Telecom bags 700 MHz spectrum

The New Zealand government has announced today that Telecom is the successful bidder in the auction of the final 2×5 MHz lot of 700 MHz radio spectrum.

Simon Moutter, chief executive, Telecom said, “We are very pleased to have been informed that we have successfully secured a fourth lot of 700 MHz spectrum. This fourth lot will provide significant benefits to customers in terms of the potential speed and capacity of Telecom’s 4G mobile network.

“The more of this 700 MHz spectrum a carrier has, the faster the speeds it will be capable of offering and the more data it can carry, so this fourth lot puts Telecom in the best position in the market to deliver a very high-performance 4G mobile network for New Zealand, including in less densely populated areas,” added Moutter.

Telecom bid $83 million for this final lot, in addition to the total of $66 million for three lots in the initial auction round. The purchase of a fourth 2×5 MHz lot is conditional upon approval from the commerce commission.

Moutter added, “We’ve now got a leading data network integrating 3G, 4G, Wi-Fi, ADSL, VDSL and fiber backed up by a nationwide optical transport network that is underpinning anytime, anywhere connectivity for customers. With the addition of this 700 MHz spectrum, we will be in a very strong position to support New Zealand’s data, mobility and digital services future.”

In the first round of the auction, announced on 30 October 2013, Telecom and Vodafone each successfully bid for 2×15 MHz (three lots), while 2Degrees successfully bid for 2×10 MHz (two lots) leaving a single 2×5 MHz lot unsold from the available nine lots.

The auction for this lot has proceeded over recent weeks at $1 million increments for each bidding interval, starting from the $22 million reserve price. The significant price premium over the reserve price reflects the customer benefits that this additional fourth lot will provide to Telecom’s mobile network in future years.

A final assignment process, during which each successful bidder will bid for a location within the spectrum band, is still to be held.

The 700 MHz spectrum band, previously used for analog broadcast services, is expected to allow mobile operators to provide 4G mobile broadband services – already being built in New Zealand’s main cities – much more extensively in New Zealand, including in less densely populated areas.

Telecom launched 4G services, utilising existing spectrum in the 1800 MHz range, in Auckland, Wellington and Christchurch in November 2013 and extended its network in December to several popular holiday destinations.

Leave a Reply

%d bloggers like this: