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Source: Reuters -
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Telecom's share price dipped four cents on Wednesday morning following the government's finalisation of its proposed ultra fast broadband plan.
The $1.5 billion plan was first put forward in March this year and will see the government partner with the private sector in order to roll out ultra fast broadband to 75% of New Zealand in the next 10 years.
Communications and Information Technology Minister Steven Joyce on Wednesday said that submissions, alternate approaches and a range of regulatory issues were all carefully considered to reach the proposal's final form.
Under the proposal the new Crown-owned investment company, Crown Fibre Holdings, will be up and running by October and will be charged with selecting private partners and managing the government's investment in fibre networks.
The partner selection process will begin next month.
Telecommunications rivals Telecom and Vodafone have already pitched their co-investment models to the government.
Craigs Investment Partners market analyst Alex Dalzell says Telecom's share drop was modest (dropping to $2.64 after 11am) but the proposal is not the best outcome for Telecom.
"Their plan has been put to one side...and it's really whether they'll participate and at what level they'll participate, and whether it changes the structure within their company," she says.
Meanwhile, the Telecommunications Users Association (TUANZ) has welcomed the finalisation of the proposal.
"It takes into account most of the key issues raised in submissions, and sets a timetable with milestones. It is an excellent blueprint on which to build," says TUANZ CEO Ernie Newman.
Newman says the organisation is particularly pleased with the way the plan balances the need of investors for a predictable regulatory regime, with users' demand for a competitive market with choice and value.
"By dealing up front with competition issues related to fibre
investment...it should be possible to minimise the regulatory
intervention that has been an unfortunate but necessary feature of
the copper and mobile markets," he says.
