Aussies joins NZ spectrum race

By PAULA OLIVER and NZPA

Not content with their hold on rugby's Bledisloe Cup, the Australians now want a slice of New Zealand's radio spectrum auction.

Hutchison Telecommunications (NZ), owned by its Australian namesake, placed its first bids in the Government's spectrum auction yesterday.

Up for grabs are chunks of second (2G) and third-generation (3G) spectrum, which provide bidders with the opportunity to roll out a cellular network, in some cases with special features such as video on mobiles.

While progress has been slow so far, the Australian telco livened up bidding in yesterday's afternoon session, after a clear morning round.

Total bids are now $37.7 million, with Hutchison's first four bids for 2G amounting to $728,000. Ihug was the other big player in the afternoon, with total bids of $1.4 million.

Hutchison managing director Barry Roberts-Thomson said that it was exploring the possibility of extending its business to New Zealand.

Hutchison's Australian arm is partly owned by Hong Kong mobile giant Hutchison Whampoa, who is also bidding for 3G licences in Germany.

The Hutchison Australian arm paid $A671 million ($865.13 million) for spectrum licences in Australia this year, several times the amount New Zealand's auction looks likely to attract.

"The New Zealand auction presents an attractive opportunity for Hutchison to expand its planned 1800Mhz data network, creating a transtasman wire-free business serving the data needs of Australian and New Zealand customers," Mr Roberts-Thomson said.

Given the close ties between the two nations, he said, Hutchison was interested in possibly expanding its service to a market of a similar size to Sydney.

The company has not revealed if it intends to bid for 3G spectrum, but it appears to have the necessary cash to be competitive.

Telstra Saturn, Telecom and Vodafone now hold the three available chunks of 3G.

Hutchison has a service known as Orange in Australia, which provides a phone that can be used as a home phone at a discount rate, but it becomes a mobile as soon as it leaves your property.

Ihug director Nick Wood said that his bids were designed to keep the auction running after the morning's clear round.

"It's still chicken-feed money, and we didn't want it to be over yet," he said.

"Hutchison can afford to spend a few bucks even if they don't use what they get, so their bids are probably just speculation at this stage."

Mr Wood said that the Government was probably quite happy to keep the auction ticking along for a while yet, to try to attract global attention to the cheap prices.

He said that if another 3G bidder could be attracted, prices would go up considerably.