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Ihug Seeks Court Injunction Over Radio Sale


Sunday June 25

Ihug Seeks Court Injunction Over Radio Sale

The Internet Group, Ihug is launching a legal challenge against next month's government sale of valuable radio frequencies.

Ihug will today (Monday) seek a High Court injunction aimed at forcing a judicial review of the planned auction of two-gigahertz (2GHz) mobile spectrum from July 10.

Second and third-generation cellular spectrum is to be auctioned, including one parcel set aside for Maori. The spectrum opens the door to more network operators, as well as high-speed transmission of data and Internet access over mobile networks.

But Ihug believes the Government's current mobile spectrum strategy is seriously flawed, because it will probably prevent new players from entering the market now.

The company has warned that New Zealand consumers could miss out on big savings on mobile charges and telephone line rentals, simply because of a continued lack of competition.

Ihug Director Nick Wood says the government has ignored industry calls for a cap (acquisition restriction) on new licences in the second-generation spectrum.

"The government has already agreed to a cap of 15 MHz for third-generation spectrum in the auction," he says. "But third-generation technology is still under development, and may not be ready for at least another three years."

"Without a similar cap for second-generation spectrum, new and innovative local bidders like Ihug are likely to be shut out. Real competition would be delayed for at least another 2 - 3 years allowing major players like Telecom and Vodafone to continue to dominate."

Mr Wood says mobile phone users in this country should be enjoying the same low charges available in overseas markets where competition is stronger. He says in areas where strong competition does exist, such as tolls and Internet, New Zealanders enjoy significant savings. The same should also be happening with mobile calls.

Ihug is New Zealand's second largest Internet Service Provider with 120,000 customers.

The company will today file an application seeking a High Court injunction, aimed at securing an effective competition rule (cap) for the planned auction.


Greg Ward

Media Liaison


Phone: (09) 521 2410

Mobile: 025 387 037


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