NZ's 3rd mobile network launched: 2degrees

By Chris Daniels

New Zealand's third mobile phone network has been given a name and an expected date of birth, but those wanting more details have been told they must wait.

It's called 2degrees and is the brand that NZ Communications revealed at a media launch in Auckland this morning. With more than 300 cell sites installed and $250 million spent, the company says its network will be going live sometime in August.

The network will be initially only be available in Auckland, Wellington and Christchurch. However, a roaming agreement with Vodafone means 2degrees customer will be able to make and receive calls throughout the rest of the county.

The 022 prefix will be available to its customers.

Today's launch comes two days before market heavyweight Telecom has a marketing launch for its new 3G "XT" network. Vodafone is continuing to expand its own 3G network.

Company chief executive Mike Reynolds said most markets in the world had at least three network operators and there was no other comparable country that "has to suffer such poor value in the mobile market."

Questions about handsets, download speeds and technical details were batted away by Reynolds, who said that the competitive tensions would not be about the technology, but customer service.

"Are New Zealanders getting value for money in mobile?" asked Reynolds. "We think the answer is no."

Value was not just about prices but about many of the other things customers had to deal with.

Asked if 2degrees prices would be lower, Reynolds said it was "over-simplifying the issue to say we'll be cheaper."

"Given the level of prices in the market today, it's not a real stretch to say prices will go down."

All three New Zealand mobile networks will be using essentially the same technology, said Reynolds. There was "no real sustainable competitive advantage from a tech perspective".

Such an advantage came from who offered the best value and service - "how do you treat your customers? " he asked.
"We won't talk download speeds, we're all capable of the same speeds."

"Our research tells us that Kiwis are tired of being locked into lengthy contracts and being stung with high prices to call friends on competing networks. They want to take back control of how much they spend and who they call," said Reynolds.

In February, NZ Communications was said to be a quarter of the way through its network build and would rely on a roaming agreement with Vodafone for areas where it had yet to build coverage.

It is relying on a Commerce Commission investigation, due to be completed late this year, on the costs mobile companies charge each other for receiving a call from a rival network - known as mobile termination rates. Vodafone and Telecom have an agreement with the Government to gradually reduce the termination rate per minute down to 14c and 12c.

2degrees has been built around the radio frequency allocations to Maori, has been aiming for years to compete with Vodafone and Telecom.
New Zealand Communications is owned by Hong Kong-based General Enterprise Management, Communication Venture Partners of London and Trilogy International Partners, with a 20 per cent Maori interest through the Hauraki Trust.

Telecommunications Users Association of New Zealand chief Ernie Newman said he was impressed with the new player after visiting the company and witnessing its push to establish its network.

New Zealand Communications had been "written off" by the industry after slow progress but it proved to have the energy to get the network up and running.

"They have a lot of obstacles in front of them, but I would predict that the day they announce their launch date the high prices New Zealanders are paying for mobile phone services will begin to fall," Newman said.


- A customer wanting to shift to 2degrees would just need to install a new SIM card into their handset.

- The company says cell phone numbers can stay the same, or customers can pick from "10 million 022 numbers".

- GSM handsets will work on the network. 2degrees' network is 2G and 3G and capable.

- No details around new handsets, contracts, prices or network speeds have been revealed. 2degrees says giving out too many details will allow rivals to devise "counter-offers" before the August launch date.

NZ Communications' 2degrees website

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