Adams out of her depth – Pacific Fibre's Sam Morgan
After diplomatic comments on Wednesday as Pacific Fibre folded, co-founder Sam Morgan seems to have lost patience with ICT Minister Amy Adams.
This afternoon, the Rich Lister tweeted:
"Ministers just keep talking how there is plenty of capacity and a single monopoly provider is not a problem. IT minister out of her depth."
More jabs followed as the Pacific Fibre chairman worked his way through an Adams press release on UFB progress, which the minister says is ahead of schedule.
"UFB hits 1200 customers. $1.25m per connection so far, but should trend down," the Fairfax director tweeted, following up with: "1.6% of households with access to UFB have signed up already."
The government has always maintained it would prioritise health, education, business and government for the UFB, seeing the sectors as having the highest return on investment. Many households would have to wait five or six years or later through the 10-year project. (Telecom, which holds a majority of the retail market, will not even offer service until next year.) But state-owned Orcon has succeeded in switching attention to the pace of the residential roll-out.
Morgan finished his Twitter flurry with, "I'm a big supporter of UFB - I just wish we'd succeeded at Pacific Fibre and given it the best possible chance of success. It's a bummer."
The Trade Me founder isn't the only Pacific Fibre backer to take a swing at the government.
Earlier, Rod Drury questioned two political moves: the decision not to have an international rate card for the $1.35 billion Ultrafast Broadband (UFB) roll out, which would have allowed Pacific Fibre to bid for local fibre companies' international capacity requirements.
And the decision to leave the 50% Southern Cross Cable share inside the otherwise retail-focused Telecom rather than the wholesale/network spin-off Chorus (NBR ONLINE would add the government should have required Telecom to sell its Southern Cross stake as a condition of participating in the domestic fibre rollout).
On Wednesday, Ms Adams told NBR, "While a second international cable is seen as beneficial for New Zealand into the future, the success of the UFB programme is not in any way reliant on a second cable."
"Our assessments show the Southern cross cable has sufficient capacity in the medium term. In addition, UFB is likely to use significant amounts of locally cached content reducing its reliance on international bandwidth.
"Planned upgrades of the Southern cross cable will further enhance existing capacity."
Adams noted that the government had supported Pacific Fibre indirectly through government-owned tertiary broadband network operator Reannz, which had committed to a $91 million, multi-year contract with Pacific Fibre.
The dynamics of the market meant it was likely another cable contender would emerge, the minister said.
No private operator will follow - Drury
On Thursday, msDrury told NBR that no private contender would attempt to follow in Pacific Fibre's footsteps.
Retail internet service providers Vodafone, iiNet and CallPlus had signed on as anchor customers, but would be loath to do so again, Drury said.
Southern Cross Cable responds
"Southern Cross has no intention of increasing price," the 50% Telecom-owned, Bermuda-incorporated company's marketing manager Ross Pfeffer told NBR today.
"Our prices in NZ are the same as our Australian prices which are established in a highly competitive market where three international cable systems compete out of Sydney.
"Southern Cross consistently reduced prices prior to the advent of Pacific Fibre and will continue reduce price to support UFB and NBN as capacity upgrades allow and Australian competition demands."
The company has cut prices at more than 21% annually on average since 2000, Mr Pfeffer said.
ISPs have been split in their reaction.
CallPlus CEO Mark Callander told NBR there would have been big price reductions had Pacific Fibre's cable had gone ahead.
Snap chief executive Mark Petrie had faith Pacific Fibre would continue to cut prices.
Orcon boss Scott Bartlett said it would be "political suicide" for Southern Cross to raise prices in the meantime, but was concerned about possible future price rises.