Business Support For Telecommunications Aggregation

A meeting held in Hutt City last Wednesday (19 Feb) and attended by council officers and business representatives from Hutt City, Porirua and Upper Hutt found broad support for a proposal to combine the telecommunications spend of businesses and local authorities across each city.

The meeting was called at the request of the cities' chief executives: Rik Hart (Hutt City), Dr Roger Blakeley (Porirua), Max Pedersen (Upper Hutt) who were all very pleased at the positive reaction from the business community.

"The key aim in combining, or aggregating, total telecommunications spend is to try to secure more competitive pricing for telecommunications services, said Rik Hart.

"In addition to obtaining better and cheaper telecommunications, we are also hopeful that the project may boost economic activity in the cities as a result of new infrastructure work," said Mr Hart.

Costs for some broadband services can be up to 200 per cent or more for the same service available in Wellington City.

"Of concern is the current high cost of broadband access for businesses, which is far more expensive than Wellington City and has been identified as a significant barrier to new businesses setting up in our cities," said Dr Roger Blakeley.

"All too often the high costs of services is also given as a reason for business leaving our cities," said Dr Blakeley.

"If the current situation was left to continue the fact is that parts of all three cities may never have affordable broadband services delivered by the current providers."

A key outcome from the meeting was the formation of a business led steering group who will now lead the project into the next stages, including getting formal commitments from all those businesses who indicated that they would aggregate their telecommunications spend.

The steering group will also decide on the form of an entity to represent the group and determine what sort of approach will be made to the potential telecommunications providers eg formal tender process, negotiations, etc

"The work of the steering group will be undertaken in parallel with the Governments project PROBE initiative. "The intention is to leverage off what result PROBE brings to the region," said Rik Hart

"Where these types of projects have succeeded elsewhere it is generally on the strength of a determined and serious commitment to the project from the business community," said Max Pedersen.

"The project will now be led by the business community, and they will have the full support of the City Councils who will commit their telecommunications spend and provide administrative and technical support to the project team," said Max Pedersen.

A recent survey of businesses across the cities found that:

· 85% of respondents expressed a willingness to be represented by a collective entity.

· 30 senior business leaders expressed a willingness to take a leadership role in the collective entity.

· The combined current annual telecommunication spend of those businesses is just under $5.7 million

· With the inclusion of the three City Council's the total telecommunications spend is approx. $6.5m per annum.

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