Budde's state of the telecoms industry address

There's no business case for 3g networks in New Zealand, says Australian telecomms analyst Paul Budde.

There's no business case for 3G networks in New Zealand, says Australian telecomms analyst Paul Budde.

Speaking at a seminar in Auckland last night, Budde said it made no sense for any of New Zealand's telecomms carriers to build a 3G network "in a market the size of Melbourne," and that it was a matter of "big egos and people wanting to score points," that was driving our carriers down that path.

Any 3G network that does emerge would most likely come from a consortium of carriers, he says.

"My initial thought is that TelstraClear and Vodafone will do something together. If they do, I could envisage that it could create another market for fixed wireless connections."

However, the fact TelstraClear has issued its own tender for a 3G network indicates it may not partner with Vodafone after all. "I'd bet they're looking at working with Telecom."

Telecom is being "stung" by Vodafone and, in terms of its mobile offerings, is "all over the place.

"It's got three systems, analogue, 025 and 027, three sets of engineers."

The money carriers are spending and planning to spend on 3G networks is going to waste, he says.

"I'd like to see the money that will be wasted in that area, spent on broadband infrastructure."

Despite audience members pointing out that carriers' mobile data revenues are on the increase, Budde said mobile business applications will have limited uptake and that the majority of SMS traffic is generated by people aged under 24.

"That won't change dramatically in the next 5 to 10 years. The internet and email on your mobile phone will be used if people are desperate and can't wait 'til they get back to the office."

Employers are clamping down on workers' use of SMS because of the bills it racks up, he says.

"You're left with the kids' market."

Other subjects traversed by Budde included his prediction that Telstra will buy Telecom at some time in the future.

However, an audience member questioned the likelihood of regulatory approval being given for such a move.

Budde gave his blessing to local loop unbundling, noting that it will be expensive for Telecom initially, but is in the long term interest of New Zealand's telecoms industry.

"The unbundled local loop isn't a panacea, it won't bring change overnight."

New Zealand is lagging behind Australia in terms of wholesaling internet services, he told the audience.

"In Australia, 75% of the internet market is in the hands of other ISPs, but in New Zealand 75% is [Xtra]."

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