Alcatel-Lucent to build Telecom NZ hybrid GSM/EV-DO network
I'm quite pleased with this story I wrote with Natalie Apostolou for Communications Day in Australia. It's just come out, and should get some attention in New Zealand too, despite being about telecommunications and technology. Update Telecom has confirmed the WCDMA/HSPA network. See my blog entry here for full release.
Telecom New Zealand is poised to award Alcatel-Lucent with a contract in excess of NZ$300-$400 million to build a GSM voice/EV-DO data 3G network. The official contract win is expected to be announced within ten days.
As foreshadowed by Telecom New Zealand executives in May, the carrier had been looking at a dual network 3G investment for some time and is understood to have considered detailed bids from Ericsson and China's ZTE in the RFP process. Industry sources have speculated however that the bid process was a "closed shop" with incumbent suppliers Alcatel-Lucent considered the only likely candidates.
CommsDay understands that a key requirement for the network build is compatibility with Lucent's Flexent hardware platform, and that the plan to go hybrid is still alive - GSM will be used for voice calls, and the existing CDMA2000 1xRTT Rev A protocol for data.
Alcatel-Lucent intends to use the capability it purchased from Nortel at the end of last year for the GSM network.
Telecom New Zealand is believed to have asked for an accelerated schedule for the GSM network deployment, and earlier reports say the CDMA part may in fact be turned off two years after it goes alive.
Ericsson is believed to have been dropped from the running by Telecom for cost reasons, but external relations manager Tom Clancy denies that the telco supplier is too expensive. "Our unique selling point is fairly clear actually - for a number of reasons, expertise, service, technology, we're the world leader for WCDMA/GSM deployments - as in we have the most commercial deployments in the world, which seems to refute the 'too expensive' claim actually," Clancy states.
Alcatel-Lucent's final network proposal is understood to have been the death-knell for TelstraClear's Unplugged 3G project in Tauranga, which was unexpectedly terminated in April. Sources claim that TelstraClear and Telecom were still in open discussions on the possibility of 3G network sharing but following TelstraClear's discovery of the scope of Telecom's 3G network strategy were compelled to pull out of the market and pursue a wholesale relationship instead. At the time TelstraClear publicly blamed Vodafone for the network closure claiming it had changed the terms of a national roaming agreement.
Telecom New Zealand was due to announce new pricing plans for international roaming today, but decided to postpone this until July. Sources claim that this was done to coincide with the GSM network announcement to give greater credibility to Telecom's roaming strategy. The incumbent is keen on getting a slice of the estimated NZ$200-300million inbound roaming market.
Meanwhile, the finalisation of Telecom New Zealand's 3G infrastructure investment also signals the expected withdrawal of the carrier's current commitment to the Hutchison 3G Australia relationship. Telecom New Zealand is obliged to inform the market in early June on whether it is going to tip in a further $300 million into the H3GA JV to uphold its original 19.9% shareholding. The remaining 80.1% stake is owned by Hutchison Telecommunications Australia.
At Telecom's Q3 results earlier in the month, CFO Marko Bogoievski said that while the decision had not be finalised, he didn't expect to retain that percentage level of investment. As reported by CommsDay at the time, it is widely anticipated that the carrier will withhold any further investment for its own infrastructure build out. "They do not need to retain a 19.9% stake in the company to have an agreement to use UMTS on both sides of the Tasman," one source close to the operators said. The most likely outcome will see Telecom's stake reduced to less than 10% with an agreement put in place for leveraging Hutchison's global handset buying power.
Update Peter Griffin has some further details on his New Zealand Herald blog. Seems Frederic Rose at Alcatel Lucent was here recently to seal the deal...
Tag(s):
alcatel
lucent
telecom
new zealand
vodafone
telstraclear
hutchison
australia
cdma
ev-do
gsm
umts
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Comment by nzbnw, on 29-MAY-2007 22:37
I'm assuming when 'GSM' is mentioned, you are referring to UMTS 850 MHz??
Following on from Grant17, congratulations on the scoop!!
nzbnw
Comment by freitasm, on 29-MAY-2007 22:46
It is important to distinguish between GSM and UMTS/WCDMA. They are distinct technologies...
Comment by Greg Hogan, on 30-MAY-2007 07:18
What a horrible prospect.
GSM, the voice and cr@ppy CDMA for data - good grief they couldn't have chosen worse tech except for maybe going back to analogue and cross-bars.!
Drop the lot and get HSDPA or EDGE ... but hey ..that's being too smart for the Telecom mandarins.
Comment by sbiddle, on 30-MAY-2007 07:47
"Drop the lot and get HSDPA or EDGE ... but hey ..that's being too smart for the Telecom mandarins."
Telecom will be going down the HSDPA path not GSM.. "GSM" still seems to be used as a generic term to describe a GSM/UMTS network. I would suspect that Telecom's network will be 100% UMTS/HSDPA and won't have any GSM fallback. NZ Communications/Econet on the other hand seem to be serious about deploying GSM because it's a lot cheaper.
Good on Telecom for finally making the move, it's just a shame they didn't have the spectrum 10 years ago to deploy GSM like they desperately wanted to do and were forced down the CDMA path as they had no other option.
