Competition for wireless local loop radio spectrum in the latest government auction probably pushed up prices but is likely to benefit users in the long run.
TelstraClear spokesman Matthew Bolland says the three lots of wireless local loop (WLL) spectrum TelstraClear successfully bid for will be used for service improvements at the customer end.
“We’ve put out an RFI [request for information] for potential suppliers of base stations and customer premises equipment.”
The other spectrum TelstraClear bought, two lots of LMDS (local multipoint distribution service), will be used to improve the main network, Bolland says.
“It will allow us to manage customer expectations better. Sometimes we can’t give service level agreements across the board because we may have a customer who we don’t provide access for totally across our network. We may have to go to another network [as well] and we can’t provide the same guarantee. The new spectrum will allow us to connect customers right through.”
TelstraClear paid $675,000 for two lots of WLL and $710,000 for one, while the two LMDS lots cost it $150,004 and $180,445 respectively.
Vodafone engineering general manager Jeni Mundy says Vodafone bought one lot of WLL and two lots of LMDS “for use on our own transmission network”.
“Sixty-five to 70% of our network is linked via our own microwave system — it’s a key part of the infrastructure and spectrum is very valuable.”
Mundy says Vodafone is happy with the price it paid, $730,000 for WLL and $393,000 for LMDS.
She says the competition in the WLL auction, while it may have pushed prices up, is positive for New Zealand.
“It’ll mean more competition, which is good in the New Zealand environment. While Vodafone intends to use [the spectrum it bought] for its transmission, I’m sure others intend to use it for last mile access.”
BCL bought three WLL lots at $710,000 a piece and a statement from the company quotes managing director Geoff Lawson saying “we’re delighted, having secured the maximum three lots permitted per bidder.
“BCL will use the spectrum to advance plans for a broadband wireless open access network available to all telecommunications retailers.”
The dark horse in the auction is power retailer Counties Power. The company’s chief executive, Neil Simmonds, was unavailable for comment.
Counties bought two lots of WLL, one at $540,000 and the other at $700,000.
It is believed the company plans to wholesale bandwidth and Vodafone’s Mundy says such plans would be consistent with moves by other power retailers getting into the broadband market, such as Vector, which is offering ethernet services through its Tangent subsidiary.
In all, the spectrum auction netted the government a little over $9 million.