

    Not that much certainty e.g. Whangarei is a district with urban and rural areas. Is the fibre plan just for more densely populated “core Whangarei” or for the whole district including areas like Ruakaka-OTP and Waipu?

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