HOME Technology Nov 2008
Cellular refresh imminent
Mobile competition ahead
Mobile customers can expect heightened competition with both major cellular carriers, under pressure from the government to lower their prices, finally facing off on with compatible technology as they upgrade their (3G) networks.

The Commerce Commission is still closely monitoring the $2.3 billion mobile market with a view to creating new rules that might limit interconnection fees between Vodafone and Telecom and stop them charging customers extra for calling or texting rival networks.

Currently both Telecom and Vodafone operate incompatible networks, with Telecom in particular struggling with international roaming arrangements. It had planned different networks for regional and metropolitan areas but its hand was forced when Telstra, its roaming partner in Australia, quit the CDMA market and manufacturer Nokia stopped developing the phones.

Telecom is now fast tracking its new wideband 850MHz WCDMA (Wideband Code Division Multiple Access) network claiming it’ll be live from June next year with 97 percent coverage. The wider cell tower coverage means it’ll be quicker to roll out in rural areas. Telecom has also committed to HSPA+ (Evolved High Speed Packet Access), which offers even higher broadband speeds in more built up areas.

LIfting the speed limit

Telecom’s current network is capable of delivering 800kbit/sec for downloads and 300kbit/sec for uploads but the 3G upgrade, costing $574 million, will boost that to 2Mbit/sec and beyond. The new network is expected to be a catalyst for new mobile businesses applications, location-based services and music and movie downloads.

Meanwhile Vodafone claims its wideband 900MHz CDMA 3G upgrade already reaches two thirds of the population. It has 400,000 customers and claims its upgrade in rural areas will give equivalent coverage to Telecom by mid-2009. The average mobile speed is currently 800kbit/sec to 1.4Mbit/sec.

Vodafone is also upgrading its network to HSPA, broadening out from Auckland to the rest of the country over the next 18 months. By 2010 it will have invested $500 million in its Red mobile broadband network and is confident it can double its speed year on year.

It’s claimed mobile network speeds could accelerate to 50-100Mbit/sec over the next few years. Japanese NTT DoCoMo tested a 250Mbit/sec super 3G network earlier this year making downloading movies on the fly a realistic option.

And we might get a long awaited third mobile player with NZ Communications finally signing co-location and interconnection agreements with Vodafone and planning to invest $150 million in its network.

Competition imminent

TelstraClear has also launched a significant mobile service but got a shock when it discovered the arrangement it had with Telecom to resell access did not extend to the new W-850 network until at least 2011. Telecom wants exclusive use for its own customer base before entering any reseller deals. TelstraClear will have to make do with using the increasingly orphan CDMA network which Telecom will switch off in 2012.

New blood in the market and the two staunch mobile rivals pulling out the stops to complete their next generation mobile infrastructure will increase pressure on prices and competition. While they’ve been neck to neck for a couple of years Vodafone has recently gained ground to 65 percent share.

There are currently 4 million active mobile phone connections in New Zealand. Once the networks have common technology, there’ll be less need for people to have a phone in both camps so they can take advantage of the specials and avoid cross network charges.

Instead there will be more focus on the real issues; speed, coverage, roaming and who’s offering the most attractive deal on phones and services. The clincher may be around the data charges which have been among the highest in the world. With smart 3G phones geared for network performance more enticing deals to attract and retain business will be expected all round.
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