Clear no bid, Ihug no comment

While Ihug refuses to confirm its plans for next month's radio spectrum auctions, Clear yesterday declared that it would not be participating.

While Ihug refuses to confirm its plans for next month's radio spectrum auctions, Clear yesterday declared that it would not be participating.

Ihug director Tim Wood declined to comment on newspaper reports that the company was seeking $40 million in capital to back a joint bid with Lucent Technologies for a slice of the spectrum to be offered on July 10.

A number of Lucent personnel are also understood to have been at Ihug's Auckland headquarters in recent weeks.

"We probably won't make any comment at all," said Wood. "We're a private company and what we're doing is our business, so it's not really for public consumption."

It was reported that Ihug had entered into a strategic partnership with Lucent to provide technology for rollout of a GSM cellular network. In February, Lucent won a contract worth nearly $1 billion to build new CDMA wireless networks for Telecom New Zealand and its Australian subsidiary AAPT.

If Ihug does have a relationship with Lucent, it is likely to have flowed from its long-term association with Ascend Communications, which provides Ihug's dial-in platform and was acquired by Lucent early last year.

On Monday, Ihug filed an application in the High Court seeking an interim injunction and judicial review of the way government has structured the spectrum auction. The government has capped spectrum earmarked for so-called 3G mobile services, meaning that at least four bidders will be able to acquire spectrum and compete. No similar provision has been made for the block of second-generation spectrum on offer.

"Third-generation technology is still under development, and may not be ready for at least another three years," Ihug managing director Nick Wood said this week. "Without a similar cap for second-generation spectrum, new and innovative local bidders like Ihug are likely to be shut out. Real competition would be delayed for at least another two or three years, allowing major players like Telecom and Vodafone to continue to dominate."

A court date for the hearing may be announced as soon as today.

Meanwhile, Clear ruled itself out of the 3G auction yesterday, saying it would seek partnerships rather than trying to build its own mobile network. A statement yesterday said Clear was talking to several prospective 3G partners, including its existing "mobility partner", Vodafone.

Clear will focus on its "significant" investment in fixed networks and broadband LMDS (local multipoint distribution service) wireless services. Clear has already announced an LMDS wireless rollout this year, part of an initial stage of a three-year network extension. The rollout, funded by Clear's owner, BT, is one of a series of investment decisions totalling $330million to date.

"We looked very closely at participating in the forthcoming 3G spectrum auction and, after an extensive business case analysis, have chosen to deliver current and 3G mobility services through means other than owning our own network," says Clear's marketing and online services director Ian Scherger.

"Our decision took into account the size of the New Zealand market, our focus on business markets, and our existing mobility reseller agreement with Vodafone, a world leader in mobility services.

"Our focus is on leveraging off our existing national fibre-optic network and consolidating our position as a force in the online world."

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