Telecom NZ preferred bidder in broadband rollout

NEW ZEALAND: New Zealand's dominant phone company, Telecom Corp , has been selected as preferred bidder to build the bulk of the country's national broadband network, the government agency running the project said on Monday.

Telecom is the preferred bidder in 25 of the 33 regional tenders, including the largest population centre, Auckland, and the capital, Wellington.

It had previously put up a national plan to build the network, which could cost as much as NZ$7.5 billion ($5.6 billion), to supply high speed Internet through fibre-optic cables to the majority of New Zealand homes.

Telecom's plan depends on splitting off its network operations, with a demerger being the preferred option.

Chief Executive Paul Reynolds said it continued to believe that its fixed line operation was the ideal basis for the government-funded plan.

"We reiterate our openness to partnership with other public and private sector owners of fibre assets where partnership can improve the overall economics and deliver fibre further and faster," Telecom Chief Executive Paul Reynolds said in a statement.

In September Telecom said i had missed out on being shortlisted in eight regions with its main opponent, a consortium of electricity lines companies, going on to strike agreements in seven of the eight regions. Negotiations for the other region are continuing.

While Telecom has been names as a prioritised bidder it is competing against two other companies in the main South Island cities of Christchurch and Dunedin.

Binding agreements are expected to be struck in the first quarter of 2011.

The government, who is part funding the network with NZ$1.5 billion in grants, has said network builders and operators can not also be retail providers of phone services, which excludes the former state-owned monopoly.