NZ Telecom, Vodafone pick up rights to 700 MHz 4G spectrum

WELLINGTON Tue Oct 29, 2013 6:26pm EDT

The headquarters of Vodafone Germany are pictured in Duesseldorf September 12, 2013. REUTERS/Ina Fassbender

The headquarters of Vodafone Germany are pictured in Duesseldorf September 12, 2013.

Credit: Reuters/Ina Fassbender

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WELLINGTON (Reuters) - Telecom New Zealand and Vodafone have picked up the majority of management rights to the country's 700 megahertz spectrum as competition heats up to bring high-speed 4G broadband services to users in rural areas.

Telecom, the country's largest telecom company, and Vodafone successfully bid on the maximum three lots of 2x15 megahertz lots for NZ$66 million ($54.55 million) each, while mobile phone operator 2degrees secured two lots of 2x10 MHz bandwidth.

"Overall, this is a successful outcome for the auction that bodes well for the future of competitive fourth generation mobile services in New Zealand," Communications and Information Technology Minister Amy Adams said in a statement.

One 2X5 MHz lot went unsold in the auction. Adams said the remaining lot could be re-auctioned in a supplementary allocation round while also raising the possibility that the government could retain the unsold lot and allocate it at a later date.

Vodafone controls around 42 percent of the retail mobile market, while Telecom has a 37 percent share, followed by 2degrees with 20 percent. Both the UK-owned company and Telecom already offer 4G services in some cities, including Auckland and Wellington.

"These rights will underpin our plans to bring 4G network speed and performance to more New Zealanders," Telecom Chief Executive Simon Moutter said.

The spectrum band was freed up after analogue broadcast services in the country were terminated earlier this year, and will allow mobile operators to extend 4G mobile broadband outside the country's main cities.

Vodafone and Telecom have been engaged in a price war for mobile and fixed-line broadband customers as Telecom aims to increase its market share of the mobile market to make up for an ongoing fall in fixed-line customers.

($1 = 1.2099 New Zealand dollars)

(Reporting by Naomi Tajitsu; Editing by Leslie Gevirtz)

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