Key Points:

Renewal rights in the 800MHz and 900MHz radio spectrum bands are being offered.

Communications Minister David Cunliffe said part of this spectrum would be made available for investment by new entrants to the market.

In April, Cabinet had agreed that a 7.5MHz pair of the spectrum that expired in 2011 or 2012 in each band should not be offered for renewal but should be offered by auction.

Cabinet had also agreed that if Telecom or Vodafone sold at least a 5MHz pair of 800 MHz or 900 MHz spectrum on the secondary market to a new market entrant in these bands within six months of the renewal offer being made, then they would be offered the remainder of the 7.5MHz otherwise intended for auction.

Mr Cunliffe said there was significant interest in these bands as these were considered to be more economic for providing coverage in lower population density areas.

The renewal offers were sent to the current right holders, Telecom and Vodafone, on November 9.

"The offer price is $3.8 million plus GST per MHz pair for a term of 20 years which, as directed by Cabinet, approximates the market value of the rights and produces a fair financial return to the Crown," Mr Cunliffe said.

The offer also included usage criteria requiring the spectrum to be used within five years to encourage investment and ensure that the spectrum is not hoarded, Mr Cunliffe said.

If any renewal offer was rejected by the existing right holder, then the relevant rights would be resold by auction.

- NZPA