Telecom Corp. of New Zealand Ltd. (TEL.NZ, NZT) and Vodafone New Zealand, the local unit of U.K.-based Vodafore Group PLC (VOD, VOD.LN) are to jointly build a broadband network for rural New Zealand, the government said Wednesday.

The government's rural broadband initiative aims to provide broadband services to 95% of rural schools and a minimum 5Mbps broadband service to 80% of rural households within six years and will provide a NZ$285 million ($224.8 million) grant for the project.

Mark Ratcliffe, chief executive of Telecom's network business Chorus, said that since each company's commercial agreement with the Government has been signed work would get under way immediately.

The two companies will jointly build open access infrastructure that will be able to be used by other retailers, along with Telecom and Vodafone, to provide competing services to rural areas.

-By Lucy Craymer, Dow Jones Newswires; 64-4-471-5990; lucy.craymer@dowjones.com
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