Delay in spectrum auction decision

TOM PULLAR-STRECKER
Last updated 12:01 13/02/2014

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Telecom will have to wait another month to find out whether regulators will let it buy the last block of "digital dividend" radio spectrum for $95 million.

The Commerce Commission had been due to issue a ruling tomorrow, but a spokesman said it had delayed that to March 14 to give the company time to answer further questions.

2degrees and Vector have opposed the purchase on competition grounds while the Electricity Industry Association has claimed granting clearance could compromise up to $4 billion in economic benefits.

Telecom outbid Vodafone for the 10 megahertz spectrum block last month in an attempt to secure a long-term edge in the rural mobile broadband market, agreeing to pay $83m plus GST.

The purchase would leave it with 18-year rights to 40MHz of the prized spectrum, versus Vodafone's 30MHz and 2degrees' 20MHz. Spokesman Andrew Pirie said Telecom recognised the commission had a process to go through and it was relaxed if it took an extra month or two.

The Electricity Network Association told the commission it would prefer the spectrum was left for "essential infrastructure providers", such as electricity companies, which might want to use it for emergency management and to support new "smart" network technologies.

Smart networks would improve the efficiency of electricity transmission, speed up network repairs and reduce power surges and brown-outs. The association estimated the direct and indirect benefits at between $700 million and $4 billion in a 2012 report.

Smart electricity networks were being promoted in "virtually all major economies" and because many of the benefits were "indirect", the electricity industry might need regulatory encouragement to adopt them here, it said.

"Concentrating spectrum rights in the hands of the established telecommunications companies may lead to suboptimal outcomes," chief executive Alan Jenkins told the Commerce Commission, opposing Telecom's clearance request.

2degrees has meanwhile been voted "best mobile operator" by Consumer New Zealand. The consumer group said it was a clear winner with 83 per cent of respondents voting it "good" or "very good", versus Telecom and Skinny's 75 per cent rating and Vodafone's 68 per cent.

Telecom got the best feedback for the speed and reliability of its service but 2degrees won out on customer service.

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- Fairfax Media

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