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I had a big catch-up with various people from Vodafone yesterday out of which a few things became obvious. Most notably, Vodafone expects to be working with New Zealand Communications next year as the latter launches its own mobile service and uses Vodafone for roaming and possibly cell-site co-location.
Tom Chignell, Vodafone's general manager of commercial development said he would "put money" on New Zealand Communications (formerly Econet) launching next year.
"They've been doing due diligence on our sites for the last few weeks," said Chignell.
"We've got high hopes they'll be sharing a number of our poles. They're very well advanced.
They've got switch rooms, even some sites."
For anyone unaware of the Econet back story, this article will fill you in. Basically the company has been trying for years to crack into the mobile market here, but only this year sealed the investment needed to get the ball rolling. It's still fighting for the regulatory concessions it claims it needs to make a third mobile network viable.
Significantly, New Zealand Communications has access to a chunk of 3G radio spectrum through its relationship with the Hautaki Trust and owns some 2G spectrum as well. Government regulations allow for a new mobile player to roam on the networks of competitors if they first build a network covering at least ten per cent of the population and present a plan that would move them towards national coverage in five years.
New Zealand Communications is a GSM player so will be dependant on Vodafone to extend national coverage to its customers. As a NZC customer therefore you may be on the NZC network in central Auckland but roam on Vodafone in Waikato or the Far North. The process should be seamless for the customer - the mobile call is sent by Vodafone to NZC's network or vice versa without the user knowing the difference. It's a little less efficient than sending a call from one Vodafone cellsite to another Vodafone site as the call has to go across NZC's central network as well, but callers shouldn't notice any difference - this sort of thing is already done all over the world.
Behind the scenes it is of course more complicated and the details are still being ironed out. So what will NZC's unique selling point be? After all, Vodafone and Telecom have competed pretty strongly this year on price and TelstraClear has begun a mobile resale deal with Telecom after ditching Vodafone as a partner and scrapping its own plans for a mobile network earlier in the year. Needing to pay roaming charges to offer national coverage and facing two major rivals in Vodafone and Telecom's it's hard to know how this fledgling player is going to make a go of it, especially with the two existing network operators and TelstraClear able to bundle mobile and fixed-line phone and broadband deals.
What's left for NZC? Well, it has partnered with Chinese equipment and handset maker Huawei, so it may be able to squeeze a competitive deal out of them on hardware. Huawei competes aggressively on price with its European rivals and has some pretty sophisticated mobile platforms - I visited its HQ in Shenzhen earlier in the year and was blown away at the capability it has in fixed-line and mobile networks.
Still, NZC has a tough job ahead of it. The only way I see it working is if the company can procure some very cheap handsets and then offer flat-rate, all-you-can-eat mobile calling and texting deals that beat what's on offer from its two rivals.
We've long complained about the "cosy duopoly" existing in the mobile market here and the traditionally high mobile rates we pay. Next year looks set to test whether a third entrant can actually be a viable contender in the mobile market here.
