CityLink fears Vector could be stalking horse

This morning, Crown Fibre Holdings announced Vector as a surprise second priority bidder in Auckland, vying against the previously named Telecom.

But in Wellington, where a similar situation exits, Telecom remains unopposed.

CityLink, owned by listed TeamTalk (NZX: TTK), bid for the capital but was culled at the priority bidder stage.

Teamtalk chief executive David Ware told NBR this morning he was not sure whether Crown Fibre Holdings are serious about doing business with Vector in this morning’s priority bid announcement for the Auckland Ultra Fast Broadband network.

“I’m not sure whether Crown Fibre Holdings (CFH) are just looking for a stalking horse [to drive a better deal from Telecom] or whether they’re genuinely committed to looking at options other than Telecom.”

Teamtalk owns fibre network operator in Wellington, Citylink, which was cut out of the bidding for the Wellington area when Telecom was announced the priority bidder.

Mr Ware said Citylink would adopt a ‘wait and see’ approach, since the bidding process had become a “moving feast”, that alternated between being attractive and not.

“It all depends on when the music finally stops who’s still there. We’re obviously very keen on it but we’ll only do it if it makes commercial sense.”

He said if Crown Fibre Holdings were genuine in their inclusion of Vector he was very happy for the New Zealand Regional Fibre Group (NZRFG) member.

“If they are serious, I think that’s great and I’m quite pleased Vector is leading the push and fighting the good fight.”

However he said there were several issues and problems that needed to be solved before other NZRFG members could sign contracts with CFH.

“Let’s hope they can blaze the way for the rest of us.”

But Mr Ware is confident CFH will be back in contact regarding the bid. “I have no doubt we’ll be talking to Crown Fibre in due course.”

In the meantime, the company is set to compete with Telecom in Wellington fibre services no matter the outcome of the CFH bidding process, with an expanding network and new products.

“We have done so for the last fifteen years and I see no reason why we can’t compete very successfully for the next fifteen years. If Telecom wins, it’s business as usual and if we win, we have to dig up a lot of roads.”