New cellular network given access to the airwaves

Communications and Information Technology Minister David Cunliffe today announced that Telecom and Vodafone have accepted offers for the renewal of cellular spectrum. 

A condition of the offers in the 800 MHz and 900 MHz bands provided for some of the spectrum to be made available to a new entrant to the mobile market.

This included an incentive for Telecom and Vodafone to make an early sale of spectrum to a third player. Both companies have now completed the sale of spectrum to the new entrant, NZ Communications.

“This is good news for New Zealanders. Not only does acceptance of the offers mean that New Zealanders will have cellular services for years to come but the sale of spectrum to a third company will help to launch a third network player in New Zealand.

“A new mobile player will give consumers more choice and provide more competition in the market. It also gives cellular operators greater certainty to invest in new infrastructure and bring the latest mobile technology to the market,” said Mr Cunliffe.

The 800 and 900 MHz bands are valued for their better quality and longer reach which keeps deployment costs down, particularly for coverage outside metropolitan areas.

The bands’ longer range is also attractive to a new entrant because fewer cell sites need to be built and services can be more cost effective.

The bands are likely to carry cellular services for the foreseeable future and will accommodate 4G services in the future.

Background
Telecom and Vodafone have accepted offers from the Ministry of Economic Development for the renewal of cellular radio spectrum rights in the 800 MHz and 900 MHz bands for a 20-year period from 2011/12.

A case-by-case review of the 800 MHz and 900 MHz bands identified that Telecom and Vodafone had sufficient spectrum and were not fully or efficiently utilising their allocations.

A condition of the offers was a sale of part of each holder’s spectrum to new entrants. The value of the offers was a total of $106 million.

Full details of the offers are available on the Ministry of Economic Development’s website, http://www.med.govt.nz/radio/cellular-rights.