TelstraClear gets new mobile buddy in Telecom
New Zealand is to get a new mobile phone provider, with the announcement today of an agreement between Telecom New Zealand and TelstraClear.
TelstraClear's new mobile venture will piggyback on Telecom's network and is expected to launch later this year. New Zealand's new entrant will differentiate itself by means of branded handsets, bundled services and varied price plans, the company said.
TelstraClear, which already sells fixed-line telecoms and broadband connectivity, will offer "triple play" services under a single billing system.
The telco's move comes after its previous, seven-year agreement with Vodafone was brought to an end this June, after TelstraClear rejected what was considered to be a restrictive MVNO (mobile virtual network operator) agreement.
Speaking last week at Telstra's annual results day, CEO Sol Trujillo said that New Zealand was one of the areas the telco hoped to improve its performance.
"We are obviously working at taking some of the costs out of the business, reducing some of the redundancy on perhaps administrative staff support, some other things. We are looking at turbocharging some of the marketing initiatives that they have within the local market," he said.
According to analysts IDC, New Zealand has already reached 101 percent penetration, despite the presence of just two operators in the market.
Darian Bird, telecommunications analyst at IDC, said that TelstraClear will likely not be a boon to the company's bottom line but it will need to offer mobile connectivity in its portfolio to remain competitive.
"From TelstraClear's point of view, [the deal] makes a lot of sense -- to get into the corporate and government space, they need a mobile element. They may not be looking to make a lot of money but it's a means of getting a foot in the door," he told ZDNet Australia.
According to Bird, one potential issue could be the difference in networks between TelstraClear's old partner, Vodafone, and new bedfellow Telecom. While Vodafone uses W-CDMA -- one variant of 3G -- Telecom network based on the same technology is expected to go into operation later this year or in 2008, meaning existing users will need to change their handsets and data cards to be able to use Telecom.