New Zealand Telecom To Step Up 3G Mobile Cover, Takes On Vodafone"

WELLINGTON -(Dow Jones)- Telecom Corp. (NZT) Friday said it will extend the rollout of its high speed third generation mobile phone service network to New Zealand's main towns and cities by Christmas, taking on rival Vodafone Group PLC. (VOD.LN), which will launch its 3G services next month.

Kevin Kenrick, general manager of the company's mobile division, Telecom Mobile, said customer uptake is expected to be strong.

"If the response in the provinces and towns is anything like we've had from the main centers, we will see strong uptake from New Zealanders enjoying the benefits of Mobile Broadband by Christmas 2005," he said.

Telecom's 3G services were launched in November last year on a limited scale, targeting mainly the business market. Kenrick said that as part of the move to extend coverage, Telecom will also expand existing operations in Auckland, Wellington and Christchurch.

"In many cases this will effectively double the coverage in the main centers while at the same time supporting our nationwide rollout to main towns and cities," he said.

Telecom is spending NZ$40 million in Evolution Data Optimized, or EV-DO, technology for its 3G services. EV-DO is a competing technology to the wide-band code division multiple access, or W-CDMA, network that Vodafone is currently building.

Vodafone is the No. 1 mobile phone service provider in New Zealand with a market share of just over 55%. Telecom, which holds the balance of the market, is the country's biggest fixed-line phone carrier..

"After Christmas we will continue to expand and enhance our coverage in these towns and cities to meet growing customer demands," Kenrick said.

Telecom's decision to expand to provincial towns and cities - a widely expected move - probably means the company is confident enough about the 3G technology option to progress it through the long term.

Telecom has said consistently that it will keep its options open on the potential use of W=CDMA if that technology proved to be the better driver of growth in the 3G mobile market.

Vodafone, which is building a nationwide network at a cost of over NZ$200 million, will go head on with Telecom with several products slated for launch over coming months.

Telecom's Kenrick said the extension of the company's 3G mobile network would be funded using existing capital expenditure allocated for the mobile unit in the next fiscal year ending June 30, 2006.

-By Shri Navaratnam, Dow Jones Newswires; 64-4-471-5990; shri.navaratnam@dowjones.com

(END) Dow Jones Newswires"

Posted to the site on 10th June 2005