Chorus inks major network deals looking beyond UFB
Chorus has inked new contracts with two service companies to undertake maintenance and expansion of its copper and fibre broadband networks.
Visionstream will cover Auckland and all areas north of Auckland, while Downer will be responsible for the rest of New Zealand.
The total approximate value of the contracts, which will run from 1 July to 31 March 2022, is about $450 million, subject to future volumes and mix of work. The new contracts are separate to the rollout of the UFB communal build and UFB fibre installations.
Downer separately told the stock exchange its share of the deal was worth approximately $220 million.
Under the previous contracts, the equivalent work was done by Downer, Visionstream and Broadspectrum.
Chorus said it had invested billions of dollars in upgrading both fibre and copper networks since 2011, delivering substantial improvements in speeds and reliability.
Speeds on average increased tenfold, and the number of broadband faults experienced by customers each year have almost halved.
This enabled Chorus to take a fresh approach to sub-contracting its field force.
Chorus GM network and field management Andrew Carroll said the new contracts are the first step in moving Chorus beyond the major UFB network build and connect programmes and into an operating model that provides the ongoing experience customers expect.
The contracts follow a tender process that focused on identifying the right partners to deliver the right mix of speed, quality and price.
“Given their importance to our business, it is essential that our service companies have enough volume and scope of work to provide sustainable services and have the ability to invest in people and infrastructure," Carroll said.
"As such, we have chosen partners who we are confident will deliver the right overall results, not just the cheapest option."
The chief executive officer of Downer, Grant Fenn, said that the agreement would expand Downer’s delivery of extensive network maintenance and build services in New Zealand.
“This contract doubles our geographic spread and we will work with Chorus on the construction and maintenance of their network," he said.
There are expected to be opportunities for Broadspectrum staff to move to Downer, who have indicated they will be expanding their workforce to support the contracted work.
