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Vodafone proposes co-investment to deliver Ultra-Fast Broadband

A co-investment partnership with an end-to-end business plan including building, achieving penetration, and deriving retail revenue is being proposed by Vodafone as a sustainable way to deliver Ultra-Fast Broadband to New Zealanders.

In a white paper released today, Vodafone acknowledges its concept will require a level of cooperation between the government and investors not previously contemplated but says new thinking is essential for what is likely to be the most significant contribution to New Zealand’s growth in the next 20 years.

“We fully support government’s vision that the economic and social benefits of a national fibre infrastructure will be significant. Vodafone shares that excitement but knows from its own experience that without a carefully constructed delivery plan, it could remain only a vision,” says GM Corporate Affairs Tom Chignell.

In what is likely to be the biggest single intervention in the telecommunications industry in years Vodafone believes the government needs to have a high level of confidence that the end-to-end business plan will deliver its objectives. 

The co-investment model is based on companies which take the risk receiving a commensurate return on their investment, rather than leaving the retail equation to be solved at some future date.

“Simply contracting to build the network with parties who have no retail skin in the game is only managing one of the three main risks (cost to build).  Vodafone is suggesting that a partnership with a set of investors who have an end-to-end business plan (including building, achieving penetration, and deriving retail revenue) is a safer route to follow.”

The concepts developed combine government, industry and investor objectives to meet customer needs and government visions and have drawn on the global experience of the Vodafone Group.