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Bill Bennett

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Telecom NZ 4G next month, no extra charge

Telecom NZ said this morning it will launch its 4G mobile internet services in parts of Auckland, Wellington and Christchurch next month. The date is earlier than anticipated.

The company is behind Vodafone which launched its 4G service in February. However, unlike its rival which charges users $10 a month extra to use the fast mobile data network, Telecom NZ customers will get the extra speed at no extra cost.

Telecom NZ 4G will go live on November 12 and will be available to all customers equipped with suitable handsets. The company is selling 4G ready smartphones. Owners of existing 4G capable phones will need to change their Sim cards to use the network.

Telecom NZ 4G built for data, not voice

4G is the name given to a mobile network optimised for data, not voice. The technology offers wireless data speeds which, at times, can outperform copper broadband services. It makes it practical to run applications, such as streaming video, that struggle on 3G mobile networks.

On the downside, the faster data service chews through data more quickly than conventional mobile networks. Telecom NZ expects its Wi-Fi network to take some of the strain.

Like Vodafone, Telecom NZ’s 4G network will be on 1800 MHz frequency band at first, part of the spectrum best suited for urban areas. Both companies aim to offer 700 MHz services next year after the spectrum auction due to take place later this month. 700 MHz will give the network greater reach in less built-up areas.

Last week Telecom NZ reported a huge surge in mobile data traffic – numbers are up 92 percent in a year. In September traffic surged again with thousands watching streaming video coverage of the America’s Cup yacht races on handsets and tablets. Gen-i CEO Tim Miles said that event will prove to be a turning point in widespread acceptance of streaming video over mobile data networks.

Data use fueling mobile growth

VodafoneWhen Vodafone announced New Zealand’s first 4G network last month, the company didn’t announce larger data caps allowing customers to make full use of faster downloads.

In the short-term, this may not matter. Early adopters put up with less than ideal conditions – many see this as the price they pay to get access to new technology.

Long term it will matter. Telecom will launch a competing 4G network before the end of the year and 2degrees will no doubt follow. The could be another market entrant.

Either way, data is one area where competitors can differentiate products.

Make no mistake, data use will increase. According to numbers from this year’s Mobile World Congress, mobile devices exchanged 0.9 exabytes per month in 2012. An exabyte is a billion gigabytes.

Last year more mobile data moved through the airwaves than in all human history.

Mobile data traffic is growing at a compound rate of 66%. By 2017 wireless networks will move 11.2 exabytes.

The fastest growing sector will be machine to machine (M2M) communication which is growing at a compound rate of 89%.

Korean telcos: Beware the curse of 4G Internet

Are 4G networks cursed?

New Zealand’s telecommunications companies planning to bid for the 700Mhz spectrum should listen to what their South Korean counterparts have to say about 4G mobile.

Korea’s top carriers warn that although the rollout of faster mobile networks has been good for consumers, they struggle to make money.

A report in Independent.ie says:

South Korea is often held up by European governments as the model they would most like to replicate, with superfast networks enabling millions of people to shop online, communicate and become more productive.

Yet the report goes on to say competition means SK Telecom Co Ltd and KT Corp have to fight for every customer. This means heavy marketing spends, handset subsidies and continually offering more for less.

The story says 30% of the 50 million South Koreans now use fast networks and while Korean customers spend more – an extra US$13 each on average – the money doesn’t cover the huge investment poured into the 4G networks.

 

Don’t expect NZ digital spectrum windfall

Britain’s 4G spectrum auction raised a third less than expected. UK telecommunications companies paid £2.3 billion to snap up the extra bandwidth needed to run next generation mobile data networks, that’s £1.2 billion less than the amount penciled-in by the government.

What does this mean for New Zealand’s spectrum sale which will probably take place later this year?

Previously there’s been speculation an open auction of the 700MHz band could raise $200 million. That figure  may look ambitious now.  

Vodafone and Telecom NZ are both experimenting with 4G services and are likely to bid for the new spectrum. 2Degrees could also take part and smaller players have bid for spectrum in earlier auctions.

The 700Mhz band is a sweet spot for mobile broadband – at those frequencies mobile signals do a better job of reaching through buildings in densely populated areas like central business districts.

As a rule of thumb, the lower the frequency, the higher the value of spectrum to carriers.

There’s also a Māori claim for spectrum which many expect could be used by iwi as a bargaining counter to wrest back some control of 2degrees – although that is not the only course of action open to Māori.

You could argue New Zealand’s carriers paid too much for 3G spectrum in 2001, it’ll be interesting to see how they act this time. While no-one wants to be locked out of 4G, the carriers will be just as wary of  overbidding.