Chorus has awarded contracts to incumbent suppliers Visionstream and Downer for the maintenance of its copper and fibre broadband networks, along with any new fibre build outside of Ultra-Fast Broadband (UFB) areas, as a result of what it says is greatly improved performance of the network.
The contracts are worth about $450 million and will run from 1 July 2019 to 31 March 2022. Under the previous contracts, the equivalent work was done by Downer, Visionstream and Broadspectrum.
Chorus’ GM Network and Field Management Andrew Carroll said: “Given their importance to our business, it is essential that our service companies have enough volume and scope of work to provide sustainable services and have the ability to invest in people and infrastructure. As such, we have chosen partners who we are confident will deliver the right overall results, not just the cheapest option."
Chorus said it expected there would be opportunities for Broadspectrum staff to move to Downer, which has indicated it will be expanding its workforce to support the contracted work.
Visionstream will cover Auckland and all areas north of Auckland, Downer will be responsible for the rest of New Zealand. The contracts do not cover installation of new services.
“The new contracts followed a highly-competitive tender process that focused on identifying the right partners to deliver the right mix of speed, quality and price,” Chorus said.
Chorus said it had invested billions of dollars in upgrading both fibre and copper networks and that, on average, speeds had increased tenfold, and the number of broadband faults experienced by customers each year had almost halved.
It said these performance improvements, particularly the much lower number of broadband faults, had enabled it to take a fresh approach to sub-contracting its field force.
E tū happy with Downer, but not Visionstream
The appointment of Downer was welcomed by trade union E tū, but not the re-appointment of Visionstream.
Industry coordinator Joe Gallagher described Downer as a highly experienced infrastructure company and said the decision to award the company a new contract was reassuring in terms of the quality of maintenance work we can expect on the network.
However, he said the union was very disappointed that Visionstream’s network maintenance contracts in Auckland and Northland had been renewed, given the findings of the Ministry of Business, Innovation and Employment investigation around Visionstream’s employment practices.
“This can only be seen as Chorus’s way of telling the Government to mind its own business,” he said.
“These networks are critical infrastructure and in our biggest city, its care remains with a company that has been shown to support a sub-contracting model which has led to exploitation and breaches of basic labour standards.
In October 2018 a Labour Inspectorate operation targeting subcontractors rolling out Chorus' broadband network found almost all of them to be breaching employment standards.
“We will continue to monitor Visionstream’s compliance with employment standards and support any workers who need our assistance in Auckland and Northland.”
Gallagher added that Broadspectrum’s loss of the business would create major upheaval with its 450 workers being forced to find other jobs.