Telecom New Zealand has announced plans to spend around NZD40 million (US25 million) on building a third-generation (3G) network to make it a stronger rival to rapidly-growing Vodafone in the country’s wireless market. Telecom has contracted Lucent Technologies to upgrade its CDMA2000 1X mobile network to EV-DO technology to enable the operator to offer high speed data and video calling to customers in Auckland, Wellington, Christchurch and key holiday destinations by Christmas. The incumbent hopes that its intensive rollout plan will catch its rivals off guard, putting Telecom months – even years – ahead of next generation launches by rivals Vodafone, TelstraClear and the still dormant Econet Wireless. Telecom said the upgrade will be within its NZD650 million capital expenditure forecast for its current fiscal year.
Since taking over the NZ operations of US-based BellSouth five years ago, Vodafone has rapidly garnered more than half of the country’s mobile market, mostly at the expense of Telecom’s wireless business Telecom Mobile. Vodafone’s growth has far outstripped Telecom’s; its 400,000 net additions in the 15 months to the end of March was ten-times the paltry figure added by the incumbent. Telecom faces further competition from the MVNO offering of Australian incumbent Telstra, TelstraClear, which provides its services over Vodafone’s network. Additionally, Econet Wireless International’s New Zealand subsidiary is confident of finally rolling out services this year, following repeated delays since first announcing plans to build out a GSM network in September 2001.