The CEO of New Zealand's largest telecommunications company Telecom New Zealand has said it will wait until the country's auction of spectrum in the 700MHz band before launching any long-term evolution (LTE) mobile broadband products.
Similar to Australia's upcoming auction of the 700MHz spectrum at the end of 2012, the New Zealand minister of telecommunications has indicated that 112MHz of the 700MHz band will be up for auction in 2012, when New Zealand completes its digital TV roll-out. The 700MHz spectrum is viewed as "waterfront" spectrum for mobile broadband technology such as LTE.
Unlike Telstra in Australia, which is utilising spectrum in the 1800MHz band in the interim period, Telecom NZ will wait until that spectrum is auctioned off before introducing any LTE services, CEO Paul Reynolds told a results conference in Auckland today.
"Over the next 12 to 24 months, you're going to see the mobile industry, the issues, continue to be dominated by data; 3G data. It's pretty certain we'll go through yet another technology upgrade. Initially as a partner to 3G technology. LTE is coming; of course we're planning for that," he said.
"The hard detail is knowing the detail of the government's plans and how we participate in the allocation process, and it will be beyond your period of 24 months before there's any substantial impact in the New Zealand market."
Reynolds added that the introduction of LTE was just part of the regular "massive technology changes" that the telecommunications industry goes through every two to three years, and Telecom New Zealand was on top of it and ready to go with a roll-out when the time comes.
The telco today reported an increase in net earnings of 1.6 per cent to NZ$386 million for the financial year ending 30 June 2011, up from NZ$380 million in the previous financial year. Adjusted earnings before interest, taxation, depreciation and amortisation (EBITDA) were NZ$1.8 billion, up 2.1 per cent.
In a year that Reynolds said the telco aimed to "create a leaner and more effective operating model" to deliver cost savings, Telecom NZ sold off the consumer division of AAPT on 30 September. The sale of the business to Australian internet service provider (ISP) iiNet delivered NZ$139 million to the company. As a result, revenue for AAPT dropped significantly from AU$882 million to AU$693 million, and the company shed some 31.9 per cent of its full-time workforce.
Reynolds said that following the sale, AAPT worked to reduce some of the common costs associated with the consumer division that carried over into other areas of AAPT's enterprise and wholesale IP data services business. Reynolds said that the business had performed well since the sale.
"The half has seen a strong sales performance in Business & Wholesale, particularly in data and internet-focused sales. In addition, AAPT was the first carrier to achieve [National Broadband Network] certification," he said.
The last financial year also saw Telecom New Zealand's wholesale fixed-line arm Chorus in a bid to build 70 per cent of New Zealand's Ultra-Fast Broadband (UFB) network with Vodafone. Reynolds said that the work to demerge Chorus as part of the agreement was on track to being completed by the end of 2011, and more information will be made available to shareholders shortly.
"We are well prepared for the fibre future and the imminent changes to industry structure," he said.
Similar to its Australian counterparts, Telecom New Zealand saw a decline in prepaid mobile subscribers, with a total decrease in mobile customers of 95,000 in the year. Although Reynolds said that this was mostly made up of low-value CDMA customers that are going inactive as the network shuts down in July 2012.