To: SKIP PAUL who wrote (53043 ) 12/7/1999 11:29:00 PM From: Ruffian Read Replies (1) | Respond to of 152472
NZ Telecom Close To Finalizing CDMA Technology Vendor WELLINGTON -- Telecom Corp. of New Zealand (NZT) expects to complete negotiations for the provision of its new, second generation mobile telephone technology before Christmas, executives said Wednesday. Lucent Technologies Inc. (LU) and Nortel Networks (NT) are the two remaining contenders to provide the technology for the CDMA (code division multiple access) digital network Telecom announced it was adopting in August. Lorraine Witten, general manager Mobility, told a media briefing that the company is on target for rollout of the technology in the first quarter of 2001 as originally announced. Telecom has earmarked capital expenditure of NZ$180 million to NZ$220 million spread over the current financial year ending June 30, 2000 and the following financial year for its CDMA rollout. Slightly more than half of this sum will be with the contracted provider, she said. The rest of the capital spending will be labor and development work within Telecom. Witten said the company selected CDMA because it provides an easy migration to third generation mobile technologies which are likely to become commercial in four years to five years. As well it provides improved call quality, potentially trebles network capacity without the need to add cellular sites, and offers faster data transmission speeds, she said. Data speed will be up to 144 kilobits a second, compared to the 19.2 kilobits a second available on Telecom's existing digital network. The availability of capacity means the ongoing capital spending requirement for the mobile network will reduced to NZ$20 million to NZ$30 million a year from more than NZ$100 million currently Witten said the CDMA technology would be offered over the same "footprint" or coverage area as Telecom's existing analog service. The analog service as well as the digital service will continue to be offered but the company expects the additional features of CDMA will encourage customers to migrate. Mobile telephone networks operate on particular radio frequencies or spectrum. Network operators own certain amounts of spectrum and on occasion buy more spectrum from the government. A further auction of additional spectrum is due in January, offering frequencies around 2,000 megahertz. Existing technology works at around 800 megahertz. Witten said to offer CDMA alongside the existing Telecom mobile services will require some "complex frequency planning". Group General Manager Networks David Bedford told reporters "Telecom will have an interest in the outcome of the (spectrum) tender" but said the company could still get by with its existing spectrum if prices proves too expensive. He said, based on overseas experience, a number of mobile phone manufacturers will produce phones with features based on higher spectrum, so the advantage of getting spectrum in the auction is that it could "utilize appliances coming on first". Bedford said it may be that by offering the high spectrum now before appliances are ready the government may get a lower price, but that argument could just as easily go the other way, he added. Witten said CDMA provides Telecom with a gateway to Wireless Application Protocol (WAP) which is a standard for sending internet data to mobile phones. She said Telecom would offer WAP technology before then through its existing AirData service. The technology requires WAP-enabled mobile phones. -By Tracy Withers; 64 4 801 8960; tracy.withers@dowjones.com