2degrees has named its primary technology partner for its 5G mobile network upgrade: Ericsson.
The Swedish company will provide both the radio access network or "edge" (celltower components) and core (brains) of 2degrees' 5G network - which will go live in parts of Auckland and Wellington at an un-named time later this year.
It replaces the incumbent Huawei, which was effectively sidelined from all 5G upgrade business in New Zealand after the GCSB barred the Chinese company from Spark's mobile network upgrade (and the intelligence agency has only hardened its line since).
"Replaces" is the operative word. 2degrees chief technology officer Martin Sharrock says the core network is currently being upgraded to Ericsson kit. And as the cell sites are upgraded to 5G, Huawei gear will be ripped out, so Ericsson will be providing both 5G and 4G (to use 5G, you need a 5G-compatible phone). The exercise will double 2degrees' 4G capacity, Sharrock says.
Some 100 2degrees cell sites around Auckland and the capital will be upgraded to 5G by year's end. Some 700 sites (of a total 1800) will be upgraded during the first wave, on an open-ended timetable. Until the entire upgrade is complete, 2degrees will continue to have a service relationship with Huawei - which recently pivoted its local business to focus on two new areas: corporate video conferencing and home solar installs.
Spark and Vodafone's partners
Spark replaced Huawei with a mix of Nokia Networks and Samsung equipment for the edge of its network, while retaining Ericsson and US company Cisco for its core for its 5G mobile upgrade. This debuted in July last year in parts of Palmerston North, and now includes parts of central Auckland, New Plymouth, Te Awamutu, Christchurch, Dunedin and six South Island small towns - Westport, Clyde, Alexandra, Twizel, Tekapo and Hokitika.
Vodafone NZ, retained 4G incumbent Nokia Networks for its 5G upgrade, which began in December 2019 in parts of Auckland, Wellington, Christchurch and Queenstown - and recently expanded to parts of Tauranga.
Spark and Vodafone have both been pushing 4G and 5G fixed-wireless as a landline substitute, and now have some 221,000 customers between them on the technology, according to a recent Commerce Commission report. 2degrees is expected to ramp up its fixed-wireless (or "wireless broadband") push with its 5G upgrade. The technology appeals to all of the mobile players because it cuts Chorus and its clip of the ticket out of the loop (Chorus argues that fibre delivers better performance - an argument backed, in part, by the ComCom's latest benchmarking).
2degrees chief executive said his company chose Ericsson, in part, because it was "the market leader in 5G" in terms of deals signed with telcos.
The Swedish company has inked more than 135 5G contracts, with customers including AT&T, Verizon and T-Mobile in the US, BT and 02 in the UK and Telstra and Optus in Australia.
No price-tag was put on the contract. But because it won't be able to simply upgrade already in-place Huawei gear, 2degrees' 5G upgrade will cost more than its peers.
Bur despite the most obvious source of 5G upgrade funding - vendor financing from Huawei - being blocked, Aue told the Herald that 2degrees' 5G upgrade was "fully-funded", whether or not a possible NZX or ASX listing goes ahead.
There were no further updates on the potential IPO today.
2degrees' parent, Seattle-based, Toronto-listed Trilogy International Partners, currently owns two telcos: its profitable NZ venture and struggling Bolivian operator NeuvaTel. The debt-laden Trilogy recently confirmed a downunder listing was on the cards for 2degrees, while it was open to an investment partner or trade sale for NeuvaTel.