Comment by Madmax77, on 30-MAY-2007 08:02
I don't believe that Telecom were forced down the CDMA path as you state, Telecom brought spectrum in both CDMA and GSM, however the MED stated they weren't allow to own both, so they had to sell one. Telecom made the choice to sell the GSM spectrum (probably due to the fact they had a somewhat large backing by a US based carrier at that time). Pretty sure that if they desperately wanted to follow the GSM path they could have done so at that point. They simply made a mistake 10 years ago, they weren't forced.
Comment by sbiddle, on 30-MAY-2007 08:25
"I don't believe that Telecom were forced down the CDMA path as you state, Telecom brought spectrum in both CDMA and GSM, however the MED stated they weren't allow to own both, so they had to sell one. Telecom made the choice to sell the GSM spectrum (probably due to the fact they had a somewhat large backing by a US based carrier at that time). Pretty sure that if they desperately wanted to follow the GSM path they could have done so at that point. They simply made a mistake 10 years ago, they weren't forced."
Telecom wanted the GSM path, Ameritech/Bell Atlantic didn't so Telecom chose to give up their ETACS spectrum and keep the 2nd AMPS band. This mistake was 1992 however which was 15 years ago. Telecom realised by the late 90's that this was a big mistake and that GSM was the preferred path however at that stage they owned no spectrum to deploy GSM in and were forced to go down the CDMA path. Telecom purchased 1800 and and 2100MHz spectrum in the 3G auction but the cost ofcost benefit analysis of deploying an entirely new 1800 GSM / 2100Mhz WCDMA network (remembering that no existing gear could be used) simply didn't stack up. Telecom looked at 850Mhz GSM but made the wise decision to wait until 850MHz WCDMA was a reality. From a business point of view Telecom have made the best decision, while they may have maintained a larger market share having gone down the GSM 1800 path in the late 90's and then deployed WCDMA 2100 the cost to do this vs staying with CDMA simply never stacked up.
People may criticise Telecom for their technology path but IMHO the decisions they have made in the past 8 or 9 years have been very well thought out and actually played out very well for Telecom.
Comment by jon, on 30-MAY-2007 09:38
So why did TelstraClear blame Vodafone?
Comment by Brenda, on 30-MAY-2007 10:19
I do a dance of GLEE!!!!!
Comment by MG, on 30-MAY-2007 14:48
Good move, Telecom. Now the questions start ... any idea on GSM and then WCDMA deployment timeframe? Consumer questions ... my contract is finished - do I port across to VF now and get a year out of a new phone, chance to easily roam, then can I port back if I choose to? Will my VF phone be locked into one network (keys easily available on 'net). My CDMA data card won't work in Aussie - do I need a second datacard? They need to spell this move out v clearly.
Comment by bradstewart, on 30-MAY-2007 15:43
This hasn't yet been announced to the public, so don't get you knickers twisted...
I doubt there will be any GSM, it just seems to be used as a generic term for GSM, WCDMA, HSDPA etc.
Comment by ahkitj, on 30-MAY-2007 22:09
"Yeah, it's UMTS 850MHz stuff from what I can tell - thanks. It was referred to as GSM though, so..."
So, I'm guessing my briefly-thought-of stupid idea of getting some unlocked 850/1900 2G handsets from the US while I'm there in August to December won't be such a good idea, then?
Comment by James @ NZ, on 1-JUN-2007 12:44
The problem with 850 MHz is the lack of handsets. If you want full international roaming with 850 MHz you will need a quad band handset. There are very few operators operating at this band with the exception of Telstra in Australia. It will be interesting to see how the Telecom offer will stack up with the 900 MHz Vodafone network.
Comment by Yans, on 2-JUN-2007 15:04
Actually, the author mentioned that Telecom will insist on CDMA2000 1X EVDO for its data service and transfer voice to GSM. It seemed clear that it won't be 850Mhz WCDMA & HSDPA or say 850 UMTS. If Telecom reallly go for the UMTS, it is no need EVDO anymore. Because first of all, the UMTS obviously has the higher data speed than EVDO. Secondly, keep the EVDO will require the dual system handset.
The current Telecom frequency spectrum is from 870MHz to 889MHZ in Downlink. It is suitable for 850MHz GSM. But it will at least need a tri-band GSM handset.
It is no point for Telecom hanging on Lucent. The only saving is Telecom can use the current switch.
Comment by Matt Murray, on 7-JUN-2007 20:58
Will this mean my CDMA phone will be worthless when this rollover occurs?
Comment by nzbnw, on 7-JUN-2007 22:47
Matt; Telecom is committed to running CDMA for at least 5 years. So your CDMA phone will likely reach the end of its useful life sometime before then.
nzbnw
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Comment by Grant17, on 29-MAY-2007 22:02
That's exciting news Juha and well done on getting the scoop on this story
I remember some weeks ago when you mentioned that you had written an article for CommsDay, I went looking on their web site for it but couldn't find any mention anywhere at all.
I guess you had to keep it under wraps until CommsDay were ready to publish.
I sincerely hope that we see this rollout of an alternate GSM network sooner rather than later. Vodafone's International Roaming Charges are horrendous because they are the only game in town.
I noticed that Telecom charge $8 per MB to roam in Oz, whereas Vodafone were still $30 per MB last time I looked. That is just Daylight Robbery and we sorely need some competition in the GSM Mobile Arena.
The Hybrid GSM/EVDO network should work very well with NZ's geography I think.