Telecom NZ shares fall 5% on UFB snub

Telecom NZ shares fall 5% on UFB snub

Shares in Telecom New Zealand (ASX:TEL) are down 5% today on the news that the New Zealand government has snubbed it from a list of initial partners for its Ultra-Fast Broadband (UFB) Initiative.

Crown Fibre Holdings, the entity set up to construct the network, has commenced initial negotiations with regional fibre providers NorthPower, Central North Island Fibre Consortium, and Alpine Energy.

In a statement, Telecom NZ said the coverage area of these three parties is only around 12% of the population of New Zealand, while Crown Fibre has a goal of 75% population coverage by 2019.

The company was shortlisted in all regions, the statement added.

“We recognise that our bid is more complicated than those of other bidders, and that Crown Fibre Holdings does not have a mandate in the areas of RBI, regulatory reform and legislative change,” Telecom NZ CEO Paul Reynolds said.

He added that the company is ready and willing to work with the government, and that its proposal includes a commitment to structurally separate to negate the government's antitrust concerns.

TEL shares have fallen from $1.675 yesterday to $1.590 today, with a low of $1.570.

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Tags TelecommunicationsTelecom NZASX:TELPaul Reynolds

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