Vodafone, Spark and 2degrees submit joint for RBI 2

Vodafone, Spark and 2degrees have submitted a joint bid for the $150 million Rural Broadband Initiative 2  — $100 million of which will go to improving the internet and $50 million to fixing cellphone blackspots in remote areas.

The three carriers will inject an additional $75 million in equal shares if they're successful in winning the government's $150 million funding for RBI extension and mobile black spot fund and expect to spend hundreds of millions of dollars more operating the infrastructure. The proposal would see an extra 500 new cell sites delivering a 25% increase in land coverage across New Zealand to meet the Crown's goal of ensuring 99% of the population has access to internet speeds of at least 50 megabits per second by 2025, with remainder getting at least 10Mbps.

The bidding process closed last night.

So far, two other parties have confirmed they are in the running: Chorus, and individual members of WISPA — an alliance of small ISPs, who were offered special terms by the government to encourage regional bids.

The $300 million RBI 1 tender was won by a joint bid placed by Vodafone (handling new and upgraded rural cell towers) and Telecom (responsible for upgrading rural landline), with the spun-off Chorus inheriting the landline work.

The government is funding RBI 2 by extending the $50 million a year Telecommunications Development Levy for three extra years (it initially planned to scale it back to $10 million from 2016).

If Chorus, Spark and Vodafone (who together pay most of the levy) win major chunks of RBI 2, it essentially becomes a money-go-round, with their levy contributions returning to their pockets as government grants. But if WISPA members do manage to score some of the funding, they won’t be so happy.

Winners of the RBI 2 tender will be named by Crown Fibre Holdings later this year.