KEY POINTS:
The Government has taken another step towards breaking up the mobile duopoly of Vodafone and Telecom by making cellphone spectrum available to third-party entrants.
Communications Minister David Cunliffe said yesterday it would re-auction some under-used cellular rights in the 800 and 900 megahertz spectrum bands when they expire in 2011 and 2012.
This spectrum is critical for delivering low-cost mobile services to rural areas and establishing a national network.
A Government review has found Telecom and Vodafone were not fully or efficiently using their existing spectrum holdings.
The New Zealand mobile market is a duopoly and the Government wants to get a third or fourth player into the market to try to bring prices down. Mobile cellphone calling prices are understood to be expensive by international standards.
Cunliffe said it would auction 7.5 megahertz of the cellular spectrum in each of the 800 megahertz and 900 megahertz bands to all interested parties, including Telecom and Vodafone.
The Government has provided incentives for Telecom and Vodafone to on-sell their cellular rights to other providers before the auction, said Cunliffe.
Vodafone commercial development general manager Tom Chignell said it had supported the Government in its aims and policies by agreeing to the sale of six megahertz of its 900 spectrum to New Zealand Communications, formerly Econet.
"This means they get access to the spectrum four years before it would otherwise have become available through auction."
Vodafone was confident the sale of the spectrum to New Zealand Communications would satisfy the Government's requirements for a market sale. New Zealand Communications signed a contract last month to build a national network with Chinese telecommunications supplier Huawei following capital investment from international private equity funds, GEMS and Communications Venture Partners.
Telecom head of technology strategy Shane Ohlin said it would still retain the right to renew a portion of the 800 megahertz spectrum, which it currently used, after its management rights expired. Telecom was considering the Government's decision.
A TelstraClear spokesperson said it sounded like a progressive step and it was looking into the detail.
