COMMENT:

Why is Spark boss Simon Moutter campaigning so hard for 5G mobile networks to be live in time for the America's Cup in 2021? And for his own company's 5G (fifth-generation) mobile network to launch in July 1, 2020 - barely 18 months away.

Listening to Moutter talk, you'd think overseas visitors will laugh at us if there's no 5G by Cup time, and our economy in general will founder.

I'm exaggerating for effect, but only a little.

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New Vodafone NZ boss Jason Paris has been measured on his company's next mobile network upgrade, saying his company loves the technology but sees no business case for it yet (logical, since Apple, Samsung and other 5G phone makers won't have 5G-compatible handsets for a couple of years, at least at anything like mass-market pricing).

Simon, by contrast, has 5G fever.

And he'll be mopping his brow further now that Australia's first 5G spectrum has just wrapped up (netting a very tidy sum; keep reading).

Moutter bemoans that our Government has yet to decide which bandwidth it will sell, let alone set a date for an auction. He says it will have to be in the first half of next year for Spark to meet its (arbitrary) July 1, 2020 5G launch deadline.

Why the rush?

Moutter says 5G will have benefits for some areas of the fast-growing Internet of Things, or machines talking to machines over the internet. And he has a point there.

He also makes the meat-and-potatoes argument that the amount of mobile data we use is roughly doubling each year.

"Data volumes will start to exceed 4G's sensible limits around 2020/2021," he says.

Again, valid.

And he says that 5G will help Team NZ better prepare for the Cup as it uses a pre-launch mini 5G network to stream big chunks of data to shore in real-time.

I guess. At a pinch.

But, beneath the surface, there's also cunning commercial strategy at play. Simon wants to put Telecom back together again, or at least put his company in control of every element of your broadband connection - or regain vertical integration, in industry-speak.

In 2011, the government cleaved Telecom in two, creating network operator/wholesaler Chorus and the retailer today known as Spark.

That means when you pay your landline bill to Spark, around half the money goes to network operator Chorus.

Over the past couple of years, Spark has shifted $60m+ a year from Chorus' pocket to its own by literally cutting the wholesaler out of the loop with its fixed-wireless service - which uses Spark's 4G mobile network to deliver broadband into a home. That means Spark keeps 100 per cent of the bill.

But there's a problem: Moutter says the total addressable market for fixed wireless over 4G is only about 200,000, and in practical, easily saleable terms not much above its current 125,000 or so customers.

But with the more generous bandwidth of 5G, it will be all on again. Moutter has even said 5G should allow Spark to offer unlimited data bundles for fixed-wireless customers. That, coupled with the fact that 5G has far less of a latency (or lag) issue with two-way data connections than 4G, and 5G will look like a pretty robust, cheaper alternative to UFB fibre for hundreds of thousands of households. Moutter want a piece of that high-yield action, with Chorus watching jealously from the sidelines (if all goes to his plan) and he wants it ASAP.

Meanwhile, across the Tasman, things have been progressing apace.

Three weeks of bidding for 3.6GHz frequency saw Telstra pay A$387m for 143 lots, a joint venture between Vodafone Australia and its merger partner TPG buy 131 lots for A$263m, Optus pay A$185m for 47 and UK-based telco services provider Dense Air pay A$29m for 18 lots.

All up, the Aussie government raised A$834 ($872m) from its initial 5G spectrum auction (more spectrum is expected to be made available).

On our side of the ditch, Communications Minister Kris Faafoi won't give any details at this point, but says everything will be sorted in time for Spark, Vodafone NZ and 2degrees to start 5G mobile network upgrades in 2020.

Like other governments around the world, ours has to decide whether to have a free-for-all, which was nice for Crown coffers when 4G spectrum was auctioned in 2016, when Spark ($149m), Vodafone NZ ($55m) and 2degrees ($44m) forked over a total $261m. Or, whether it imposes some kind of cap, such as the so-called "competition controls" that the Aussie government imposed on the big players for its 5G auction just closed, which limited the amount of spectrum the big players could buy in the key Sydney and Melbourne markets.

It's swings and slides. An unrestricted bidding war would bring in more money for the Crown, but also leave telcos with less money to actually build 5G networks, leading to slower rollout progress - and with more costs that eventually get landed on consumers. And as with the 3G and 4G auctions, iwi claims are likely to complicate the picture.

Worldwide, the general trend has been for governments to err on the side of progress over short-term gain, with 5G reserves usually set at reasonably modest levels next to the 4G and (especially) 3G frenzies.

Moutter may be impatient. But from where Faafoi stands, there's no pressure to rush his decision.