KEY POINTS:
Mobile phone users face delays for better deals as NZ Communications sets back plans for a third network and Telecom reviews its new 3G network.
The Minister of Communications, David Cunliffe, has called Vodafone and Telecom to account amid concerns the third mobile network would not be up and running at electiontime.
Newcomer NZ Communications is understood to have told Cunliffe the two phone giants were preventing it from having access to their towers and the launch for its third network had been moved from the end of this year to late 2009.
Cunliffe could not be reached for comment.
But a source close to the minister confirmed he was "very concerned" that NZ Communications should be up and running this year.
Meanwhile, with Vodafone ramping up its new WCDMA 3G network, Telecom is reviewing its plans.
The launch of its new network had been expected in November - in time for Christmas handset sales.
But Telecom has revealed that it will be limited to a "soft launch" aimed at overseas visitors and income from "roaming" - customers using their phones overseas.
Forsyth Barr telecommunications analyst Guy Hallwright said Telecom needed to improve its share of mobile revenue, in particular from roaming.
Telecom already has a 3G network that has limited use because of the limited number of handsets in the CDMA technology.
The new network would remove an impediment to roaming revenue from business customers.
The Telecommunications Users Association of New Zealand said the delays were worrying. New Zealand was running out of time to prevent a mobile phone duopoly turning into a Vodafone monopoly.
TUANZ's Ernie Newman said that with Vodafone holding 53 per cent of the mobile market the situation might not appear dire.
But because of Vodafone's head-start in 3G, it was able to earn two-thirds of its revenue from mobile.
Vodafone and Telecom insist they are not trying to prevent new competition by denying access to their locations.
Vodafone says it built transmission towers to meet the Resource Management Act (RMA) and there is no room for NZ Communications unless the company goes through the long process for RMA approval to increase its towers.
But Newman said the RMA claims were "a red herring" from Vodafone.
"NZ Communications should have been up and running a long time ago.
"There is no doubt New Zealanders are playing far too much because of the lack of a third player."
He said Telecom was paying the price of bad technology decisions for mobile. Telecom has to decide whether to stick with its costly plans to try and catch up with Vodafone by using a mixture of 3G and slightly slower technology outside main centres, or spend even more to avoid falling behind.
Telecom has never spelled out timing for its network and insists there are no delays.
Vodafone upping the ante in competing comes down to a use of frequencies.
Both Vodafone and Telecom are using 2100 MHz frequency, which reaches 56 per cent of its customers with a 3G service.
But Vodafone last month revealed that it would be spending $500 million extending its own 3G network using its 900 MHz frequency, which has a wider reach.
Now Telecom has to decide whether it to wants to continue with its plans using slightly slower speeds outside main centres, or expand use of its 850 MHz to match Vodafone.
PHONE WARS
* NZ Communications says Vodafone and Telecom are delaying its plans to enter the mobile market.
* Vodafone has upped the ante by announcing a $500 million expansion plan.
* Telecom is rethinking its plans for a rollout of its new 3G Network.
* If Telecom changes tack it could cause a big increase in its substantial capital expenditure.
