NZ signs first deals for its NBN

Telecom New Zealand has missed out in the first round of contracts announced today under the New Zealand Government's ultra-fast broadband initiative (UFB), as the first two contracts went to North Island power companies.

Northpower won the bid to roll out broadband in the Northland city of Whangarei, with work due to start within two weeks.

UltraFast Fibre Limited, a division of Waikato-based WEL Energy, will next year roll out broadband in the cities of Hamilton, Wanganui and Tauranga, with the smaller towns of New Plymouth, Cambridge, Te Awamutu, Hawera and Tokoroa to follow.

The two joint ventures, with Crown Fibre Holdings (CFH), a government entity created to operate its broadband initiatives, are worth over NZ$200 million and represent nearly 16 per cent of the UFB coverage. The overall initiative will see 75 per cent coverage of ultra-fast broadband across New Zealand by 2019. The roll-outs are due for completion by 2015.

Wholesale household prices will start at NZ$40 or less per month for an entry-level product and NZ$60 per month for the 100Mbps product. There are no connection charges for households.

NZ ICT Minister Steven Joyce said that CFH would "soon" announce the contracts for the rest of the country.

Today's news is seen as a blow for Telecom NZ, which had sought a national roll-out. But the telco remains in the running for Auckland and it says it is willing to partner with any successful bidder.

"We continue to engage in the process being run by CFH to determine the successful partners for the rest of the country; however, time is running out and we are conscious that our shareholders need resolution," said CEO Dr Paul Reynolds.