It's a few months late, but Taitokerau Networks (a limited partnership between six iwi and Wellington company Datalight) has made good on its promise to build a new broadband connection between Auckland and Whangarei.
State-owned China Telecom is bankrolling the project,and supplying materials logistical support for FX Networks and Datalight, who are designing, building and sellng the new network.
Construction is now underway on the $8.5 million, 200km Auckland-Whangarei fibre optic cable, due to be completed in five months.
Over the next two years, further cable will be laid connecting the Bay of Islands, Kaeo, Kaitaia, Hokianga, Dargaville, Awanui and Waitiki Landing, and an eastern route returning from Whangarei to Auckland to form a total network running more than 700km.Te Rarawa chairman Haami Piripi told NBR this morning. The $8.5 million budget announced so far covers only the 200km Auckland to Northland leg.
Four kilometres of cable have already been laid in the Wellsford (north or Auckland) to Maungaturoto.
The project breakdown
China Telecom subsidiary Axin is suppling the finance and materials.
FX Neworks is handling design, construction and dark fibre (wholesale bandwidth) sales, linking to the operator's existing national contracts.
Datalight is project managing, and desigining and constructing layer two (retail or lit fibre) services.
The network will be a not-for-profit venture, and interconnect to rural schools, health providers, farms, businesses, marae and households with the government-backed Ultrafast Broadband and Rural Broandband Initiative fibre roll-outs.
Snubbed
As first-reported by NBR (below), in February, Taitokerau Networks announced it had financial backing from New Zealand's Datalight, with Counties Power and Axin (a China Telecom subsidiary recently seen teaming with Huawei Marine to move in on Pacific Fibre's turf) on board for the logistical side of the build.
Mr Piripi told NBR "the irony is not lost on us" that a Chinese government-owned company was financing the deal after Finance and Infrastructure Minister Bill English turned down Taitokerau Networks' request for funding.
Debt-funded
A debt-equity arrangement meant Axin was the main funder of the build, but would not have any long term ownership stake, Mr Piripi said.
Taitokerau Networksexpects returns to Iwi start exceeding investment within two years.
High-speed, no datacaps
No indicative pricing has been released (other than to say customers can expect "significantly reduced broadband costs". But on paper at least, the iwi network is looking sharp.
In its promotional material, Taitokerau Networks is promising speeds between 100Mbit/s and 1Gibit/s (1000Mbit/s), "simple monthly rental, nil data caps, no core network complexities or risks, ‘point-to-point’ fibre configurations, minimal operational risk (99.995% availability), private networking capacity, high fibre count to cater for rural connections."
In and out
In Feburary, NBR reported that Counties Power would partner with Axin on the build.
The utility has now dropped out of the picture.
But FX Networks is now onboard, along with original equity partner Datalight (Datalight is co-owned by Roger De Salis - erstwhile son-in-law of Colin Hill, the Isle of Man tax-exile owner of FX Networks).
Tight crew
It's a familiar alliance. Taitokerau Networks, Opto Network (yet another De Salis vehicle) and FX Networks teamed on the Torotoro Waea bid for the government's $300 million Rural Broadband initiative.
Torotoro Waea was one of three on the shortlist for the tender, ultimately won by a joint bid from Telecom and Vodafone (although back-room politics saw the government establish a new advisory board, Nga Pu Waea, to liaise with Telecom and Vodafone over iwi employment and development opportunities on their rural roll-out. The move helped National shore-up Maori Party support for the separate, $1.35 billion ultrafast broadband initiative after several Act MPs reversed their earlier support for the enabling legislation, the Telecommunications Amendment Act).
A tangled web of alliances saw FX Networks also support the third short-listed bidder, OpenGate - a consortium that consisted of FX, Woosh Wireless and state-owned Kordia - which has told media over the past couple of days it is now in talks with Axin over a range of possible projects.
While still smarting tht the Torotoro Waea rural broadband bid was snubbed by the MED and Communications Minister Steven Joyce, Mr Piripi was full of praise for China Telecom's Axin.
"Their technical knowledge and expertise and understanding been absolutely fantastic," the Te Rarawa chairman told NBR this morning.
"We've been absolutely amazed by the integrity and the helpfulness of our Chinese partners."
Iwi consortium, backed by China's Axin, plans $9 million Auckland-Whangarei fibre link
February 4, 2011: A consortium of three Northland iwi is planning to construct a $9 million, 200km fibre optic cable line between Auckland and Whangarei.
The project is set to start in a month, and take five months.
The iwi (Whaingaroa, Ngati Whatua and Te Rarawa) will join with equity partner Datalight in the venture, to be known as Taitokerau Networks.
Datalight is co-owned by Roger De Salis - erstwhile son-in-law of Colin Hill, the Isle of Man tax-exile owner of FX Networks, allied with state-owned Kordia and Woosh in a bid for the government's $300 million rural broadband tender.
Mr De Salis maintains a small holding in FX Networks, and is also the founder of Opto Networks, an FX Networks partner. Opto is aligned with the quixotic Torotoro Waea bid for the $300 million rural tender.
A spokesman for Taitokerau Networks, Andrew Melville, told NBR that the project, still in its design phase.
Once complete, the new cable will have to compete against Telecom and TelstraClear's respective fibre connections between Auckland and Whangarei.
Contractor lined up, power company and Chinese onboard
"Negotiations will be finalised in the next two to three weeks with a number of contractors through the OPTO consortium to project manage and build the network," Mr Mellville said.
Axin Limited, a joint venture between Counties Power and Shanghai Communication Services (a subsidiary of state-owned China Telecom), will be carrying out project management and design services.
The Companies Office lists Axin as being half owned by Sino Telecom, whose two shareholders are Robin Lee and Fei Ling, both of Mt Eden, Auckland.
Reinvesting
Te Rarawa chairman Haami Piripi said the business model was designed to stimulate Northland's regional economy, and in particular, Maori communities.
"We have designed the model to ensure there are returns to cover our costs, and that will also enable an adequate level of profit to reinvest in our communities."
Mr Mellville added, "To begin construction, capital structure for the project is confirmed and includes a number of different tranches of equity and debt capital reflecting differing levels and extents of participation by members of the Limited Partnership mentioned in the release and of external finance providers."