From Juha:


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.