Spark announced plans to own core CBD fibre assets in Auckland and Wellington by June next year, saying it was open to alternative ownership structures.
Spark’s stated objective was to improve the experience of its business customers.
Ms Kinnaird said New Zealand’s three largest cities, Auckland, Wellington and Christchurch, all had spare fibre capacity.
In Auckland, Vector Fibre had an under-utilised but extensive fibre network across the Auckland CBD and beyond, competing with Chorus.
Vector Fibre also had a fibre network in the Wellington CBD, as did CityLink, owned by listed company TeamTalk.
Both competed with Chorus and had struggled to gain market share from Chorus.
Enable Networks was building a UFB-funded network in Christchurch in competition with incumbent Chorus.
"Spark ‘owning’ its own fibre in CBD areas makes sense if you consider the future needs of its mobile network — business customers provide icing on the top."
Most scenarios for 5G mobile services in the future featured significantly more cell towers where people and businesses congregated, such as CBD areas, Ms Kinnaird said.
Both business fibre and cell towers required fibre connections bought from the likes of Chorus and other fibre providers.Spark said it intended releasing a plan by the end of December about delivering its CBD fibre options.
While Spark had noted it was open to both acquiring existing assets or building a network, the object of owning assets by June would require existing assets.
Spark was considering options that provided ownership characteristics — upfront payment and freedom of use — but it was not tied to outright ownership.
Partial ownership was one option.
The cost of the option would vary depending on the coverage Spark was considering and the options offered.
Forsyth Barr expected $50million to $200million as being possible ranges, Ms Kinnaird said.
Forsyth Barr had an ‘‘underperform’’ rating on Spark, with a target share price of $3.40. Shares last traded at $3.99.
