Shares in Telecom NZ have fallen on the news it will likely be excluded from the first-round rollout of New Zealand's Ultra-Fast Broadband (UFB) project.
Crown Fibre Holdings, the company behind the rollout of the UFB, announced it has selected three companies for prioritized negotiations for the first stage of the build.
Power companies Alpine Energy and Northpower, and the Central North Island Fibre Consortium have been shortlisted.
“These three parties have displayed the best proposals including a combination of access prices, funding provisions, industry experience and financial backing,” Crown Fibre chairman Simon Allen said.
Telecom NZ has been shortlisted in all 33 candidate areas, but the company is just one of 11 other candidates not selected for priority discussions. Only one applicant - Canada's Axia NetMedia, an investor in Singapore’s NBN - has been excluded from the shortlist.
In a statement, Telecom NZ said it estimated that the three prioritized companies have a coverage area of around 12% of the New Zealand population, and that by comparison its proposal is national.
The company implied it would need to be told soon whether the government accepts its proposal to participate in the rollout, which involves splitting its wholesale and infrastructure units to comply with the government's stipulation that retail operators can't participate in the rollout.
“Telecom's proposal includes a potential structural separation by demerger in July next year. Telecom will need appropriate engagement with the whole of government in order to meet this challenging timeframe,” CEO Paul Reynolds said.
News of the exclusion sent Telecom NZ's domestic shares sliding from an opening price of NZ$2.14 yesterday to a low of NZ$1.96 today. It's Australian-listed shares fell 5.1% on Thursday to A$1.590 ($1.46).
New Zealand's government-led UFB project involves rolling out an NZ$3 billion ($2.2b) national fiber network to cover 75% of the country's population.
The other companies shortlisted for participation are CityLink, the Central Fibre Consortium, Electra, Electricity Ashburton, Enable Networks, Flute Network, Network Tasman, Network Waitiki, Vector and Westpower.
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