The arrival of Dense Air has big implications for New Zealand’s cellular market, apart from anything else it will spice up the next spectrum auction.

London-based Dense Air has purchased a considerable amount of New Zealand wireless spectrum from Malcolm Dick’s Blue Reach business and Cayman Wireless.

The company intends to set up a wholesale small cell mobile network. Dense Air says it will not compete direct with existing mobile carriers. It says it can begin operation “almost immediately”.

Dense Air now has rights to 70 MHz of spectrum in the 2.5GHz band. Of this, it acquired 30 MHz from former CallPlus owner Malcolm Dick who previously talked about running a similar wholesale cellular operation using his Blue Reach brand. The rest comes from Cayman Wireless which is a part of Craig Wireless, a Canadian company.

The New Zealand Herald reports Dense Air paid a total of almost $26 million for the spectrum. That is about 13 times the amount the owners paid for the spectrum in 2007.

Spectrum price

There are implications for prices when the government decides to auction 5G spectrum some time in the next 18 months or so. If Dense Air decides to enter that auction it will push prices higher and could edge out cash-strapped 2degrees and Vodafone.

Dense Air is unknown in New Zealand. The company began operation in February of this year and part of US-based Airspan.

The company says it is a new class of wholesale network operator. It aims to “enhance and extend” coverage and capacity for existing mobile carriers and says it will run as a “carrier of carriers”.

Small cell sites

In practice this means Dense Air will build and run a series of 4G and 5G small cell sites. The aim is to compliment existing networks. It says that in most cases these will extend existing networks in places that need denser coverage. This might be places such as shopping malls, office parks, campuses or sports stadiums. Dense Air says its small cell approach can dramatically improve performance and capacity.

That said, Dense Air has more than enough spectrum to compete with all three carriers in New Zealand. Should it choose to do so, it could offer MVNO (mobile virtual network operator) services. This could be of interest to telcos such as Vocus or MyRepublic, both wish to offer mobile services but own neither spectrum nor their own cellular networks.