Rich new ways to share data are already becoming apparent as consumers move up to latest generation mobile phones. In fact the term phone is becoming an anomaly as these multifunctional handheld devices double as MP3 players, sound recorders, video and still cameras, digital assistants, email and web clients and video conference terminals. With the growing capacity of memory cards they’re able to store huge amounts of data.

All up there are more than three million mobile-phone users in New Zealand. Telecom has more than 1.6 million customers and Vodafone 1.9 million, although all the evidence is Telecom has been closing the gap in the latter part of this year.

Both parties are under pressure from the government and consumers to bring their prices down to a more acceptable level. New Zealand has among the highest mobile-phone prices in the developed world; 70 per cent higher than the OECD average, and the second highest in the developed world. Standard charges for Vodafone and Telecom on a prepaid phone are 89c a minute, $1.39 at peak time and 49c off peak, with little movement over the past two years.

The two carriers have been at each others throats expanding the capabilities of their networks to more locations around the country, boosting their marketing to appeal to youth with pixting and video services, and improving their roaming agreements with partnerships for more affordable coverage around the world. The next battleground will undoubtedly be speed and next generation services such as music, video viewing and videoconferencing.

While Vodafone’s current network speed is about one third of that offered by Telecom, both are planning to ramp up their capabilities over the next year. Telecom intends to accelerate the performance of its T3G EV-DO third generation network by the end of 2006 with a $15 million upgrade.

Its existing CDMA 1xRTT network, launched in 2002, delivers speeds of up to 155kbit/s and last year the data component was upgraded to 2Mbit/s. Next year’s enhancement will impact both data and voice, enabling customers to download data to their handsets at up to 3Mbit/sec with a 1.8Mbit/sec return channel. This will expand the capabilities of its Push2Talk service, likened to a walkie talkie, with up to five customers able to listen to a conversation and respond individually with less time lag.

Meanwhile Vodafone's is spending more than $200 million to move into the broadband cellular stakes. It’s W-CDMA mobile network launched in August this year is about to be upgraded and it’s scoping out new technology known as HSDPA (high speed download packet access) which will hike up its throughput, in optimal conditions, to between 1.6Mbit/sec and 7Mbit/sec.

Both network enhancements will require compatible phones and network coverage for videoconferencing and higher end services. The capabilities of both networks have gone through a serious evolution in the past year. Building on the enormous success of texting, Telecom and Vodafone mobile phone customers are now able to send photo and video messages and sound files to each other.