Econet wants on Vodafone's network

Commissioner could be called if negotiations for a roaming deal fail

Econet Wireless has declared its hand in the upcoming 3G mobile market and says it will recommence negotiations with Vodafone about roaming on its network in the next few weeks.

New Zealand project manager for Econet Wireless, Tex Edwards, says the company failed in its negotiations in 2001–2 with the UK-based cellphone giant but says the company is now in a far better position to negotiate a deal.

"The technology path is more certain, we have secured our funding situation and we're ready to move forward."

Econet has been under fire for its lack of progress in the New Zealand market — it originally announced plans to build a network in 2001, but Edwards says that announcement was premature and he and the rest of the company have since been reluctant to talk about their plans for the New Zealand market in the media.

Econet needs to secure a commercial agreement with a network provider for roaming so it can offer services to all of New Zealand while still building its own network. Edwards says the company is dead set on a 3G network and that its technology of choice, Wideband CDMA, means it has to go with Vodafone.

The Telecommunications Act allows a new entrant to "piggyback" off an existing network as long as the new entrant plans to build its own network.

National roaming is one of the Act's "specified services", meaning the Telecommunications Commissioner will be keeping a particularly close eye on commercial negotiations and can be called on to make a regulatory decision should negotiations fail.

The Act requires a new entrant to build a "new cellular mobile network that covers no less than 10% of the area in which the New Zealand population normally lives or works". However, it also says a new entrant can apply for a determination from the Commissioner before achieving the rollout threshold if it doesn't have an existing commercial agreement with another provider, no other mobile determination is pending and the commission has approved its plan for any future rollout.

Edwards wouldn't comment on whether Econet will go to the Commission seeking such a determination if its negotiations with Vodafone fail. "We have faith in the Commissioner and the work that's been done to date on issues like mobile termination rates."

Edwards says he isn't phased by the possibility of TelstraClear also building its own cellular network, and in fact considers it an endorsement of Econet's plans.

"The situation as it is today is that New Zealand doesn't have competition. There's all this talk of a cosy duopoly but in fact it's two separate monopolies. If you look overseas you'll find no other country where the mobile networks don't interoperate and that's lead to this terrible situation New Zealanders find themselves in."

Because Telecom and Vodafone use different technologies there is little or no "churn" in the New Zealand mobile market, compared with almost all other mature mobile markets.

"In Australia Hutch, for example, has three other providers it can use for roaming. In New Zealand there's nothing." Edwards says roaming has to be mandated by the regulator because without his influence the commercial players aren't interested in allowing a new entrant into the market.

"You just have to look at the way both Telecom and Vodafone argued against the MED's report into mobile charging in New Zealand to realise we're right."

However the commission has already indicated it won't be regulating the 3G market space any time soon. The existing investigation into mobile termination charges specifically excludes 3G customers from its brief. Edwards says that's not acceptable.

"Telecom already claims to have more than half of its mobile customers on its 3G network so is the commission saying Telecom doesn't have to adjust its pricing for those customers?" Edwards says 3G networks are being rolled out simply because they are more efficient than 2G equivalents regardless of whether the provider makes more money from new services, like video calling.

"3G is simply more efficient in terms of network use for both data and voice. These aren't materially different networks. The difference between 2G and 3G is just a matter of speed. It's not like one's a horse and one's an aeroplane — one's a diesel car and the other's a petrol car."

Vodafone's external communications manager Tracey Palmer won't comment on issues surrounding Econet at this stage. However, Vodafone's public policy manager, Roger Ellis, last month told Computerworld that a new entrant in the mobile market could begin building its own network and then be granted roaming rights onto Vodafone's, but would have to meet certain criteria first.

"They're required in the [Telecommunications] Act to have built a network that is 10% of the area in which the New Zealand population normally lives or works, and to demonstrate their ability to build the rest of their network. It's to give them a temporary leg up in the market — it's not supposed to be a long term solution."

Ellis says any company planning to ask for roaming access to another company's network would have to lodge its plans for network build, including timelines, schedules and a detailed breakdown, with the Commerce Commission.

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