The government body handling the planned rollout of ultra-fast broadband has adopted a regional approach, rather than the national one favoured by Telecom.
Crown Fibre Holdings has shortlisted 14 firms, including Telecom and Vector, and started serious talks with three regional fibre providers - NorthPower in the Whangarei area, the Central North Island Fibre Consortium, and Timaru's Alpine Energy.
Telecom remains in contention for the remaining areas, but the Telecommunications Users Association's chief executive, Ernie Newman, says the phone company's preferred national approach is dead.
Mr Newman says Telecom will still need to split its business in two to participate, as it is already doing.
Its share price fell almost 5% on Thursday morning.
Canadian firm Axia NetMedia and its partner, Vodafone, have missed out, with Crown Fibre saying Axia's bid included elements that were not part of the Government's ultra-fast broadband policy.
Crown Fibre expects to recommend binding offers to the Government by October, allowing the rollout to start by the end of the year.
