13-month 4G headstart
New Zealand could get a 13-month headstart on Australia in building large-scale 4G mobile networks using spectrum freed up by the closure of analogue television transmissions.
The benefits of the switch to 4G technology are expected to include faster mobile broadband and smartphone plans with more generous data caps.
The so-called ''digital dividend'' spectrum, in the 700MHz band, will be freed up in New Zealand in November this year and in Australia a month later, when analogue TV transmissions in both countries are shut down.
However, Australian communications minister Stephen Conroy said the spectrum would not be available to new users in Australia until 2015, once broadcasters had finished switching digital television transmissions to new radio frequencies.
Len Starling, radio spectrum manager at New Zealand's Economic Development Ministry, said that the equivalent ''re-stacking'' work would be completed in New Zealand by November next year, meaning the 700MHz spectrum would then be immediately ready for 4G use. That work this week necessitated the re-tuning of Freeview set-top boxes in Wellington.
Conroy said the Australian government would delay the auction of its ''digital dividend'' radio spectrum by five months until April next year on the advice of the Australian Communications Media Authority, saying that would still leave plenty of time for new users to plan how they would use the spectrum.
But a spokesman for New Zealand Communications Minister Amy Adams said the New Zealand government remained on schedule to sell off rights to its 700MHz spectrum by the end of the year.
The bulk, if not all, of the spectrum is widely expected to be divided, though not necessarily equally, between Vodafone, Telecom and 2degrees.
Telstra has already begun offering some 4G services in Australia using higher-frequency radio spectrum and Telecom has signalled it will follow suit in New Zealand later this year, but Telecommunications Users Association chief executive Paul Brislen said 4G networks that used the digital dividend spectrum would provide ''better bang for the buck''.
If New Zealand did get a 13-month headstart over Australia building 4G networks using 700MHz spectrum, it could be a competitive advantage, particularly for ''the engine room'' of the rural economy, he said.
The sale of the digital dividend spectrum rights is expected to boost the New Zealand government's coffers by anywhere between $100 million and $1b, depending largely on whether it pushes telcos for the highest price, whether it imposes conditions on the spectrum's use, and on negotiations with Maori over any concessions they may receive following a Waitangi Tribunal claim.
Sales of digital dividend spectrum overseas suggest the ''going rate'' for New Zealand's digital dividend spectrum is between $500m and $1b. There is speculation in Australia that its spectrum could fetch about A$4b (NZ$5.1b)
However, Australian telco analyst Paul Budde says New Zealand has previously sold its spectrum to telecommunications companies cheaply, with few conditions.
2degrees has called on the Government not to try to maximise the proceeds from the digital dividend spectrum in a competitive auction, saying it is still in start-up mode and is not as deep-pocketed as its rivals, Vodafone and Telecom.
Federated Farmers spokesman Anders Crofoot told BusinessDay that the lobby group had asked the Government to impose conditions on 4G spectrum licences that would ensure winning bidders invested quickly in rural infrastructure.
Adams has hinted the Government might consider either that or other measures to encourage more investment in rural cellphone networks.
The Government has not so far considered mandating bidders switch to a new technology standard ratified by the International Telecommunications Union that would ensure improvements in the audio quality of mobile phone calls.
- © Fairfax NZ News