Just as Spark sees a way around the GCSB's Huawei ban, another obstacle is emerging in its goal to launch a 5G mobile network by July 1, 2020 - a Treaty claim on spectrum that seems far from resolved.

Last week, chief executive Simon Moutter told analysts that his company could hit that date, on time and on budget, by working with other technology suppliers, including US company Cisco and Sweden's Ericsson.

But the Spark boss also also flagged another concern at the company's interim results briefing: the government needed to get a wriggle on and outline terms and dates for the 5G spectrum auction that must take place before his company (and Vodafone and 2degrees) can upgrade their 4G networks to newer, faster fifth generation or 5G technology.

Moutter said that for Spark to be sure of hitting its timetable for 5G, the government needed to confirm auction details as soon as possible; ideally, he wanted to see an auction by June.


He pointed out that in Australia, a 5G spectrum auction was done and dusted last year. Optus has the first stages of its 5G upgrade already underway. The Spark boss says New Zealand, and its economy, is in danger of falling behind.

But the news for the telco was decidedly mixed this week.

"The first allocation of 5G spectrum will be the 3.5 GHz band, with national rights to this portion of the spectrum expected to be auctioned early in 2020," Communications Minister Kris Faafoi said on Thursday.

"We are on track and keeping pace with other countries: with the spectrum being progressively allocated, companies can start rolling out 5G from 2020."

A quick history of mobile networks
• First-generation (1G) mobile networks: support voice calls only
• 2G: Adds support for text messaging
• 3G: Web browsing and email capability added
• 4G: Boosted bandwidth to support apps, high-def streaming video
• 5G: Promises fibre-like speed, little of the lag associated with earlier mobile networks switch two-way data connections, much enhanced support for the "Internet of Things" or machines talking to each other over the internet, and many more users per celltower, allowing real and cheaper unlimited mobile data plans

That was behind Spark's timetable, but at least things were in train, but then Faafoi added: "While spectrum allocations occur, we will concurrently be working with Māori to address the radio spectrum-related Treaty of Waitangi issues. Until this work has been completed, we will not be able to provide details of the 3.5 GHz spectrum that will be available for auction."

A spokeswoman for Faafoi's office said a spectrum claim - WAI 2224 - has been lodged with the Waitangi Tribunal but has yet to be formally considered.

In an earlier claim - WAI 776 - the Tribunal agreed, in a majority decision, that Māori had a right to fair and equitable access to radio spectrum. That led, 19 years ago, to discounted 3G spectrum being allocated to the pan-iwi Te Huarahi Tika Trust whose commercial arm, Hautaki Ltd traded the spectrum for a minority stake in the company that became 2degrees.


WAI 776 was lodged by Rangiaho Everton, who is now deceased. Her son, Graeme Everton, says WAI 776 ultimately proved a failure. The former Telecom radio spectrum technician turned entrepreneur says what he describes as a poor framework let to a "failed outcome" as Hautaki could not afford to participate in rights issues by 2degrees' majority shareholder, US company Trilogy International Partners and its stake was diluted.

Everton brought a new claim, the yet-to-be-heard WAI 2224, which is now long-standing. A bid for an urgent hearing was declined back in 2013 ahead of the 4G spectrum auction - which brought in $261m for the government between Spark (which bid a total $149m to secure various spectrum blocks), Vodafone ($66m) and 2degrees ($44m).

Bidders were required to pay a $5m deposit for the 4G auction, on top of millions more in legal and regulatory costs. Everton, who is involved with a startup that wants to bring the IoT (Internet of Things) to rural areas, says it should be easier for smaller players to participate.

Everton says he wants a more enduring solution that will involve telcos working closely with the government to use spectrum to help foster Maori business and improve rural connectivity - which he sees as neglected in the major telco's current plans.

Asked if this would involve an acknowledgement that Maori own 5G spectrum, a direct allocation of spectrum being allocated to WAI 2224 claimants or a solution that emerges from negotiation, he responds "the third one."

Everton says the next step will be for Faafoi to approach him and other WAI 2224 claimants to agree on a framework for negotiations.


Told of Moutter's push to get 5G auction details finalised by June, Everton's blunt response is "Holy crap!".

As things stand, he does not see that happening. Everton says he wants Spark, Vodafone and 2degrees to approach him. He says Spark and Vodafone "have not recognised or acknowledged Maori rights to spectrum," which he sees as a precursor to serious discussions.

Moutter's goals are self-imposed, Everton said, adding: "These discussions shouldn't be rushed. It's more important to get it right."

Everton says Moutter is "only interested in connecting rich boats in Auckland" - a reference to the Spark boss's ambition to have 5G up and running in time for the 2021 America's Cup. "I've never once heard them talk about connecting farmers," he says.

Spark, Vodafone and 2degrees formed a joint venture that won the tender for the second phase of the Rural Broadband Initiative, a project that has seen more than $300m spent on bringing faster wireless internet and mobile (which will include 5G) to rural area, but Everton says rural connectivity is still "shocking."

For Spark, spokesman Andrew Pirie takes a diplomatic line, saying, "If the principal risk to timing is resolution of Treaty of Waitangi issues, then we encourage the government to do all it can to resolve these issues with Maori as quickly as possible. While we acknowledge the rights of Maori as tangata whenua, Spark does not take a view on how these issues might be resolved - that is for the Crown and Maori to resolve the spirit of partnership."


Pirie adds, "While we were hoping this auction might have taken place later this year, we remain committed to launching commercial 5G services by mid-2020 at the latest and rolling out 5G network capabilities as soon as the necessary spectrum becomes available. Many countries have already completed their spectrum auctions."

5G KoolAid

His rivals aren't in such a hurry. 2degrees chief executive Stewart Sherriff says, "It's one thing to drink the Kool-aid at Mobile World Congress in Barcelona [a major trade show that's just wrapped up in Europe], but on the ground back here in New Zealand, 2degrees is focused on making sure 5G is affordable, done properly and at the right time to really make a difference for businesses and consumers."

Sherriff says New Zealand "should avoid a repeat of the move to 3G, when the industry built networks too soon and devices took a long time to arrive." Although Samsung has just released the Galaxy S10, a model that supports 5G, Apple and others have yet to offer handsets that can be used with 5G networks, and may not do so until next year - and it will take longer for 5G support to filter down into mid- and low-price models.

MORE: The real reason Spark boss Simon Moutter loves 5G

Vodafone NZ boss Jason Paris is also talking a measured approach to timing.

"We're going to embrace 5G like it's our best friend. We're not shy or scared of it," he says, noting a local trial, and a 90 million euro Vodafone 5G pilot in Europe," he says.


But he adds, "if we released 5G tomorrow in New Zealand, I don't think you'd be willing to pay $5 or $10 more for it. As an industry, we have to get out of this 'invest more and get less' mode.

"So what I want to see before we accelerate 5G is the customer use cases that justify us accelerating it and bringing it forward."