2degrees on $100m expansion path

2degrees chief executive Eric Hertz would not specify on where the network would expand as he did not want to give his competitors the heads up. Photo / Sarah Ivey

2degrees plans to invest $100 million in its network over the next two years, extending its reach to more parts of New Zealand.

The announcement follows a deal between 2degrees and international telecommunications giant Huawei, which will provide technology for the build.

2degrees began in 2009 and provides mobile phone services on its own network, competing with Vodafone and Telecom.

The $100 million of new capital brings the total amount of 2degrees investment to $400 million.

This round of capital will come from existing 2degrees shareholders and be partly funded by debt.

The telco also announced plans to open 30 new retail stores this year. 2degrees chief executive Eric Hertz would not specify on where the network would expand as he did not want to give his competitors the heads up.

The upgrade will extend 2degrees own network, which presently relies on Vodafone's infrastructure to provide national coverage to its customers where its cell towers do not reach.

This will reduce the cost of mobile broadband for 2degrees customers living outside Auckland, Wellington, Christchurch and Queenstown.

Hertz said the agreement with Huawei followed competitive negotiations, but was influenced by the global tech company's strong performance.

"Huawei technology underpins our current network and has impressed us with the way it performs, so it made sense to continue," he said.

Hertz said the new investment would also ensure it was ready to handle the requirements of 4G [fourth generation] smartphones.

"We're very conscious that we need to build networks that deliver on tomorrow's speed and capacity demands, so being able to upgrade to 4G via a software activation rather than a network rebuild is especially important," Hertz said.

4G offers mobile internet speeds over 10 times faster than offered on third generation networks, but requires the spectrum (radio waves) which analogue television uses. In 2013 when television goes digital, this will be free for the 4G network.