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Telecom Commits to BIG Fibe Investment
Posted Fri 26 October 2007 @ 10:07 a.m. by Ernie
Its all on! Hours after submitting Telecom's response to the Minister's determination on operational separation, Paul Reynolds has just announced Telecom will roll fibre out to every NZ town and city with a population of 500 or more inside 4 years. It makes my blog earlier in the week about good regulation enhancing, not destroying investment incentives seem ever-so-prophetic. Maybe, at long last, New Zealand's communications infrastructure is on a roll.

Categories: Fixed line carriers \| Innovation \| ISPs \| TUANZ policy
Comments (5)

5 Comments

David L says:
Wonderful news Ernie - I agree wholeheartedly, BUT $ 1.4 billion for the "whole" of the next generation network ? Surely we would be talking about double those numbers? Does anyone have more of a cost breakdown to justify these Telecom numbers for building the "whole" of the NGN ? Cheers David L
Added: 26 October 2007, 12:25 p.m.

Jonny M says:
This is, on the surface, good news. A couple of points to put it all into perspective though. Firstly, utility of the network built and services provided is NOT directly proportional to Investment. The nation's efforts are far better placed focusing on results rather than grandiose statements about the size of one's network investment. Think of what would be achieved in the country if 1400 smaller providers each invested $1M. Secondly, we're not specifically after fibre from network providers. we're after high speed, reliable, and cost effective telecommunications services - it just so happens that fibre is the best tool to achieve this in many cases. There is a subtle but extremely important difference there. Telecom can build out all the fibre and "NGN" they want, but unless it is used to deliver useful services at useful prices then it all comes to nothing. It's actually worse than coming to nothing - Telecom end up with a healthy start on controlling the monopoly infrastructure of tomorrow whilst we simultaneously applaud them for doing it. Crazy. Cheers, Jonny.
Added: 26 October 2007, 2:17 p.m.

John says:
1.4 billion to uprate my average speed from 1.4Mbps to 4Mbps. Still less than the current promised maximum. Step in the right direction I guess, but lets not over sell it. We need high speed access to the premises(home/business)
Added: 26 October 2007, 4:14 p.m.

Jane says:
It’s good to see progress from the bully boy tactics of refusing to invest if legislated, to a more realistic approach. And good on David Cunliffe on standing his ground, extracting some penalties from them, yet pushing the legislation through. But let’s be realistic here. Telecom’s NEAX exchanges are obsolete and will be out of service in 2012, four years time. They HAD to migrate from a legacy circuit switched telephone network to a packet based IP network or else walk away from their monopoly position in the New Zealand market. $1.4b sounds a big number but it is only $350m per year. It’s a sensible commercial decision that will allow them to maintain control and protect their toll revenues and at the same time reduce costs by simplifying their network architecture. If they hadn’t been trying to extract maximum value for their shareholders, the $1.4b would have been spread over a far longer timeframe and the project started some years ago. Where does it leave us? Jonny M is spot on I am afraid. It leaves Telecom in control and an incumbent attitude that will continue to ration bandwidth and price accordingly, even in a separated world. It’s a very effective press release IMHO.
Added: 28 October 2007, 11:27 a.m.

Ian says:
I agree, it is a very good start, but it would be much more impressive if they committed to an Open Broadband POP in every town like Telus did in BC. This then stimulated local investment in the last mile and everybody won. The local community got competitive broadband and the Telco got to carry the traffic.
Added: 29 October 2007, 9:26 p.m.

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