Telstra bluffing on 3G?

A research report by Citigroup analysts says Telstra is bluffing in its plans to build a 3G mobile phone network in New Zealand.

The analysts say it could cost up to $600 million to build the network, and that would not be cash-flow positive for at least five years.

The analysts added that a "best-case scenario" would see TelstraClear gaining a 16 per cent share of the mobile market by 2016, which would translate into a net positive value of just $78 million.