CallPlus dials into wireless market

By PETER GRIFFIN telecoms writer

Auckland telecommunications company CallPlus claims its purchase of third generation (3G) radio spectrum will put it in the race to offer next generation mobile services along with Vodafone, Telecom and TelstraClear.

CallPlus last week completed a deal to buy a 5MHz block of spectrum from TelstraClear, which was forced to sell it to conform with Government spectrum rules. TelstraClear also sold another 5MHz to Vodafone.

Existing holders of 3G spectrum, such as Vodafone, claim at least 10 MHz of spectrum is needed to run the next-generation networks. But the chief executive of CallPlus, Malcolm Dick, said advances in network efficiency and technology meant it could get a network off the ground with the 5MHz it had bought.

"The new high-bandwidth radio technologies that are being developed at the moment are looking to provide up to 100 times the bits per bandwidth that a 3G network [at present] provides," he said.

"The amount of spectrum we've got is enough to do the whole country if we want, but the reality is we are a small carrier, we don't believe we are ever going to overtake Telecom."

He said CallPlus would target small and medium-sized businesses and residential customers with "fixed" wireless 3G products.

It was not the company's intention to build a base of customers using 3G mobile phones, but the service would cover both voice telephony and data.

Dick would not say how much CallPlus paid for the spectrum, citing a non-disclosure agreement signed with TelstraClear, but he said examples from the industry showed that where spectrum was resold in a market with several well-established players, it often attracted just a fraction of its original purchase price.

Based on the $8.33 million TelstraSaturn paid for a 10MHz section of 3G spectrum in the Government action in January, the 5MHz could have a value of around $4 million.

Dick said the spectrum purchase was a speculative buy, the benefits of which might not be realised for a few years.

CallPlus is also a likely bidder in the Government auction of several blocks of wireless local loop spectrum due later this year.