"˜Massive' $1.5b needed for broadband plan, says New Zealand Telecom

07 May 2007

(New Zealand Herald via NewsEdge) New Zealand Telecom said the New Zealand government needs a 'massive' $1.5 billion investment, if it is to hit its broadband target.

The carrier, in a formal response to a government regulatory proposal, also said that only a fresh approach to the problem would bridge the 'broadband investment gap'.

New Zealand Telecom faces structural separation and the Ministry of Economic Development (MED) has produced a paper outlining how the changes might be achieved.

But the carrier has retorted with a 'simpler' solution which could involve selling its fixed line phone network.

New Zealand Telecom chairman Wayne Boyd warned that under the MED's proposal, only about half of New Zealanders would get fast broadband access in four years time.

The government wants 90% of New Zealanders to receive 5Mbps broadband by 2010.

But Boyd said under the present proposal, the carrier could only invest one third of the $1.5 billion required.

Boyd said in Britain, where the so-called BT model of regulatory reform has been in place for nearly two years, the same warning bells were ringing.

He said an independent British report released last week said there seemed to be little prospect for the widespread deployment of next generation broadband access networks because large scale investment could not be justified.

© 2007 New Zealand Herald

© 2007 Dialog, a Thomson business. All rights reserved

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