KEY POINTS:
The nation's two telecommunications giants Vodafone and Telecom have announced separate plans for major network upgrades which will see a collective $630 million invested in the sector.
Telecom, whose share price is bobbing near a 15-year low, said it plans to spend $130 million on a new Internet Protocol (IP) network. Meanwhile Vodafone confirmed it would spend $500 million upgrading its 3G network to reach 97 per cent of the country.
Orcon chief executive Scott Bartlett said the announcements were a reflection of increased competition.
"What it says is that the environment's right for investment and I'm just hopeful that it's the consumer that wins in the end because we are still lagging behind the rest of the world."
Telecom's move will upgrade the infrastructure necessary to bring voice, internet and mobile telephony services together. It has selected Alcatel-Lucent to build the network.
The contract runs through to December 2009, by which time Telecom expects to be able to launch "next generation" products on the new network.
Telecom's access network already runs on IP and by extending it across the entire network the company can roll out the world's latest products and services. A spokesperson said the move follows that of global telecommunications leaders who are switching to IP technology.
Chief transformation officer Frank Mount said the investment is a component of Telecom's operational separation. It would complement other work including fibre-to-the-node, the mobile phone network upgrade and the next generation Telecom retail transformation.
Vodafone New Zealand's general manager of corporate affairs, Tom Chignell, said the 3G network extension is under way and will offer true broadband speeds to almost every New Zealander, including Vodafone's rural customers, by April 2010.
Vodafone New Zealand's 3G broadband network currently reaches 63 per cent of the population and this will soon grow to 70 per cent which will include the 19 provincial centres and the main cities, a spokeswoman said.
"To reach the next 27 per cent, which is where our 2G network sits, will be a geographical distance of 70 times greater," she said.
Vodafone is improving the downlink speed to 7.2 megabits per second (Mbps) and in future, peak downlink speeds will range up to 28.8 Mbps and uplink speeds will be up to 11.5 Mbps using High Speed Packet Access (HSPA).
HSPA is a set of technological standards allowing mobile operators to offer download and upload speeds similar to those offered over broadband lines in the home. It is also one mechanism to bring faster broadband speeds to rural New Zealand, said Communications and Information Technology Minister David Cunliffe.
To reach customers in provincial and rural regions, it is more cost-effective to use HSPA in the 900 MHz band than in the 2100 MHz band that has been used previously in urban areas.
Telecom shares closed up 13c yesterday at $3.41, erasing some of the slump of the past week which saw them drop as low as $3.25 and hit their lowest point since March 1993.
BIG SPENDERS
Telecom's IP network - $130 million
Vodafone's 3G network - $500 million
- NZPA
