Railways, TVS to rival Telecom network

Press, 28 May 1988, Page 9

Railways, TVS to rival Telecom network

By

NIGEL MALTHUS

A joint venture between the Railways Corporation and the third television channel consortium will provide Telecom Corporation with its first competition in the lucrative field of national telecommunications transmission.

Railways and the TV3 group sighed an agreement yesterday for a joint-venture company to run the new network. The network will use fibre-optic cables laid beside railway lines, initially linking Wellington, Auckland and Tauranga. The next stage is likely to lie beside the main line between Picton and Dunedin.

The two parties will use most of the system’s capacity themselves, but the excess will be available for commercial users, for voice, data, television and other video transmission.

Although at first sight strange bedfellows, Railways and TV3 are natural partners for the venture; TV3 requires a high capacity telecommunications link for programme transmission between its network bases, while Railways is completing a fibre-optic cable link between Auckland and Wellington.

The link was installed between Palmerston North and Hamilton as part of the North Island Main Trunk electrification project, initially to handle

internal communications, and is being extended north and south.

A link to Tauranga will connect TV3’s three North Island studios by the time the third channel begins broadcasting next March. A joint statement by the Railways general manager, Mr Kevin Hyde, and the managing director of TV3 Auckland, Mr Tom Parkinson, said that once that was completed, the laying of a similar cable in the South Island would be investigated. Extension throughout New Zealand would depend on demand, they said.

The manager of TV3 Southern, Mr Trevor Spitz, said that he saw the extension through the South Island as a “firm intention,” although there was no specific date for its installation.

There might be a question over whether it would extend to Invercargill or branch off into areas such as Queenstown, said Mr Spitz. Television Three will, perhaps ironically, depend on Telecom microwave links for transmis-

sion services to areas where the Railways TV3 link does not extend.

Laying the link along railway lines will use Railway’s existing rights of way, obviating the costs and complications of negotiating with third parties for land use rights. The ploy, already established for commercial telecommunication links overseas, could provide an extensive network for New Zealand.

Nelson is the only main city not served by rail, but it is believed that the Railways still enjoys right of way over at least some of the route of the planned, but never built, Nelson branch line.

Telecom Corporation, whose monopoly on network telecommunications links is expected to end early next year, welcomed the competition. It was particularly pleasing that a New Zea-land-based company was joining Railways in the venture, said Telecom’s managing director, Dr Peter Troughton. It recognised the need for competition and for Telecom to be seen to be

competitive rather than just a deregulated monopoly. “Telecommunications is a growing marketplace with a requirement for many new services, and provides a good opportunity for many companies to operate profitably in this expending sector,” said Dr Troughton. The Railways’ corporate manager of planning, Dr Murray King, said that space in the cable would be leased at “competitive rates with Telecom.” The cost of the project, he said, was confidential but “in the tens of millions of dollars.” The cable will have an initial capacity of 565 megabits a second, of which TV3 will take about half for television and video transmission. Railways will use a smaller amount for its voice and data transmission.

The rest will be leased in packets of at least two megabits a second — sufficient capacity for a typical bank’s voice and data requirements. Messrs Parkinson and Hyde said that they were confident of a strong de-

mand, given the highquality digital transmission of optic fibres, and its competitive price.

“We see it as an area with tremendous potential for growth and one that will generate considerable revenue for both organisations,” they said. It was unlikely to be used in direct competition with Telecom’s main revenue-earning area of household telephone services, but would compete in the leased circuit segment of Telecom’s business.

It also had the potential for Pacific-wide telecommunications links, through TV3’s purchase rights to space on a satellite to be launched in 1991. Mr Parkinson said that the link would provide TV3 with a number of opportunities, in addition to a “superior” link between studios. “It means we can offer multi-channel television and lead the New Zealand market in narrowcasting where, say, sports, news, or music channels are transmitted to specific groups who pay a fee for the service.”