Book Reviews | Gordon Campbell | News Flashes | Scoop Features | Scoop Video | Strange & Bizarre | Search

 


Did Telecom NZ pay too much for 4G spectrum?

Telecom NZ paid NZ$83 million dollars for the last slice of 700 MHz spectrum. The company beat Vodafone to secure the final 2 x 5 MHz block left on the table from the first round of bidding.

Overall Telecom NZ picked up four blocks or 2 x 20 MHz while Vodafone purchased three blocks and 2degrees acquired two blocks.

The size of a block in the 700 MHz band is significant because more 4G spectrum means faster data services.

That should give Telecom NZ a competitive boost against Vodafone which has a head start in rolling out 4G. At the moment Vodafone's 4G network covers a much wider area than Telecom's.

Not just 700 MHz


700 MHz spectrum should not be seen in isolation. As Paul Brislen points out on the Tuanz blog:
...when you look at the overall spectrum holdings you’ll find that 2Degrees has just on 100MHz of spectrum, Telecom has double that and Vodafone has nearly 300 MHz of spectrum available to it right across the managed spectrum range.

While the 700 MHz band is prime real estate, having an extra 2 x 5 MHz does little to address the overall balance.

 Did Telecom NZ pay too much?


NZ$83 million is a high price considering the other similar-sized blocks went for NZ$22 million a piece. No doubt the government will be pleased with the windfall.

Telecom NZ's willingness to pay a high price is as much a reflection of its need to deny the spectrum to Vodafone as the opportunity it brings.

What about the price? When analysts compare international prices paid for spectrum they measure the cost per Megahertz per head of population. Because this work is often done in Europe, comparisons are made in euros.

High by European standards


Last year Analysys Mason compared European spectrum prices and found on average carriers paid between €0.5 and €0.6 per MHz per person.

10 MHz of spectrum for a population of 4.4 million means Telecom NZ paid NZ$1.9 per person per MHz. That's roughly €1.2 or twice the average paid per person per MHz by european carriers.

On that basis, Telecom NZ paid too much.

When you aggregate Telecom NZ's entire investment in the 700 MHz band you get a total of €0.85 per MHz per person. Again that's above the European average.

For perspective, Vodafone's 2 x 15 MHz block works out at €0.5.

Clearly there's a premium for denying the 2 x 5 MHz block to a competitor, but on a simple calculation it appears Telecom NZ has paid a high price to have a little more spectrum. The pressure is now on the company to make it pay.

[digitl 2014]

digitl on Google+

© Scoop Media

 
 
 
 
 
Top Scoops Headlines

 

Suzan Mazur: Stuart Newman: The Virosphere And Non-Linear Evolution

It was Stuart Newman who was the first of the Altenberg 16 scientists I discussed developments with following the Extended Synthesis symposium in 2008 at Konrad Lorenz Institute, a meeting I was barred from attending for having gotten out in front of ... More>>

Werewolf: Artificial Intelligence: Real Anxieties?

The movie Ex Machina feels so current there are powerful moments of recognition – despite the seemingly unlikely scenario of a walking, talking artificial intelligence (AI). Right now Google is enlisting its massive databases, drawing on the contents of every email and Internet search ever made, in the service of what has been called ‘the Manhattan Project of AI’. More>>

ALSO:

Open Source, Open Society: More Than Just Transparency

Bill Bennett: “Share and share alike” is the message parents drum into children. But once they grow up and move out into the wider world, the shutters start to come down. We’re trained to be closed. Dave Lane, president of the New Zealand Open Source Society, says that explains the discomfort people find when they first encounter the open world. More>>

ALSO:

Werewolf: Journalism, History And Forgetting

Compare that [the saturation coverage of WWI] not just with the thinly reported anniversaries last year of key battles in the New Zealand Wars, but with the coverage of the very consequential present-day efforts to remedy the damage those wars wrought, and the picture is pretty dismal. More>>

ALSO:

Werewolf: Climate Of Fear

New Zealand, promoting itself as an efficient producer, has been operating as a factory farm for overseas markets with increasing intensity ever since the introduction of refrigerated shipping in 1882. The costs to native forests and to bio-diversity have been outlandish. The discussion of impacts has been minimal... More>>

ALSO:

Greek Riddles: Gordon Campbell On The Recent Smackdown Over Greece

There had been a fortnight of fevered buildup. Yet here we are in the aftermath of the February 28 showdown between the new Syriza government in Greece and the European Union “troika” and… no-one seems entirely sure what happened. Did the asteroid miss Earth? More>>

ALSO:

Keith Rankin: Contribution Through Innovation

The economic contribution of businesses and people is often quite unrelated to their taxable incomes. EHome, as a relatively new company, may have never earned any taxable income. Its successors almost certainly will earn income and pay tax. Yet it was eHome itself who made the biggest contribution by starting the venture in the first place. More>>

ALSO:

Get More From Scoop

 
 
 
 
 
 
 
Top Scoops
Search Scoop  
 
 
Powered by Vodafone
NZ independent news