KEY POINTS:
Telecom may soon respond to pressure from its customers to offer international roaming on mobile phones by building a new hybrid cellular network - the first of its kind in the world - worth up to $1.2 billion, according to reports.
The Communications Day reported yesterday that the Telecom board met last week to consider a strategy paper that recommended building a hybrid GSM and EVDO network that would support both main cellphone technologies, the high-speed UMTS and HSDPA services.
Telstra decided to decommission its CDMA network last year which left Telecom the sole provider of the cellular technology in the region, and customers travelling to Australia were left without adequate roaming options.
It was reported that the investment in the new network will be between $700 million to $1.2 billion and once the project starts, the existing CDMA network will be shut down.
IDC analyst Darian Bird said if Telecom invested in a GSM network - which is used by Vodafone - it would be to provide roaming and the scale inherent in a global standard.
"Although Telecom leads in the business space, it's restricted by the fact that it can't offer true roaming yet," he said.
Telecom could also benefit from a lower price on handsets, he said. Vodafone has a cost advantage over Telecom when sourcing handsets, while Telecom mostly has to rely on US telco Sprint.
Telecom would also be concerned about its future in fixed-mobile convergence, and the likelihood that dual-mode voice over internet handsets will operate on a GSM network.
"They have to get in the game anyway and so if they are not on GSM, they are going to have a cost disadvantage again," he said.
But Telecom has had justifiable reasons for not investing in its current network, said Bird.
"In terms of voice, operating on a lower frequency means Telecom's signal goes further, making it ideal for rural New Zealand," he said.
Telecom spokesperson Phil Love said it would not comment on the network build but said it was "looking at technology options, on behalf of our customers to make sure we future-proof them, and we are happy with CDMA and the rollout of Rev A."
