KEY POINTS:
Of all the players involved in the multinational bid to bring a third operator to the mobile phone market, the Chinese are the most effusive about its chances of success.
African mobile operator Econet Wireless has been lobbying for six years for the regulatory concessions it needs to make the economics of going up against Vodafone and Telecom in the mature mobile market work in its favour.
Armed with 3G spectrum given by the Government to its Maori partner, the Hautaki Trust, and with a reported $100 million in conditional funding from Hong Kong and British investors at its disposal, Econet's proposed mobile play is entering its make-or-break stage.
Chinese telecoms equipment maker Huawei built a ten cell site trial network in Auckland for Econet and is waiting for the green light to expand the network in main centres - a deal that could net it millions of dollars.
Huawei's vice-president of global sales accounts, Rio Zhang, said New Zealand would be an important market for Huawei this year, despite the low contribution it can realistically make to the US$11 billion ($16 billion) company's global business.
"Even though you have high [mobile] penetration, the prices are much higher than in other countries. The market should be opened up," said Zhang, who struck the deal with Econet during a two-year stint heading Huawei's Australasian operations.
She said a reliable funding partner and regulatory provisions that would allow Econet customers to use Vodafone's network cost effectively to achieve national coverage were crucial to the network going ahead.
Phone number portability is to become available from next month and would allow Vodafone and Telecom mobile subscribers to shift to Econet and take their number with them.
More important for Econet is regulatory pressure allowing better fixed-line to mobile call termination pricing and an affordable deal for using Vodafone's network.
The Government has deferred making a decision as Vodafone and Telecom table proposals to deal with the issues through commercial contracts rather than Government mandates.
That has sparked outrage from companies which share Econet's desire to enter the mobile market.
Prices will eventually come down, the question is by how much.
Econet's plan was always to take on Telecom and Vodafone with low-cost handsets and calling plans. But the mobile industry has moved on since Econet first formulated its strategy for New Zealand.
Revenue growth in voice services has slowed, forcing operators to look to 3G data services to increase the monthly spending of customers.
At a showcase of Huawei technologies in Hong Kong, the Herald was shown mobile TV, location-base services, music downloads and video telephony that are supplied to PCCW, the incumbent operator there.
Huawei's mobile platform would allow such services to be delivered in New Zealand.
Econet's acting chief executive, Tex Edwards, refused to comment on the outcome of the Auckland Huawei cell site trial.
Edwards, a shareholder in Econet's New Zealand venture, is understood to have been asked to step aside to make way for a new chief executive with operational experience.
Zhang said Investment New Zealand officials recently visited Shenzhen to discuss the prospect of Huawei expanding its operations in New Zealand to support Econet.
No tax breaks, grants or other incentives have been offered to secure investment from Huawei, but Zhang said free trade negotiations between New Zealand and China had created an appetite for discussing potential partnerships.
"It has encouraged the [New Zealand] Government to learn more about Chinese hi-tech companies," she said.
The main prize for Huawei would be a contract for a national mobile phone network (it was passed over in favour of Swedish equipment maker Ericsson to build Telstra's high-speed mobile network in Australia) for it is also a major supplier of technology that delivers services over copper-line networks like Telecom's.
As internet providers explore the options for using local loop unbundling provisions to put their own equipment in Telecom's exchanges and take control of the telco's copper, Zhang sees a major sales opportunity for Huawei.
"It's an area that has potential. The whole network belongs to Telecom and the broadband network isn't good enough."
* Peter Griffin visited China as a guest of Huawei.
