Rural 4G opens up in New Zealand

Communications and Information Technology Minister Amy Adams says 4G mobile technology is a step closer following the Commerce Commerce’s decision to grant Telecom clearance to acquire 2×20 MHz in the 700 MHz band.

“Network operators can get on with building their 4G networks and providing consumers with world-class technology,” Ms Adams says.

The 700 MHz band will be used for 4G-LTE networks, capable of mobile broadband data speeds up to ten times faster than current 3G networks.

The Government’s auction conditions for the spectrum will help to ensure that 90 per cent of New Zealanders are able to access 4G services within five years, and mobile coverage will increase.

All the successful bidders are required to upgrade 75 per cent of their existing rural cell towers to 4G within five years.

In addition, Vodafone and Telecom are required to build five and ten new towers each year respectively, for five years, in areas that they do not currently provide coverage to.

It is likely that the 700 MHz band will initially be used to build rural 4G networks, with 1800 MHz being used for 4G in cities.  700 MHz is good for covering large areas, while 1800 MHz is better for covering smaller areas with higher user densities.  All three network operators already have equal amounts of spectrum in the 1800 MHz band (2×25 MHz each).

A final auction round will be held next month to determine exactly which positions (frequencies) within the 700 MHz band each bidder will acquire.  Options for this round were announced on 23 May.

The Commerce Commission’s decision confirms the results of the Government’s spectrum auction, held from November 2013 – January 2014:

• Telecom: 2×20 MHz (four lots), $149 million +GST
• Vodafone: 2×15 MHz (three lots), $66 million +GST
• 2degrees: 2×10 MHz (two lots), $44 million +GST

Total revenue from the auction is $259 million. The Government has spent $147 million clearing the 700 MHz band to allow the spectrum to be used for 4G mobile networks.