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Big Call on New Mobile Phone Network

Posted on: Wednesday, 8 March 2006, 15:00 CST

By PULLAR-STRECKER Tom

TELECOM may spend $500 million building a new mobile phone network in New Zealand that would use the UMTS technology used by rival Vodafone -- but don't expect a decision soon.

The Australian newspaper reported yesterday that Telecom chief financial officer Marko Bogoievski was overseeing a review of the group's mobile options.

The investment, raised as a possibility by financial analysts for several weeks, would be one way of ensuring mobile customers could continue to roam across the Tasman, following a Telstra announcement that it would start shutting down its CDMA network in Australia by 2008.

Telecom now relies on that network to connect mobile customers when they are travelling in Australia.

Chief executive Theresa Gattung was quoted as saying yesterday that Telecom had "never said categorically that we would never consider a different technology path".

Telecom has been trouncing Vodafone in the New Zealand mobile market for several months thanks in part to the improved speed and coverage of its CDMA network, following its investment in 3G EV-DO technology.

Its speed advantage is useful to customers who want to surf the Net or check their e-mail on their mobiles. It is likely to be extended in the next few months as it spends tens of millions of dollars upgrading the network to a faster standard, Revision A.

However, Telstra's decision to close its CDMA network is a medium- term headache for Telecom because many business customers in particular want to be able to use their mobiles in Australia as well as New Zealand.

Broker Morgan Stanley speculated last month that Telecom might build a UMTS network in New Zealand as early as next year, at an estimated cost of about $500 million.

Telecom has stressed that it is committed to providing a fix to the roaming problem one way or another, and may have options other than turning to UMTS.

Source: Dominion Post

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