Telstra aims for spring launch of third NZ cellular service

Telstra New Zealand expects to have a mobile offering by the spring, despite the news last week that talks with BellSouth about a joint operation have fallen through.

Telstra New Zealand still expects to have a mobile offering by the spring, despite the news last week that talks with BellSouth about a joint operation have fallen through.

Telstra is going ahead with its open network in conjunction with two so far unnamed partners, says managing director Peter Williamson.

"We can't muck around. We've always said we were prepared to build a network if necessary, although we would look at other options first. They didn't pan out, so we're going to build one."

And he is highly critical of BellSouth's approach.

"I would have thought the opportunity for BellSouth and Telstra together would have added performance to both companies. It would appear they were just too direction-less at the time to make a decision."

Although unable to say who the partners are, Williamson says one of them is "a globally known company with a presence here" and the other, equity partner, is an Asian investor.

"Which is sad--we would rather have done it here with existing players."

Williamson won't say how he plans to get a network up and operating in such short time, except that a lot of the work has been done.

"Do you really think we'd be foolish enough not to have done a lot of that already? We're not Clear… No, we haven't got planning permission yet, but ... I'd rather not go into it at this stage, but rest assured, issues like the Resource Management Act have been well addressed."

Which suggests two things--either any link up is likely to be with a compnay with established sites which could be used for cellular repeaters; or that Telstra still hopes to do a deal with BellSouth and is hoping to put pressure on it to come back to the table. Industry sources suggest the latter is the most likely, but Williamson's comments seem to suggest Telstra is shutting the door on that option.

"We have already negotiated the issues out with our partners in this, and we're in the final stages of due diligence, mainly to do with technical and environmental issues.

"Telstra MobileNet has built what is probably the biggest network in the world, analogue and digital, and Australia has the highest penetration of mobile phones in the world. We've had a fair bit of experience of this and I believe we can deliver not just the infrastructure but the marketing and the sales force necessary." Initial after-hours customer service functions are likely to be sourced from Australia, he says.

Meanwhile, both BellSouth and Telecom are obviously attempting to pre-empt as much of Telstra's potential custom as possible, with both companies spending up large on full-page advertisements in the main metropolitan daily papers. Telecom has slightly more than 340,000 mobile customers and BellSouth is believed to have about 60,000, and there are indications that growth is slowing. Given this and Telstra's practices elsewhere, it is likely to compete aggressively on price when it's service is launched.

"We're not going to cover the Milford track, but we will provide a service that enables business people to be contacted at work or at play. It'll be pretty comprehensive," says Williamson.

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