Hooray….Good Move Nokia!!!
Posted by sashots on June 29, 2006
In following the saga between Telecom, the NZ Govt, and the other Players in the NZ Telco market (i.e. Vodafone, Telstraclear, etc), I’ve often been reminded to little Oliver Twist and his request for an additional serving of gruel, i.e.
“Please sir, can I have some more”
When other companies have requested access to the almighty Telecom’s network, they’ve either snubbed them, thrown them a scrap at some ridiculous price, or FINALLY, they get told to share by the government. Well, thanks to a fantastic move by Nokia, the tides may finally turn!! The article below explains this very well
Telecom under 3G pressure 29 June 2006
By ADRIAN BATHGATE
Telecom will be under serious pressure to build a new mobile network because of Nokia’s decision to stop making handsets for its CDMA technology, analysts say. Because Nokia accounted for 40 per cent of Telecom’s handset sales, pulling out of the CDMA market meant Telecom had no choice but to switch to the third generation (3G) WCDMA technology or face losing customers, analysts at Credit Suisse said. Credit Suisse also put the price tag on a WCDMA network at $800 million, at least $200 million higher than previous estimates. This led Credit Suisse to add another $500 million to Telecom’s capital expenditure bill for the next three years. Telecom has previously said it is considering building a WCDMA network and will decide by the end of the year. General manager Telecom mobile Kevin Bowler said yesterday Telecom was happy with its 027 network, which runs on CDMA, and there was no guarantee WCDMA was “the way of the future”. Analysts have agreed Telecom’s resurgence against Vodafone in the past few years has been largely because of the greater range and quality of phone it has been able to supply. Losing more than a third of that range from a Nokia pullout would place Telecom under serious pressure, Credit Suisse said. To reduce the $800 million price tag Telecom could come to an infrastructure-sharing arrangement for rural areas with rival Vodafone, Credit Suisse said. Less likely would be a shared network build with TelstraClear, which has said it wants a 3G network in New Zealand. Telecom’s financial outlook for the next two years has been downgraded by Credit Suisse as a result of an expected new network, alongside the effects of Government changes, with dividends predicted to fall by 14 per cent during the next two years. WCDMA – or UMTS as it also known – is the 3G technology employed by rival Vodafone. It is the dominant technology for 3G networks worldwide, and Telecom’s preference for CDMA has been struck a blow by the decision of Telstra and Hutchison to shut down their CDMA networks in Australia within the next few years. This left Telecom “in an increasingly difficult competitive landscape”, Credit Suisse said. Telecom is looking at dual-chipset phones that will work on CDMA and WCDMA networks so Telecom customers can use their phones in Australia from 2008.
I look forward to seeing the CEO of Telecom Grovelling in the mud!!
