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Prime Minister John Key made the announcement today during a visit to the Waikato Institute of Technology.
Currently the ultrafast broadband (UFB) roll-out aims to connect 75 per cent of all New Zealanders by the end of 2019. Today's proposal would push that commitment to 80 per cent, which would reach an extra 200,000 New Zealanders, at a cost of up to $210 million.
"It's the most ambitious communications infrastructure programme in the world, given our low population density,'' Mr Key said.
Last week Mr Key announced a $150 million plan to extend rural broadband to sparsely populated areas.
"Together with today's announcement, this means almost every New Zealander will be able to access fast, reliable internet services.''
National's ICT spokeswoman Amy Adams said the extra towns to be included would be the result of a competitive bid process, taking into account the cost of deployment, strength of consumer demand, and regulatory and other assistance from local authorities.
"This could see a number of towns be strong contenders for inclusion in the UFB extension, including: Te Puke, Motueka, Morrinsville, Kerikeri, Huntly, Thames, Matamata, Otaki, Kawerau, Waitara, Kaitaia, Dannevirke, Alexandra, Stratford, Whitianga, Cromwell, Taumarunui, Picton, Foxton, Kaikohe, Marton, Te Kuiti, Katikati, Temuka, Waihi, Waipukurau, Warkworth, Carterton, Dargaville, Opotiki, Snells Beach, Te Aroha, Wairoa, Paeroa and Westport.''
She said there would be a competitive tender process for companies to build the extra network, and Northpower had already put its hand up.
She said the current programme was ahead of schedule and nearly 40 per cent complete, rolling out across 33 towns and cities.
"We have reached the stage where it's in reach of half a million premises across New Zealand. That means over a million New Zealanders are already within reach of the UFB programme.''
Reliable, fast internet has the potential to drive innovation, creating jobs and stimulating economic growth.
The funding is coming out of the Government's Future Investment Fund (FIF), which sprung from the partial sale of state assets.
Mr Key said the FIF was "certainly down to its last billion''.