KEY POINTS:
It's hard not to be sceptical that the country's long-promised third mobile phone network will ever arrive. We've been hearing about it since 2001, yet to date we're still stuck with a choice between the Telecom and Vodafone networks.
The lack of real competition means that for years
New Zealand has ranked well up the international league table when it comes to the cost of making mobile calls. The latest comparison shows a New Zealand subscriber on a medium-priced calling plan is paying about 145 per cent of the OECD average.
You might almost say that rather than make broadband internet his priority, the new Minister of ICT, Steven Joyce, should do something about fixing the mobile market.
Certainly that's what Tex Edwards would say. Edwards, for several years the manic frontman for Econet Wireless, the company that announced in 2001 that it hoped to have a network in place by the following year, has been endlessly battering away at competitive and regulatory obstacles with little to show for his efforts.
These days the wannabe third network operator is known as NZ Communications, there is an assortment of new shareholders and Edwards is playing a less public role. And, in fact, the company can point to significant tangible evidence that it means business.
For example, it has about 230 cell sites in Auckland, Wellington and Christchurch. It has network switches in the three centres. It has as many employees as cell sites, 30 of whom will staff a customer call centre. It has a clutch of senior managers with international experience at running phone companies. It has a signal, which your cellphone will detect if you send it off on a search for networks.
It even has a date - perhaps even in the first half of the year - by when it hopes to begin providing a service. Don't ask when exactly, though - the company has seen enough deadlines come and go for it to have wised-up and decided to keep that information to itself.
While some of the obstacles to launching have been dismantled, others remain. On the plus side, NZ Comms has a roaming agreement with Vodafone, which will provide the newcomer's subscribers with coverage in areas its network doesn't reach.
It has also secured the radio spectrum it needs to provide service through deals with Vodafone and Telecom. And the Commerce Commission has laid out terms under which NZ Comms can apply for access to the existing network providers' cell towers, enabling it to install its antennas without duplicating facilities.
If pressed, Edwards would say that this all amounted to excellent progress - but through gritted teeth.
The fact is, much remains to be done. NZ Comms has barely a quarter of the cell sites that it aims to install. Where it is erecting its own, it has resource consent frustrations, and where co-location is the way to go, commercial terms still have to be negotiated with cell tower owners.
With masterly understatement, NZ Comms chairman and former All Black Bill Osborne says Vodafone and Telecom aren't anxious to have another network operator enter the picture. They have ways of keeping the market to themselves.
Making co-location hard is one. But the ace up their sleeve is the fee charged when a rival's subscriber calls a number on their network - the so-called mobile termination rate.
The present rate, set by the Commerce Commission, is about 17 cents a call, but the tortuous process of determining a new figure is under way, with a late November deadline for reporting to the minister.
It's in the interest of Vodafone and Telecom for the figure to be as high as possible since, with the mobile market divided between them, the sum they pay each other roughly cancels out. A newcomer, however, with far fewer customers, would be paying much more in termination rates than it would be receiving.
NZ Comms argues that the actual cost of call termination is so tiny the charge should be scrapped, with the network on which a call originated pocketing all the revenue - known as bill and keep. The Telecommunications Users Association backs the phasing in of such a regime.
Even if that's what the commission eventually recommends, NZ Comms will have to launch in a more costly interim environment.
In the face of so many obstacles, why persist with building a network? Because, says Osborne - displaying his penchant for understatement once more - the business case remains sound.
He might have said a mobile network is a licence to print money. Telecom Mobile, for instance, last year made $900 million, including termination charges. Vodafone made $1.5 billion and paid its European owner a $700 million dividend.
Who wouldn't want a share of that?
Eight years on
September 2001: Econet Wireless reveals plans for new mobile network, in operation by "mid to late next year".
Now: NZ Communications, Econet's successor, isn't saying when it hopes to be operating, but it could be this year.
Anthony Doesburg is an Auckland-based technology journalist.
