NBN alternatives: NZ does the homework Australia should have done

Stuart Corner
Tuesday, 16 December 2008 03:41

Opinion and Analysis

In its conclusion, Network Strategies says: "Our business modelling indicates that the utility expansion approach has considerable potential for the widespread deployment of high-speed fibre-based broadband networks in New Zealand. We have also seen through our literature reviews that this approach has been a key contributor to broadband deployment in Denmark and Sweden."

In the New Zealand context, Network Strategies says it is the electricity lines companies that offer the greatest potential. "...these entities have existing resources and infrastructure that offer synergies with the telecommunications business that could ultimately lower deployment costs.

"This is not the case with other types of utility company as, unlike the situation in some European countries, there appears to be a lack of existing infrastructure (for example, systems of ducts appear to be fragmented) that could be harnessed economically for use in the rollout of a fibre network."

Network Strategies says its modelling "also illustrated the need for a long payback period due to the significant capital costs and the uncertain and potentially slow uptake," and it suggests this would fit well with the power companies.

"In New Zealand most of the lines companies are owned by consumer trusts and, assuming that there is strong local belief in the importance of broadband to the area's economic and social wellbeing and development, this ownership structure would tend to be sympathetic to longer payback periods.

"Furthermore in the electricity business assets typically have long lives and long payback periods, suggesting that the type of investment involved in broadband fibre deployment would fit well with the lines companies' traditional business models."

It's more than likely the answers in Australia would be rather different, but the questions have not really been asked.