Woosh chair says failure to lift spectrum cap 'not a major issue'

Application to lift caps in 2.3/2.5 GHz band denied; sale to Craig Wireless under cloud

Woosh’s bid to lift the allocation cap in the 2.3/2.5GHz bands, in order to facilitate a $5.5 million sale to Craig Wireless, has failed. But chairman Rod Inglis appears unconcerned.

“The spectrum caps expire in a year and we don’t see it as a major issue,” he told Computerworld.

However, when asked directly if this will affect the proposed sale of Woosh - in which Craig Wireless has offered $5 million and Inglis will contribute $500,000 - he was more circumspect. “I wouldn’t like to say anything beyond that.”

According to a press release on the Craig Wireless website, the sale is conditional on the company getting hold of Woosh’s spectrum rights. However, the rules of the auction state that no company can own more than 40MHz in the bands and, if the deal went through, the acquisition cap would be exceeded. The rule around the caps is due to expire next year.

Ministry of Economic Development radio spectrum manager Len Starling says there was only weak evidence that lifting the cap would promote investment in the 2.3/2.5GHz bands.

“As we did not see clear evidence of a net benefit to the market and competition we concluded that the case for removal had not been made. We therefore recommended to Minister Joyce that, in the absence of a clear net benefit, the Crown should favour regulatory certainty by maintaining the status quo. The Minister has agreed to this approach,” he says.

When considering the application to lift the caps the MED carried out a closed consultation process, only asking for submissions from other rights holders in the 2.3/2.5GHz bands.

CallPlus CEO Mark Callander, whose company was consulted, has been publicly opposed to lifting the allocation cap. He has previously stated that lifting the cap would set a “dangerous precedent” that could impact the rules in other spectrum bands.

He welcomes the decision to retain the cap for another year.“The MEDs decision is a positive outcome not only for the 2.3GHz and 2.5GHz bands, but it has also prevented a dangerous precedent been set for future spectrum assets such as the 700MHzm,” Callander says.

“If regulatory approval had been given to allow the Craig Wireless acquisition to proceed, it would not have resulted improved competition or more choice for New Zealanders. This fact supports the MED’s position on this issue; however it is important that the MED remains focused on the enforcement of the rules to provide regulation certainty for existing players.”

Craig Wireless has been approached for comment.

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Tags Woosh WirelesscallplusMinistry of Economic DevelopmentMEDcraig wirelessmark callandarLen starlingrod inglis

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