TelstraClear may build own network

Talks between Telecom and TelstraClear about sharing a third-generation mobile phone network have broken down, pushing TelstraClear towards building its own infrastructure, a source says.

"The talks do seem to have come to a halt, so it could be possible that they are going down this path," the source said yesterday.

An Australian report said yesterday parent Telstra was planning to spend $150 million on a 3G network in Auckland, with Ericsson acting as the supplier.

TelstraClear and Ericsson denied anything had been finalised or a contract had been signed, but Ericsson did indicate an offer had been tendered. "We're still waiting to hear from TelstraClear," internal communications manager Sarah Obst said. "As far as we're concerned, we haven't signed a contract."

Telecom did confirm it has been in talks with TelstraClear about sharing a network on a wholesale level. "We think that would be sensible in a country the size of New Zealand," a Telecom spokesperson said.

TelstraClear is also reportedly in talks about sharing with Vodafone, which is expected to launch its own 3G network this year, but neither company would confirm or deny that. "We don't comment on commercial negotiations, be they happening or figments of imagination," a Vodafone spokeswoman said.

TelstraClear spokesman Mathew Bolland would only say that "mobility is something we've got to get into but we're not going to talk about how or when".

Observers said the breakdown in talks between Telecom and TelstraClear could be rooted in a difference of preference over standards. TelstraClear favours the W-CDMA (wideband code division multiplex) standard, which is popular in Europe, while Telecom prefers the CDMA2000 standard used in the United States and parts of Asia.

Telecom corporate affairs chief Philip King told the Australian media that the company did not "see a need to move to W-CDMA at this time".

Analysts said a TelstraClear network in New Zealand would likely be an extension of the one in Australia.

"It wouldn't be surprising if they do go down the wideband route they'll choose Ericsson, because, of course, it's the same network as here," said Richard Long, telecommunications analyst for Deutsche Bank in Sydney.