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Telecom - Source: Telecom -
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Telecom has missed out on a "significant part" of the government's Ultra Fast Broadband (UFB) $1.5 billion nationwide roll-out.
The telecommunication giant asked the NZX, New Zealand's stock exchange operator, for a brief trading halt this morning ahead of the revelation. Its shares were at $2.13 when the halt was put on but have since dropped over 10 cents.
Communications and Information Technology Minister Steven Joyce said this morning that the government has narrowed down its UFB partners to a shortlist of 14.
From those, Crown Fibre Holdings (CFH), the Crown entity in charge of the project, says it is going to commence negotiating binding offers with three regional fibre providers: NorthPower for the Whangarei area; the Central North Island Fibre Consortium for covering Hamilton, Tauranga, Cambridge, Te Awamutu, Tokoroa, New Plymouth, Hawera and Wanganui; and Alpine Energy for Timaru.
CFH said these three bids represent a significant portion of the UFB build, including a large part of the central North Island, and it seems Telecom, one of New Zealand's biggest companies, has missed out.
"These three parties have displayed the best proposals including a combination of access prices, funding provisions, industry experience and financial backing," said CFH Chairman Simon Allen.
Telecom had recently announced it is proposing a structural separation into two entities - a retail arm and the infrastructure arm necesary to win part of the government contract for UFB.
Telecom said it is "evaluating" the news from CFH but still believes in the merit of its own bid.
"We continue to believe that a national solution is the most efficient and effective way of delivering fibre to New Zealand while avoiding duplication and waste," said Paul Reynolds, Telecom CEO.
Telecom said it remains committed to its own nationwide solution which integrates the UFB and Rural Broadband Initiative (RBI) areas and includes the proposed demerger in July next year.
"We recognise that our bid is more complicated than those of other bidders, and that Crown Fibre Holdings does not have a mandate in the areas of RBI, regulatory reform and legislative change," Reynolds said.
CFH said the remaining shortlisted parties, including Telecom and Vector, will continue in the partner selection process.
"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."
The party that has not been shortlisted at this stage is Canadian-based Axia NetMedia. Allen said that this party's bid included certain elements that were not part of the government's UFB policy.
The other short-listed companies are:
CityLink Ltd. covering the Wellington region,
Central Fibre Consortium,
Electra Ltd. covering Levin and Kapiti,
Electricity Ashburton covering Ashburton,
Enable Networks Ltd. covering Christchurch and Rangiora,
Flute Network covering Dunedin, Invercargill and
Queenstown,
Network Tasman Ltd. covering Nelson and Blenheim,
Network Waitaki Ltd. covering Oamaru,
and Westpower Ltd. covering Greymouth.
