Telecom has outbid Vodafone, becoming the successful bidder in the government's "digital dividend" auction of the final 2x5 MHz lot of 700 MHz radio spectrum.
Telecom bid $83 million for this final lot, in addition to the total of $66 million for three lots in the initial auction round.
The purchase of this fourth 2x5 MHz lot is conditional upon approval from the Commerce Commission.
Telecom CEO Simon Moutter said, "This fourth lot will provide significant benefits to customers in terms of the potential speed and capacity of Telecom's 4G mobile network.
"The more of this 700 MHz spectrum a carrier has, the faster the speeds it will be capable of offering and the more data it can carry. So this fourth lot puts Telecom in the best position in the market to deliver a very high-performance 4G mobile network for New Zealand, including in less densely populated areas."
The 700 MHz spectrum band, previously used for analogue broadcast services, is expected to allow mobile operators to provide 4G mobile broadband services — already being built in New Zealand's main cities — much more extensively in New Zealand, including in less densely populated areas.
In the first round of the auction, announced on 30 October 2013, Telecom and Vodafone each successfully bid for 2x15 MHz (three lots), while 2Degrees successfully bid for 2x10 MHz (two lots) leaving a single 2x5 MHz lot unsold from the available nine lots.
The auction for this lot has proceeded over recent weeks at $1 million increments for each bidding interval, starting from the $22 million reserve price. The win of this lot will mean Telecom will possess 40 MHz of the spectrum, leaving Vodafone with 30 MHz and 2Degrees with 20 MHz.
A final assignment process, during which each successful bidder will bid for a location within the spectrum band, is still to be held.
Telecom launched 4G services, utilising existing spectrum in the 1800 MHz range, in Auckland, Wellington and Christchurch in November 2013 and extended its network in December to several popular holiday destinations.
"We've now got a leading data network integrating 3G, 4G, Wi-Fi, ADSL, VDSL and fibre backed up by a nationwide optical transport network that is underpinning anytime, anywhere connectivity for customers. With the addition of this 700 MHz spectrum, we will be in a very strong position to support New Zealand's data, mobility and digital services future," Moutter added.
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