Vector CEO Simon Mackenzie claims that if Telecom partner with the government in its Ultra Fast Broadband, the fibre network will be delayed.
Vector is part of the New Zealand Regional Fibre Group (NZRFG), an alliance of lines companies and independent fibre providers that are offering a national solution in competition to Telecom’s bid to partner with the government in its billion-dollar fibre network. The government is likely announce its preferred commercial partner in October.
Mackenzie says that Telecom’s announcement earlier this week that it will structurally separate is likely to delay the fibre rollout. “Having been through structural separation ourselves going back 12 years I certainly know what a major exercise that is,” he says. “I can’t see how they can be ready to deliver a solution by October this year.”
Telecom would need to get shareholder approval to structurally separate and create a new entity its dubbed Chorus2. This is likely to be completed by the end of its financial year, 30 June 2011.
Mackenzie says Vector already has an extensive fibre network in Auckland and is “not encumbered by a copper cabinetisation rollout archicture philosophy.”
“We’ve got a good solution with the rest of the NZRFG to get the national coverage – it’s local investment and we’re delivering what the government wants,” he says.
Mackenzie says Telecom’s argument that there shouldn’t be a duplication of assets in the rollout of a fibre network. “They’re trying to imply that their solution doesn’t do duplication and waste but the fact is that it does and so it’s down to who is the best party to expand their (existing) networks.”
He queries why Telecom is against duplication in a fibre rollout, but not against it when it comes to mobile networks. “If you extended that argument you’d have to ask why did they build the XT network, when they could have done a deal with Vodafone for building out one mobile network?”
Computerworld put that question to Telecom. Company spokesperson Mark Watts replied that fixed and mobile “are entirely different markets”.
“Any observer would say that the New Zealand population is already well served with speeds, multiple networks and with more mobile phones than people,” Watts says.
“On the fibre front there’s still away to go and what we’re saying is let’s help close the gap by avoiding duplication.”
He says that Telecom has already got 25,000 kms of fibre in the ground. “In the context of New Zealand with its limited resources it makes absolute sense to use the huge platform that’s already there as a springboard to take it to the next phase, which is fibre past 75 percent of homes within ten years.”
Bidders in the UFB process, which is being managed by government agency Crown Fibre Holdings, were required to put forward refined proposals on Monday. The NZRFG says it has "trimmed its submissions to seven, while still providing national coverage"
In addition toVector's proposal to partner with the government in Auckland, the lines company has also put forward a Wellington solution. When Vector sold its Wellington assets it retained the right to install fibre cable on existing power lines.