KEY POINTS:
Telecom's mobile-network plans are expected to open the way to greater consumer competition.
Telecom last week confirmed plans to spend $300 million building a new mobile network. It will use GSM technology - similar to that used by competitor Vodafone - to handle mobile calling, video and high-speed broadband.
Telecommunications analyst Tim Shepheard of IDC said the new 3G network could open a "window of opportunity" for NZ Communications, formerly Econet, to play the two potential roaming partners off against each other.
The Commerce Commission is currently reviewing the mobile sector, including a commercial undertaking by Vodafone to let competitors use its network to establish national coverage - important for any new entrant to the high-cost mobile market.
NZ Communications has also been negotiating with Vodafone and Telecom on co-location - putting its transmission equipment into competitors' cellular towers.
The company recently announced a cash injection from two private equity players and has plans to offer cellphone services within two years in Auckland, Wellington and Christchurch.
"Telecom will no doubt be distracted by the deployment of a new network and operational separation, which NZ Communications may try to exploit," said Shepheard.
Telecom's new network could also be good news for consumers, he added.
"New Zealand will finally have competition on a network scale, which will reduce barriers to switching operators."
Moving between Telecom would no longer mean buying a new phone or 3G modem, he said. "Telecom will potentially have the ability to offer additional services run over a WCDMA network, including mobile television and conference calling - services currently provided by Vodafone."
Telecommunications Users Association chairman Merv Altments said the upgraded network could create competition among business customers in combination with number portability, which let customers to keep their mobile number.
"So if you combine it [new network] with number portability you're starting to look at much more ability to transfer between networks and therefore create competition," he said. "Having said that, it comes down to whether the two networks want to compete."
