KEY POINTS:
If Telecom didn't have enough on its plate fighting the Government's regulatory plan to split the company into three business units, it is also set to spend hundreds of millions of dollars building a new mobile phone network.
The deal being handed to Alcatel-Lucent represents a serious piece of capital expenditure for Telecom but is designed to correct an ill-conceived technology choice made when building the 027 network in the late 1990s.
Several reasons underpinned Telecom's decision to base its mobile network on CDMA technology not least being that it was Telecom's powerful American shareholders at the time demanded.
With the European-centric rival standard, GSM, dominating, Telecom and mobile operators in Asia and the United States took a punt on an alternative that many saw, and still see, as being technically superior.
Telecom has used its 027 network to claw back some mobile business from rival Vodafone and the two companies now divide the market roughly between them.
But the sheer weight of numbers in the GSM world has seen Telecom's mobile options narrow to the extent that when Telstra last year said it would shut down its CDMA network, the prospect of Telecom customers soon being unable to use their phones across the Tasman became a reality.
Telecom's move to the more mainstream technology is designed to avoid being completely left behind in the mobile technology race. As the mobile phone becomes a more important part of the inter-connected world we live in, being able to offer the full range of services the mobile has come to support is essential for a telecoms company.
The bulk of development of mobile phone services is happening in the GSM world and Telecom could not afford to cut itself off from these opportunities any longer.
Maybe Telecom will now be able to leverage something from its shareholding in Australian mobile operator Hutchison 3G and improve the range of handsets and services it delivers to 027 customers.
