NZ 'must wait' for fruits of 3G

By PAULA OLIVER

It is likely to be at least two years before New Zealand sees any of the sparkling new features that third-generation (3G) spectrum is expected to bring, says a local technology commentator.

Three blocks of lucrative 3G spectrum are under the Government's online auction hammer. Incumbent telcos Telstra Saturn, Telecom and Vodafone are battling media group INL for a slice of the action.

While bidding for 3G hotted up last week, it sits well below the billions of dollars the spectrum fetched in similar auctions worldwide.

Considered lucrative because of its potential to provide services such as video images on to handsets that only slightly resemble mobile phones, 3G is seen as the future of the wireless communication industry.

But technology commentator and cable television pioneer Bob Cooper says that regardless of when the auction ends, it is likely to be some time before New Zealanders feel the effect of changing technology.

"I would say two years at least and probably even four," he said. "Companies still need infrastructure to be able to use the spectrum effectively and many do not yet have it."

Mr Cooper said Europe, Britain, and possibly Scandinavia would be first to see the technology as companies scrambled to take advantage of big populations and newly available bandwidth.

"The technology to use 3G exists in prototype form, but countries much larger than New Zealand will have to do it first so that suppliers like Nokia make the sets in anywhere near the volume needed for us to get any.

"But a lot more is needed than just 3G frequency."

Mr Cooper said 3G was commercially viable only if it was interconnected to services with a fibre-optic cable network like the one Telstra Saturn is building.

Telstra's approach of digging up the ground and laying its own bandwidth put it ahead of other 3G bidders, he said.

"They are laying cable in CBDs where there is a real lack of available bandwidth at the moment, and by the time they are finished they will be able to transmit within one small area half the size of a building.

"I would be very shocked if they do not end up with some of the 3G spectrum, because they will have the jump on all the others."

Mr Cooper said Telstra's move was a serious threat to the way Sky Television operated.

"That is probably why INL, who hold half of Sky Television, had entered the race.

"It is a means of assuring they have a way to compete with Telstra and Telecom in the future, and they will not want to be left behind." Telecommunications analyst Paul Budde last week expressed concern that heavyweight INL could use its link with Sky to become dominant.

But Mr Cooper disagreed, saying that it had no established way of using the spectrum to its full advantage.

Similarly, Telecom and Vodafone did not have the necessary facilities, leaving Telstra in the box seat.

Mr Cooper said New Zealand was likely to see several new television channels, like those on BSkyB in Britain.

"It is not going to be about getting entertainment to your home or hotel, but to you when you are on foot, anytime, anywhere."