The Telecommunications Users Association chief executive,
Paul Brislen, favours the five-year deferred payment option
for successful bidders for the digital part of New Zealand's
He had earlier pushed for no auction at all.
''We'd rather see a beauty pageant approach - that is, we've
got three network operators and 45MHz of spectrum, so 15MHz
each. That would avoid them spending money on a piece of
paper rather than the network itself.''
The deferred payment option was sensible given it would
probably take several years to get a 700MHz network up and
running with end user devices, he said. The price should be
low enough so network operators did not find themselves
unable to deploy their networks once they had won the
spectrum rights, Mr Brislen said.
Communications and Information Technology Minister Amy Adams
announced on Wednesday the allocation of the 700MHz band of
spectrum would allow the building of fourth generation (4G)
mobile networks using the spectrum freed up by the switchover
to digital television.
The auction would start on October 29 with the start date
confirmed after completion of the bidder registration
The reserve price of each of the nine lots had been set at
$22 million. The Government had spent $157 million clearing
the band to allow the spectrum to be used for 4G mobile
networks, she said.
''In setting the reserve price, we have balanced generating a
fair return on the sale of the spectrum rights with the
significant investment required by mobile network operators
to build the 4G infrastructure.''
The reserve price also took into account the value to New
Zealand of having 4G connectivity widely deployed.
Allowing a staged payment over five years would enable mobile
network operators to invest immediately in building their 4G
networks to increase their service to New Zealanders, Ms
Mr Brislen said Tuanz would watch the auction closely to
ensure the larger players did not make life costly for new
The Government had signalled in an early discussion document
it would be happy to see two players buy 20MHz each should
one player drop out.
''That's unacceptable to us and to the New Zealand customers,
all of whom remember life under the cosy duopoly. We need to
have three network operators in order to make sure we have
decent pricing,'' he said.
Telecom said in a statement it intended to be a bidder in the
forthcoming auction. But the company warned the deployment of
the spectrum into Telecom's 4G LTE network would depend on
handset availability. Indications were that suitable devices
would start becoming available from mid to late next year -
at the earliest.
Mobile phone operator 2degrees questioned the Government's
minimum reserve price of $198 million for the 4G mobile
spectrum, saying it was well above prices being paid for
''The spectrum's been priced at a premium to the $157 million
cost of clearing the band, well ahead of Treasury's $119
million valuation and about double the price we paid recently
for 15MHz of 1800MHz spectrum,'' said newly confirmed
2degrees chief executive Stewart Sherriff in an emailed
statement to BusinessDesk.
Labour Party communications and IT spokeswoman Clare Curran
said the spectrum auction was being rushed.
''The last thing we want to see is this opportunity
squandered and some spectrum left unsold, as happened in