NZ govt rejects Vodafone's NBN offer

The New Zealand Government has rejected a Vodafone proposal to turn the latter's hybrid coaxial-fibre (HFC) cable network into a wholesale NBN in Wellington and Christchurch in lieu of fibre to the premises.

NZ communications minister Amy Adams.

Last month, Vodafone chief executive Russell Stanners proposed to the NZ government to halt the deployment of the country's Ultra-Fast Broadband (UFB) fibre-to-the-premises network in the both citieson the basis that the telco's HFC cable network would prove cheaper.

Vodafone would wholesale access to the HFC network to other ISPs, Stanners promised in a letter to Crown Fibre Holdings, the government agency in charge of the UFB deployment.

He said that the HFC network will be able to provide 1Gbps downloads in the next five to ten years, making it on par with fibre-optic alternatives. The carrot for the NZ government would be savings of up to NZ$500 million in deployment costs by reusing the HFC network.

Stanners' idea did not found favour with the government, however. Fairfax Media quoted communications minister Amy Adams as saying that Vodafone was "obviously pursuing its own commercial interests".

Adams also said that the deployment of the UFB FTTP network will continue and not be stopped in any candidate areas.

Jordan Carter, chief executive of InternetNZ, welcomed Adams' response.

Good to see @amyadamsMP ruling out abolishing #ufb in #wgtn and #chch

— Jordan Carter (@jordantcarter) March 6, 2014

Chorus, which was structurally separated from incumbent Telecom NZ as a wholesale phone lines and network company, is currently struggling to meet its contractual UFB deployment commitments due to cost blow-outs and lowered revenue from its regulated copper lines business.

A Chorus spokesperson told iTnews that the company is "getting on with delivering fibre in Wellington under the UFB." 

CFH spokesperson Rohan MacMahon said it was the role of Crown Fibre Holdings "to implement policy, not to change it."

A spokesperson for Vodafone told ITnews that the telco is keen to support the government to ensure the success of the UFB initiative. 

"Clearly there is a funding gap to be bridged by Chorus, Crown Fibre Holdings and the industry. One of the suggestions in the letter was that CFH should promote and allow Chorus and the other LFCs to leverage existing fibre assets to build out the UFB network," the spokesperson said.

To increase uptake, Vodafone would also like to seethe UFB provide faster speeds - with entry level plans at 100Mbps rather than 30Mbps.