TEL
22/01/2014 14:35
GENERAL
REL: 1435 HRS Telecom Corporation of New Zealand Limited
GENERAL: TEL: Telecom successful bidder for final lot of 700 MHz spectrum
MARKET RELEASE
22 January 2014
Telecom successful bidder for final lot of 700 MHz spectrum for 4G mobile
services
The Government has announced today that Telecom is the successful bidder in
the auction of the final 2x5 MHz lot of 700 MHz radio spectrum.
Telecom Chief Executive Simon Moutter said, "We are very pleased to have been
informed that we have successfully secured a fourth lot of 700 MHz spectrum.
This fourth lot will provide significant benefits to customers in terms of
the potential speed and capacity of Telecom's 4G mobile network.
"The more of this 700MHz spectrum a carrier has, the faster the speeds it
will be capable of offering and the more data it can carry, so this fourth
lot puts Telecom in the best position in the market to deliver a very
high-performance 4G mobile network for New Zealand, including in less densely
populated areas.
"This demonstrates Telecom's absolute commitment to being the leader in
mobile and data network capability and provides a strong foundation for
Telecom to continue to deliver world class mobile and data services to New
Zealanders across the country."
Telecom bid $83 million for this final lot, in addition to the total of $66
million for three lots in the initial auction round. The purchase of a fourth
2x5 MHz lot is conditional upon approval from the Commerce Commission.
Mr Moutter added, "We've now got a leading data network integrating 3G, 4G,
WiFi, ADSL, VDSL and Fibre backed up by a nationwide optical transport
network that is underpinning anytime, anywhere connectivity for customers.
With the addition of this 700 MHz spectrum, we will be in a very strong
position to support New Zealand's data, mobility and digital services
future."
In the first round of the auction, announced on 30 October 2013, Telecom and
Vodafone each successfully bid for 2x15 MHz (three lots), while 2Degrees
successfully bid for 2x10 MHz (two lots) leaving a single 2x5 MHz lot unsold
from the available nine lots.
The auction for this lot has proceeded over recent weeks at $1 million
increments for each bidding interval, starting from the $22 million reserve
price. The significant price premium over the reserve price reflects the
customer benefits that this additional fourth lot will provide to Telecom's
mobile network in future years.
A final assignment process, during which each successful bidder will bid for
a location within the spectrum band, is still to be held.
Background
The 700 MHz spectrum band, previously used for analogue broadcast services,
is expected to allow mobile operators to provide 4G mobile broadband services
- already being built in New Zealand's main cities - much more extensively in
New Zealand, including in less densely populated areas.
Telecom launched 4G services, utilising existing spectrum in the 1800 MHz
range, in Auckland, Wellington and Christchurch in November 2013 and extended
its network in December to several popular holiday destinations.
Please find enclosed a copy of the Minister's statement.
- ENDS -
For media queries, please contact:
Richard Llewellyn
Head of Corporate Communications
+64 (0) 27 523 2362
For investor relations queries, please contact:
Mark Laing
General Manager Corporate Finance
+64 (0) 27 227 5890
End CA:00246286 For:TEL Type:GENERAL Time:2014-01-22 14:35:56
