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New Zealand Must Learn From Mistakes In Oz

Contributor:
Fuseworks Media
Fuseworks Media

Auckland, Dec 22 NZPA - New Zealand must learn from mistakes made in Australia when developing a national broadband network, senior Telstra officials said today.

Speaking on an innovative video link from Melbourne to journalists in Auckland, public policy managing director David Quilty and Tony Warren, regulatory affairs executive director, urged care.

"In Australia, the government has put out fibre as the preferred solution. But while there are a lot of locations where fibre is the best solution, in other locations wireless is likely to be the best solution," Mr Quilty said.

"You need to be very careful with being technology prescriptive in terms of subsidies. I think that you need to set up a subsidies system that actually encourages use of the most sensible technologies for particular locations.

"It's not rocket science. Just get the framework right for the investment. Make sure you can get open access as well as a commercial return, so the regulator can't change their mind."

Mr Warren said New Zealand Prime Minister John Key had followed the Australian situation quite closely with the broadband plan.

"My advice would be, get your regulatory settings right for the cities and don't worry so much about places like Stewart Island and Fiordland. Don't put your money where commercial arrangements are never going to work, where the market will never deliver broadband.

"It might be Telecom that runs it, it might be the electricity companies that run it, but get the regulatory framework right and target your money," he said.

Their comments come just a week since Telstra was ejected from the tender process by the Australian government, impacting its share price significantly.

"There are reasons why the government saw fit to subsidise a competitor, and in our view the best way to minimise the risks is to take control of the areas which are under our control," Mr Quilty said.

"People are subscribing for wireless broadband until next June in droves, so we're looking at very large increases in revenues per year on the wireless network. And there are more opportunities to go further with that network within our control."

The National Party announced in April it would invest up to $1.5 billion to drive the roll-out of a "fibre to the home" ultra-fast broadband network.

National's medium to long-term vision was for a fibre connection to almost every home, supported by satellite and mobile solutions.

Around 75 percent of New Zealand homes would benefit, with priority in the first six years given to businesses, schools and health facilities.

Mr Warren said he was a supporter of high speed broadband and he believed there would be a significant increase in the take-up of high speed services over the coming years.

"Once people have a better understanding of how broadband can be used simultaneously to do a range of things, from business to education to entertainment, you will see a pretty serious upgrade as we go into the next decade.

"I don't think we know the figure for implementing it in New Zealand. The $1.5 billion the New Zealand government is talking about investing is just a proportion of the total cost. Labour estimated it would cost $8 to $10 billion and National estimated $4 to $5 billion, but there's so many different variables to consider," Mr Warren said.

Independent specialists believed the economic benefits of having a national fibre network across New Zealand would be worth between $2.7b and $4.4b per year.

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