Vodafone confirms Nokia to build 3G network

By PETER GRIFFIN IT editor

The selection of Nokia to build Vodafone's third generation mobile network may have global implications as the deal, struck through an auction process, becomes the benchmark for future Vodafone 3G deals around the world.

Vodafone yesterday confirmed Finland-based Nokia as its vendor of choice for its New Zealand and Australian 3G projects.

Documents obtained by the Herald two weeks ago showed the deal price to be around $400 million for the New Zealand network.

Vodafone plans to have 78 per cent of the population covered with 3G service by March 2009, according to its 3G "Build and Launch Business Plan Draft".

The 3G network is expected to be up and running in the middle of next year and will offer higher mobile data speeds and new services such as phone-to-phone videoconferencing.

Vodafone's technology director, Jeni Mundy, would not confirm the size of the deal because the figure was "sensitive and confidential".

But Nokia had come up with the cheapest deal through the reverse auction process run by Vodafone where the bids were whittled down each day. "All four of the vendors are global partners of Vodafone but Nokia did prove to be most competitive pricewise," said Mundy.

An industry source, who did not want to be named, said other vendors were mindful of the auction's wider significance to future 3G bids and were reluctant to contribute to setting a low benchmark.

Mundy confirmed that the final pricing for the New Zealand and Australian networks would be used in setting the standard for future purchases.

Vodafone's 3G network will be the first of its kind in the country. TelstraClear also has 3G aspirations but they are on the back burner as the company awaits regulatory decisions.

Its contract to resell Vodafone's mobile service ends this year. Mundy would not confirm that the arrangement would continue, saying only that the companies were still talking.

TelstraClear spokesman Mathew Bolland said the company expected its contract with Vodafone to simply roll over.