Telecom loses out to rival operator

By PETER GRIFFIN

Telecom has lost key business to a smaller rival as mobile operator Vodafone prepares to shift to TelstraSaturn's network for voice and data traffic between the main centres.

Vodafone's general manager of engineering, Jenny Mundi, said the migration to TelstraSaturn's network linking Auckland, Wellington and Christchurch would begin in February.

Vodafone has its own mobile network consisting of hundreds of cell towers, but Telecom's network is used to link cell towers and switching sites.

Ms Mundi said TelstraSaturn would then carry "a reasonable amount" of traffic between the main centres for Vodafone. No reason was given for making the switch.

"We're always looking at the evolution of infrastructure and technology. Future proofing and migration is paramount," she said, adding that Vodafone was never happy to "remain with the status quo".

But Telecom would continue to be an important business partner for Vodafone. "We're never solely reliant on one network," she said.

Vodafone was also undertaking the next phase of preparing its network for 3G (third generation) mobile services services, which will eventually include music and video to the cellphone and high-speed internet access.

The second-ranked mobile operator is paying Nortel $6.8 million to provide equipment for an ATM (asynchronous transfer mode) network which will allow voice and data services to be carried over the same network cheaper and using less capacity.

Nortel estimates the new network architecture will allow Vodafone to operate its network up to 60 per cent more efficiently and cut operating costs by up to 40 per cent.

But that would not necessarily translate into lower prices for mobile users and it would take two to four years to recoup its investment.