Vodafone rejects mediation bid

Vodafone yesterday rejected 12th-hour offers from independent mediators to settle the row over interference from the new Telecom 3G mobile network.

So the phone giants will be facing off in the High Court tomorrow as Vodafone attempts to prevent the launch of the XT Network on May 13.

Ralph Chivers, the chief executive of the Telecommunications Carriers Forum - which covers the two parties as well as TelstraClear - said he offered because he has expertise in mobile phone network designs.

The Telecommunications Users Association of New Zealand (TUANZ) was aware of other offers for an independent mediated settlement.

Telecom spokesman Mark Watts said that Telecom had not solicited the offers but had welcomed them.

"Obviously it has to be something that both parties agree to," he said.

But Vodafone spokesman Paul Brislen said it was too late to keep the matter out of court with mediation.

"It has got beyond that," he said.

In Vodafone's claim to the High Court yesterday it said there had been a 147 per cent increase in formal complaints and a 154 per cent increase in customers cancelling since Telecom started transmitting on its new network.

Vodafone said Telecom had failed to take measures to prevent spurious emissions by installing filters on transmitters.

Vodafone sought an injunction to prevent transmissions "until Telecom could demonstrate it no longer caused harmful interference".

The stakes are high for both companies with Telecom in the middle of a marketing campaign for launch day next week. Telecom is understood to have surprised Vodafone by launching four weeks ahead of schedule.

The XT Network is seen as a chance for Telecom to recover ground it has lost against Vodafone in the mobile market because its inferior CDMA technology does not allow it to earn money from data downloads.

Vodafone picks up 69 per cent of mobile phone revenue compared to 31 per cent for Telecom. When Vodafone announced its plans to challenge the new network, Telecom CEO Paul Reynolds said the legal claims announced last week were "signs of desperation". "This is a piece of aggressive behaviour that betrays Vodafone's insecurities about competition," he said.

Tomorrow's hearing will decide if the heavily marketed launch goes ahead as planned or whether Telecom is sent back to the drawing board to resolve alleged interference problems.

The statement of claim said Vodafone began to observe harmful interference from Telecom's 850 MHz network on its 900 MHz network in January when it was being tested.

"It is clear that Telecom has been aware of interference and had been negligent in designing, configuration and operating the network," the Vodafone claim said.

Meanwhile, a company that is planning a third 3G network, New Zealand Communications, has said that it had signed an agreement for Telecom to resolve issues on its network as a result of interference. Spokeswoman Bryony Hilless said that interference concerns might be different to those in the claim by Vodafone.

GIANTS AT WAR

* Telecom plans to launch its XT 3G mobile network onMay 13.
* XT transmits at 850 MHz while Vodafone 3G network is on 900 MHz.
* Vodafone claims even before launch, tests have caused big increases in complaints about interference.
* Vodafone claims Telecom had been negligent designing its network.
* It wants the XT mobile signal to be prohibited - slowing the launch of the new network.