Telecom and Vodafone yesterday signalled their market intentions as the competition intensifies in New Zealand's telecommunications industry.
Three companies would begin offering 3G mobile services to their customers in July with the launch of Telecom Wholesale's mobile network operator services.
Vodafone said it had formed an alliance with Canadian fibre grid operator Axia to bid for the Government's planned $1.5 billion ultra-fast broadband project (UFB).
Telecom said its announcement was part of the company's moves to provide New Zealanders with a greater choice in mobile service provider.
Digital Island, Telcoinabox and Zintel Cogent were the three companies able to use the WCDMA (wideband code division multiple access) network, Telecom Wholesale marketing general manager Nick Clarke said.
It would be the first time anyone outside of Telecom could offer their customers 3G mobile services through Telecom's WCDMA network.
The launch of the new mobile service offered the three companies the opportunity to source a full range of the most advanced telecommunications services available in the New Zealand market, he said.
The companies would be able to build closer relationships with existing customers and attract new customers by offering them a full suite of services - including mobile, broadband, data and calling.
"The Telecom Wholesale offering has been designed to promote genuine competition in the market by offering simple, competitive pricing that can be tailored to different segments while also providing the flexibility for service providers to differentiate products from their competitors," Mr Clark said.
The retail service providers were able to customise and differentiate from their competitors by marketing mobile services under their own brand and providing their own service support.
Vodafone chief executive Russell Stanners said the alliance with Axia would enable it to take part in the UFB project as a retail provider and help invest in the future of New Zealand.
"Mobile companies are one of the biggest users of fibre in the world. We need it to connect our cell sites together.
"But for Vodafone, it doesn't stop there. We want to help New Zealand build on the promise of ultra-fast broadband.
"We will, with Axia, and hopefully the Government, deliver to New Zealanders the infrastructure to take us to the next economic level."
Asia had built similar next-generation networks in Canada, France and Singapore, he said.
Of all countries, New Zealand had the most to benefit from the building a next-generation network.
"We are remote from our markets, we have a small population but we think smarter - we work harder to develop our intellectual property."
If a network was built to allow New Zealanders to interact with their customers overseas, all New Zealand would benefit from the economic gain it would bring, Mr Stanners said.
Axia chairman and chief executive Art Price said the challenge required proper consideration of public policy, pricing of services, technology and creating the right regulation and competitive tension.
The New Zealand Government had set a policy framework that could achieve the desired outcomes.
• Brokers Forsyth Barr and Craigs Investment Partners have both retained a hold on Telecom shares after the company gave the market certainty about its dividend policy.
Craigs broker Chris Timms said the 90% payout equated to 16c per share.
For New Zealand holders, the cut from 24c per share in 2010 to 16c in 2011 was largely mitigated by the resumption of imputation credits.
Craigs has a target price of $2.10 a share on Telecom while Forsyth Barr has a valuation of $2.73.
The shares were trading at $2.13 yesterday.
Forsyth Barr broker Suzanne Kinnaird said Telecom's 2011 profit would be affected by changes to the telecommunications services obligations regime and rural broadband levy, price pressures and lower Southern Cross dividends.
Substantial cost reductions would be needed to maintain broadly flat operating earnings.
"Telecom's share price is below our valuation and we believe it is close to its low point but we expect news flow to remain negative for the next few months," Ms Kinnaird said.
