New Zealand to re-auction spectrum for mobile services

12 Apr 2007

(New Zealand Press Association via NewsEdge) The New Zealand government is to re-auction some under-used cellular phone spectrum rights held by New Zealand Teelcom and Vodafone.

New Zealand communications minister David Cunliffe said the government will re-auction the 7.5 MHz of spectrum in the 800 and 900 MHz bands in 2011 and 2012.

The spectrum held by the big players will not be offered for renewal to New Zealand Telecom and Vodafone.

The New Zealand cellular market is a duopoly and the government is keen to get a third or fourth player into the market to try and bring prices down, industry observers said. The spectrum will be freed up to the open market and reallocated by way of an auction which will be open to all interested parties, including New Zealand Telecom and Vodafone.

"This decision has been made after a case-by-case review of spectrum holdings in the 800 and 900 spectrum bands,'' Cunliffe said.

Analysis showed New Zealand Telecom and Vodafone were not fully or efficiently using their existing holdings, he said.

Cunliffe said potential market entrants had shown significant interest in gaining access to the 800 and 900 MHz bands, as these bands were considered to be more economic for providing coverage to lower population density areas.

Reallocating some spectrum by auction would test market interest in these bands and improve the potential for new entrants.

Cunliffe said it was possible New Zealand Telecom and Vodafone would want to sell their cellular rights through secondary market transactions, so an incentive had been provided for existing holders to arrange an early secondary market transaction, rather than face a later auction.

© 2007 New Zealand Press Association

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