October 30, 2013
Spectrum auction fails to fix market imbalance
The Government’s refusal to make any provision for Maori appears to have cost Two Degrees dearly in the auction of 4G Spectrum.
The third mobile phone network operator, which uses spectrum leased from minority shareholder Te Huarahi Tika Maori spectrum trust for its existing data network, bought management rights to a pair of 10 Megahertz blocks for $44 million.
Vodafone and Telecom each bought a pair of $15 megahertz blocks for $66 million.
Communications Minister Amy Adams says international experience indicates that 2×10 MHz is sufficient to run a viable 4G network.
But Tex Edwards from Two Degrees shareholder KLR International says the spectrum allocation was a policy error.
He says it missed the opportunity to reset competition settings and fix the market power problems that have troubled the industry for nearly two decades.
He says Minister Adams has repeated the mistakes of her predecessor Maurice Williamson, whose allocation of GSM spectrum in the 1990s gave Vodafone a dominant market position.
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