Chances slim for Vector: broker

Suzanne Kinnaird
Suzanne Kinnaird
Electricity lines company Vector was being overly optimistic to think it still had a realistic chance of being part of the Government's ultra-fast broadband (UFB) initiative, Forsyth Barr broker Suzanne Kinnaird said.

Crown Fibre Holdings announced the companies it favoured for priority negotiations and its shortlisted companies, Vector appearing on only the shortlist for Auckland.

Telecom was listed for 25 of 33 areas including Auckland and Wellington but it could also win Dunedin and Christchurch.

Ms Kinnaird said Vector had emphasised it was still on the shortlist and therefore not out of the running.

It pointed to the fact it had an information request due in today as evidence it was still in the game.

"Vector also wanted to highlight the fact that this proved it was only going to go for UFB if it made commercial sense, and reiterated that the prices the Government released last week didn't make the UFB a commercial reality for it.

"They believe it is too early to say how this impacts on its current fibre network."

Vector might still be able to sell access on its lines so it might still get something from the process, she said.

Telecommunications company TeamTalk acknowledged it was out of the running and Telecom had won, Ms Kinnaird said.

"TeamTalk believe Telecom got it because the other regional players - everyone except Vector and TeamTalk - weren't up to speed on the requirements to own and operate a fibre network.

"The Government then got worried about the ability to deliver across the country, meaning in many areas, Telecom was the only viable offer."

For the deal to make sense, Telecom had to win Auckland and Wellington, making TeamTalk and Vector collateral damage, she said.

TeamTalk and Vector shares were both down 2c on the announcement.

 

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