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Fonterra and Telecom Reach Broadband Agreement

Fonterra and Telecom today announced they will roll out a new high-speed broadband Internet access service for Fonterra's 17,000 dairy farmers. The agreement is with Fonterra subsidiary Fencepost.com Ltd.

The two businesses have combined their resources to put in place an agreement that will bring high speed, quality internet access to all Fonterra's dairy farmers throughout New Zealand within approximately 18 months of the launch date, planned for November 1.

"Fonterra has taken a leading role over the past two years in trying to bring greatly improved telecommunications services to rural New Zealand," says Fonterra Director for Shareholder Services, Barry O'Donnell.

"We recognise the importance and potential of online applications for improving communications and interaction with our suppliers and we're pleased that Telecom has joined us in seeing the potential of this initiative and bringing it to our farmers.

"This is a break-through in terms of e-farming and in around 18 months 100% of our current suppliers will be able to have fast, secure, on-demand access to a dedicated broadband link providing key information from the company that affects farming decisions."

Telecom General Manager Corporate Sales Mark O'Donnell says details are still being finalised but Fonterra's farmers will have:

* High-speed, secure access to Fonterra information and to the Internet

* Internet services, such as email, email anti-virus protection, content screening services and other tools

* Special web based applications on Fencepost.com, where all Fonterra suppliers can monitor and enhance farm production

* Ongoing technical and user support via a designated help line

* Discounted national and home to Telecom mobile phone calling

* A free "Calling Circle" of up to 9 other Fonterra suppliers on the package plus the Fonterra call centre.

"Installation costs for the service will depend on the type of technology employed - wire, wireless or satellite. Monthly rental for the package will probably cost suppliers between about $60 and $100 plus GST per month," says Mr Mark O'Donnell.

It is anticipated about 35% of the Fonterra farmers will be able to access the Telecom service using existing copper wire networks, while about 50% will have access via BCL's wireless broadband service, and 15% will be covered by satellite.

"Broadband coverage will almost always end lengthy log-on and log-off delays and interference from electric fences. We know that over 70% of our farmers currently have Internet access or interference problems. Broadband also allows you to use the phone and Internet at the same time," says Mr Barry O'Donnell.

"Supplier communication costs, especially in hard copy print, are expected to decrease while the high speed and fast access of broadband will reduce time farmers spend on line by up to 80% for the same number of pages. This package seriously opens the potential for technology that'll monitor and control farm systems."

The package is complementary to the objectives of PROBE and Fonterra and Telecom have kept the Government and the Project Probe team informed.




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