Government improves mobile infrastructure

Communications and Information Technology Minister Steven Joyce today announced the completion of two cellular spectrum transfers that will improve infrastructure for all mobile network operators and promote more competition in the New Zealand mobile market.

Vodafone and the Crown have completed a settlement process for Vodafone to renew rights to spectrum it uses to provide cellular services.  In addition, the Crown has swapped some spectrum with the anticipated new entrant to the mobile market, NZ Communications.

Mr Joyce says these spectrum transfers help lay the foundations for better mobile network infrastructure.

"Network operators can now make long-term investment decisions, which will bring us better services and technology such as mobile broadband, and intensify competition - ultimately lowering costs for consumers."

The swap in January of two 4-MHz portions of spectrum between NZ Communications and the Crown came about following discussions involving all the mobile network operators. The Government can now amalgamate some spectrum it manages, which means more will become available for non-cellular uses.

"The swap gives NZ Communications the bandwidth it needs to invest in both second generation and third generation networks, and the government has the opportunity to free up its spectrum for other uses," says Mr Joyce.

As part of the swap, Telecom and NZ Communications agreed to jointly manage their adjacent spectrum holdings so as to prevent any potential radio interference issues.  This leaves the government out of matters which are more efficiently dealt with by the private sector.  

Cellular Spectrum Transfers: Background

Vodafone spectrum management rights renewal
Vodafone's renewal of its management rights in the 900 MHz band is the culmination of a process that began in 2007 with offers to both Vodafone and Telecom offering spectrum renewals at a pre-determined price. Vodafone has paid approximately $57 million (excluding GST) to have its rights renewed from 2011 to 2031. The offers included an inbuilt incentive for Vodafone and Telecom to sell part of their spectrum to a new entrant to the market. Both companies sold spectrum to NZ Communications in 2008 in order to secure their long-term access to spectrum.

Crown-NZ Communications spectrum swap
Following NZ Communications' acquisition of spectrum from Vodafone and Telecom, the government reviewed the way cellular spectrum was allocated. The outcome of discussions with mobile network operators was the swap of 4 MHz of Crown-managed spectrum (935-939 MHz) for 4 MHz of NZ Communications' spectrum (841-845 MHz). This gave NZ Communications greater capacity to build competitive second and third generation cellular services, and the government an opportunity to put spectrum in the 800 MHz band to better use.