Telecom successful bidder for final lot of 700 MHz spectrum for 4G mobile services

The Government has announced today that Telecom is the successful bidder in the
auction of the final 2x5 MHz lot of 700 MHz radio spectrum.

Telecom Chief Executive Simon Moutter said, “We are very pleased to have been informed that we have successfully secured a fourth lot of 700 MHz spectrum. This fourth lot will provide significant benefits to customers in terms of the potential speed and capacity of Telecom’s 4G mobile network.

“The more of this 700MHz spectrum a carrier has, the faster the speeds it will be capable of offering and the more data it can carry, so this fourth lot puts Telecom in the best position in the market to deliver a very high-performance 4G mobile network for New Zealand, including in less densely populated areas.

“This demonstrates Telecom’s absolute commitment to being the leader in mobile and data network capability and provides a strong foundation for Telecom to continue to deliver world class mobile and data services to New Zealanders across the country.”

Telecom bid $83 million for this final lot, in addition to the total of $66 million for three lots in the initial auction round. The purchase of a fourth 2x5 MHz lot is
conditional upon approval from the Commerce Commission.

Mr Moutter added, “We’ve now got a leading data network integrating 3G, 4G, WiFiADSLVDSL and Fibre backed up by a nationwide optical transport network that is underpinning anytime, anywhere connectivity for customers. With the addition of this 700 MHz spectrum, we will be in a very strong position to support New Zealand’s data, mobility and digital services future.”

In the first round of the auction, announced on 30 October 2013, Telecom and Vodafone each successfully bid for 2x15 MHz (three lots), while 2Degrees successfully bid for 2x10 MHz (two lots) leaving a single 2x5 MHz lot unsold from the available nine lots.

The auction for this lot has proceeded over recent weeks at $1 million increments for each bidding interval, starting from the $22 million reserve price. The significant price premium over the reserve price reflects the customer benefits that this additional fourth lot will provide to Telecom’s mobile network in future years. A final assignment process, during which each successful bidder will bid for a location within the spectrum band, is still to be held.