Govt extends UFB to include more Otago towns

Graphic: Supplied

Twelve more Otago towns and several fringe areas will benefit from the Government's extension of its ultra-fast broadband (UFB) programme.

Communications minister Simon Bridges announced today that Clyde, Cromwell, Roxburgh, Balclutha, Milton, Dunedin Fringe, Outram, Waikouaiti, Arrowtown/Lake Hayes Estate, Arthurs Point, Wanaka/Lake Hayes, Queenstown Fringe - Jacks Point, Queenstown Fringe and Oamaru Fringe - Weston were included in the extension.

The $30.1 million investment in the programme for Otago was the Government's way of showing its focus on growing the region's economy, Mr Bridges said.

"This means more productive businesses, improvements to health care through video-conferencing between doctors, specialists and patients, and improved access to online resources for students and teachers," he said.

About an extra 36,000 people throughout the Otago region would benefit from the extension, allowing those in smaller towns access to the same broadband quality that is already experienced in larger centres, he said.

“Once the full UFB programme is complete, more than 179,000 people in Otago will be able to access UFB,” Mr Bridges said. 

Queenstown Lakes District Mayor Jim Boult said the extension of the coverage would be welcomed by residents and businesses in the newly included areas.

“I am delighted to see that several of our communities will benefit from ultra fast broadband sooner than we had hoped. Access to high speed data is crucial to businesses while our residents and the thousands of visitors also have expectations of improved connectivity.

“It’s very pleasing to see the Government delivering on its promises of better broadband connectivity for people living outside the main centres,” he said.

The four existing companies partnering with the government to build a nationwide ultrafast fibre broadband network have each got a slice of the $300m expansion.

Northpower, Ultrafast Fibre, Chorus and Enable have been awarded contracts to extend the network to 151 extra towns, which Mr Bridges said will provide fast internet services to 85% of the population by the end of 2024. The extension initially sought to cover 80% of New Zealanders by 2022 at an expected cost of between $152m and $210m.

"Phase two of the UFB build will see fibre rolled out across all mainland regions, to 151 more towns plus 43 suburban fringe areas around the larger centres which were covered by the first phase of the programme," Mr Bridges said in a statement. "This will provide around 423,000 additional New Zealanders in both rural and urban areas, from Ruatoria to Reefton, with access to world-class broadband."

The government campaigned on the initial $1.5 billion UFB in 2008, which ultimately saw Telecom Corp, now Spark New Zealand, carve out its network business Chorus as a standalone entity to participate in the project. Chorus won the lion's share of the contract, though Enable, Northpower and Ultrafast Fibre each secured smaller regions.

Separately, Chorus said it will extend UFB to a further 169 regions, adding more than 200,000 households and businesses to its network. It estimates the second tranche of the build will cost between $370m and $410m at an average cost per household of $1500 to $1700. The first tranche of the network, which is more than halfway through, is expected to cost between $1.75b and $1.8b.

Chorus said the new deal does not change capital expenditure or dividend guidance for the 2017 financial year.

Ultrafast Fibre parent WEL Networks said its extension to 12 new communities will cost an extra $60m, taking its total investment to $450m, while Northpower's new work in 12 towns will cost another $30m.

Mr Bridges said the second phase of UFB work will start this year, with each build area completed within a 12-month period " in order to provide as little disruption as possible".

 - BusinessDesk with additional reporting by Otago Daily Times