Telecom NZ and Vodafone to provide rural broadband service

WELLINGTON Sun Feb 6, 2011 3:20pm EST

WELLINGTON Feb 7 (Reuters) - New Zealand's top two telecommunications companies have been chosen for negotiation with the New Zealand government to provide fast internet services to rural areas, the government said on Tuesday.

Telecom and Vodafone proposed in November a joint venture to build a new, open access network for broadband in rural areas.

Telecom is New Zealand's biggest full service telecommunications company, while Vodafone is the country's biggest mobile provider, and the government is confident the solution proposed can be deployed, Communications and Information Technology Minister Steven Joyce said.

"The government specifically asked for parties to consider collaborating on joint bids to reduce construction costs - and this bid does just that," Joyce said in a statement.

Shares in Telecom, the country's second largest listed company, closed on Friday at NZ$2.24.

The government wants the new network to provide fast internet fibre connections to 97 percent of rural schools and 80 percent of rural households within six years.

The companies have said the fibre and wireless services will be open to all providers.

Telecom will build fibre to schools and hospitals, cell sites and rural exchanges and cabinets, and Vodafone will design and build infrastructure the two companies use to co-locate their mobile services on. (Created by Gyles Beckford)

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