During his address at Telecom’s Annual Meeting in Christchurch this morning, Telecom chairman Wayne Boyd made a case for Telecom to play a pivotal part in the Ultra-Fast Broadband initiative.
“We believe the best solution for Telecom, the telecommunications industry, and New Zealand as a whole, is for Telecom to be at the heart of Ultra-fast broadband,” he told shareholders and others attending the meeting.
“Telecom already has more than 25,000 km of fibre optics in operation today,” he said.
“That’s roughly half the total required to extend fibre to 75 percent of New Zealand.
“Frankly, wasting taxpayer funding and private investment on duplicating a network that is halfway complete is economic madness.”
(The goal of the UFB initiative is to provide fibre-to-the-home to 75 percent of New Zealanders by 2019).
Boyd then took a swipe at the tender process.
“However, the tender process that is being run by Crown Fibre Holdings ... precludes and telecommunications company that both owns infrastructure and sells services to end-users such as you, from taking an ownership stake in any fibre that gets built.
“This essentially prohibits much of the current telecommunications industry in New Zealand from participating, unless sweeping changes to the industry structure occur.”
That’s where Telecom’s proposal, made on August 2, to split Telecom in two comes in, Boyd said.
The proposals is for Telecom to be completely split in two (as opposed to the current operational separation), comprising a company that builds and maintains infrastructure, and one that sells services to end-users.
That would enable the resulting companies to co-invest with the government and integrate work on the other major government broadband project, the Rural Broadband Initiative, into the UFB project.
Telecom has a team of 100, including three executives working fulltime, committed to the August 2 proposal, Boyd said.
However, he noted that splitting Telecom in two would require shareholder approval.
Telecom has had “formal feedback” on the August 2 proposal from the Ministry of Economic Development and Crown Fibre Holdings over the past two weeks, Boyd said.
He noted that while that process had led to media speculation, “given the commercial sensitivity of these discussions, we are not always going to be able to comment in public and explain what’s going on”.
Towards the end of his address, he re-iterated the investment Telecom has already made in fibre, noting that it “kicked off a little over two years ago, long before the Ultra-fast broadband initiative was commenced”.