2degrees wants one-third chunk of 4G pie

Telecom, Vodafone and 2degrees claim that 700MHz is the only spectrum that can deliver 4G to rural areas

2degrees has set its sights on securing a one-third share of the 4G "digital dividend" spectrum that will be freed up by the closure of analogue television broadcasting.

The company, which trumpeted last week its success securing a $165 million overdraft from Bank of New Zealand, called on the Government to sell the spectrum at a "reasonable price" with flexible payment terms.

2degrees says the Government should charge no more than the price it had paid to clear the frequency range. Communications Minister Amy Adams told a select committee earlier this month that had cost $157 million.

4G spectrum auctions overseas suggest New Zealand's digital dividend spectrum should be worth much more than that, up to several hundred million dollars. But analysts have noted the Government has not pressed for high prices in the past.

Telecom also urged the Government not to "get distracted" by trying to maximise the proceeds of the digital dividend auction, saying the wider economic benefits of using the 700MHz spectrum for 4G would be "in the billions".

2degrees says in a submission to the Business, Innovation and Employment Ministry that even an equal share of the 700MHz digital dividend spectrum would leave it at a disadvantage when compared with Vodafone and Telecom, because of its rivals' existing spectrum holdings.

Officials have proposed allowing at least one bidder to pay extra for up to four of the nine blocks of spectrum on offer, but 2degrees argued no one bidder should be able to secure more than a one-third share.

The Government plans to auction the 700MHz radio spectrum, which is being freed up by the nationwide closure of analogue television broadcasting, later this year. Submissions on the auction rules closed on Monday, though the reserve price won't be set until closer to the auction.

Vodafone, 2degrees and Telecom all say in their submissions that the 700MHz band is the only spectrum band in New Zealand that could deliver 4G to rural areas economically.

Telecom says freeing up the 700MHz spectrum for 4G would mean "for the first time, many rural businesses and consumers will have access to broadband speeds currently only available to urban fixed-line consumers".

Federated Farmers appealed to the Government to ensure telecommunications companies that successfully bid for the "digital dividend" radio spectrum rolled out 4G services to "as close to 100 per cent" of the country as possible.

Last month, the Business, Innovation and Employment Ministry suggested successful bidders could be forced to roll out 4G to half the population within five years, and that an additional requirement could oblige them to provide 30 per cent population coverage for their 4G networks in each of New Zealand's 16 regional council zones within the same time frame.

But Federated Farmers called on the Government to go further, saying it should require that at least "a portion" of remote rural areas that won't get fast broadband as a result of the rural and urban broadband initiatives would be served by 4G.

It says some of its members were finding it difficult to comply with new rules that required the electronic tagging of cattle, because of poor internet coverage.

It also says in its submission that New Zealand Post's proposal to reduce postal deliveries means rural communities with little or "no internet coverage" will become increasingly disadvantaged.

"There is also a social aspect to the internet, which some rural communities are currently missing out on," Federated Farmers says, giving Stuff, Twitter and Facebook as examples.

"Twitter is a great way to discuss an issue and come up with a resolution." Farmers could discuss topics such as on-farm health and safety and ask other farmers how they had dealt with certain problems, it says.

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