December 6, 2010 / 9:38 PM / 9 years ago

NZ govt broadband contracts go to lines companies

WELLINGTON, Dec 7 (Reuters) - The first two contracts for ultra-fast broadband in New Zealand’s main urban areas have been awarded to electricity lines companies, the government said on Tuesday.

Communications minister Steven Joyce said Northpower Ltd and a subsidiary of WEL Networks Ltd would rollout ultra-fast broadband in the North Island cities of Hamilton, Tauranga, Whangarei, New Plymouth and Wanganui.

The companies had been selected as the preferred bidders in September.

First work would start before Christmas and was expected to be completed by 2015.

The contracts cover nearly 16 percent of the planned nationwide broadband rollout and are worth more than NZ$200 million ($153 million).

The New Zealand government has committed to spending up to NZ$1.5 billion to provide high-speed internet services to 75 per cent of the country by 2019.

“The access prices... negotiated will ensure the benefits of fibre are within reach of businesses as well as everyday New Zealanders,” Joyce said in a statement.

He said the list of preferred partners to provide ultra-fast broadband for the remaining 25 regions would be announced soon.

The country’s biggest telecommunications company Telecom Corp Ltd has put up a national plan to supply high speed Internet through fibre-optic cables to the majority of New Zealand homes.

But its plan is dependent on splitting off its network operations, with its preference being a demerger.

Telecom shares last traded down two cents or 0.9 percent at NZ$2.16 in a slightly softer market.

Telecom has also formed a joint venture with mobile competitor Vodafone Ltd provide fast internet services to rural areas, separate to the urban roll out. (Reporting by Gyles Beckford)

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