Minister for Communications
|7 September 2016||
Early return of UFB funding highlights rollout success
Confidence in the future of UFB has resulted in an early buyout of Ultrafast Fibre from the Government, Communications Minister Amy Adams has announced.
“Waikato Networks Limited has been a great partner, completing its build in eight central North Island towns and cities six months ahead of schedule. With this work complete, the Crown no longer needs to hold its investment in the network and Waikato Networks Limited wants to take over full ownership early,” says Ms Adams.
“It’s a testament to the success of the Ultra-Fast Broadband (UFB) initiative that a build partner should seek to buy the Crown out three and half years earlier than planned.”
Waikato Networks Limited (a WEL Networks subsidiary) is taking full ownership of the local fibre company Ultrafast Fibre, previously jointly held with Crown Fibre Holdings (CFH).
“On settlement, the Crown will have received $189 million, or 95 per cent, of its original $198 million investment, three and a half years early. This deal delivers enormous value for money for taxpayers.”
The early exit transaction has Waikato Networks Limited making a payment to CFH in lieu of its remaining financial obligations. Although no longer a shareholder, CFH will maintain contractual oversight over products, network performance and customer connections until 2019.
“New Zealand is a global leader in the rollout of fibre-to-the-premise on all counts. It’s outstanding for a Government partnership to have delivered this digital infrastructure at such a low cost to the taxpayer.”
Ms Adams said the speed with which UFF completed its UFB deployment and strong uptake had delivered a more favourable outcome than was originally envisaged.
“Uptake in Ultrafast Fibre’s coverage areas is very strong at over 28 per cent, compared to 25 per cent nationally. This includes Tauranga, which has the best uptake in the country at 33 per cent.”
Ultrafast Fibre has deployed UFB past more than 190,000 homes, businesses and schools and around 11 per cent of the population in Hamilton, Te Awamutu, Cambridge, Tauranga, Hawera, Tokoroa, New Plymouth and Whanganui.
Media contact: Julian Light 021 243 8528
Ultrafast Fibre at a glance:
· Waikato Networks Limited (WNL) is 85 per cent owned by WEL Networks Limited and 15 per cent owned by Waipa Networks Limited. It was established to partner with CFH in the UFB initiative
· CFH’s contract with WNL had it making recycling payments each quarter based on connections up to 2020, when the remaining CFH investment would be put to WNL
· For clarity, recycling is the mechanism where each quarter WNL purchases CFH’s A shares at face value in proportion to the connections made in that quarter
· On settlement CFH will have received 95 per cent ($189 million) of its original $198 million investment. Together with WNL’s cost to connect customers, the joint investment in the central North Island UFB network has been over $300 million.