Vodafone stopped its 3G network implementation

Forums › One New Zealand (including Vodafone, WxC, Farmside) › Vodafone stopped its 3G network implementation

Aloha

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#15711 4-Sep-2007 13:26

NZ Herald

And then what? Are they doing good for us or for themselves with this decision?
This localized market really needs competition -> good for the people.
However I am not sure if a third mobile company would make big changes here, but I absolutely support Telecom with their GSM/WCDMA rollout.

I is a kollege stoodent. Bee nice.

Zimsar10

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#85286 4-Sep-2007 13:36

I was shocked to read this as well & I must say this is very disappointing news indeed. No doubt they will crank up the implementation again, but the question is when?

sbiddle

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#85288 4-Sep-2007 13:42

It just gets back to the same stmubling block - our outdated TSO that panalises competitors. The Kiwi Share was designed as a short term policy that would carry Telecom through it's restructuring from a SOE to a publically listed company. It was never designed to be essentially unchanged 16+ years later.

I also have doubts about what Vodafone is actually stopping, last I heard their 900MHz WCMDA was still progressing well.

VFNZPaulBrislen

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#85289 4-Sep-2007 13:49

Just to clarify: we have ceased work on expanding the 3G network beyond the 19 towns and cities we have already committed to. Those areas are still proceeding according to plan - what we've done is called a halt to any work beyond those centres until we get clarity on the government's position.

WRT the TSO:

Vodafone has paid Telecom $116m over the past five years in TSO subsidies.
Every year the price we pay goes up by 15%.
The MED has recently suggested Telecom does not invest the money it receives for TSO subsidies in rural and remote NZ.
Vodafone estimates our network already covers 70% of the customers served by the TSO subsidy, yet the Commerce Commission doesn't take that into consideration.

All that makes any business case for investing in rural/remote NZ quite difficult before we even begin with the co-location and roaming draft determination.

But remember, this is only a draft determination. The Commission is seeking comment and Vodafone has made its submission. There will be a conference, a final round of cross-submissions, a final determination and a recommendation to the minister before this process is concluded.

Cheers

Paul

Paul Brislen
Head of Corporate Communications
Vodafone

http://forum.vodafone.co.nz

Zimsar10

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#85290 4-Sep-2007 14:00

PaulBrislen: Just to clarify: we have ceased work on expanding the 3G network beyond the 19 towns and cities we have already committed to. Those areas are still proceeding according to plan - what we've done is called a halt to any work beyond those centres until we get clarity on the government's position.

WRT the TSO:
Vodafone has paid Telecom $116m over the past five years in TSO subsidies.

Every year the price we pay goes up by 15%.
The MED has recently suggested Telecom does not invest the money it receives for TSO subsidies in rural and remote NZ.
Vodafone estimates our network already covers 70% of the customers served by the TSO subsidy, yet the Commerce Commission doesn't take that into consideration.
All that makes any business case for investing in rural/remote NZ quite difficult before we even begin with the co-location and roaming draft determination.

But remember, this is only a draft determination. The Commission is seeking comment and Vodafone has made its submission. There will be a conference, a final round of cross-submissions, a final determination and a recommendation to the minister before this process is concluded.

Cheers

Paul

Thanks for clarifying this Paul, I completely support Vodafone with ensuring that this TSO arrangement is reviewed & hopefully canned, it just doesn't make sense that Vodafone or any other Telco should give Telecom money for something that could do themselves.

What is even more disturbing however is "The MED has recently suggested Telecom does not invest the money it receives for TSO subsidies in rural and remote NZ".

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#85291 4-Sep-2007 14:01

Hi Paul,
And what about your WCDMA900 plans? Are there any progress?
Cheers,
Pete

I is a kollege stoodent. Bee nice.

VFNZPaulBrislen

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#85293 4-Sep-2007 14:06

And I should have stuck in the link to the TSO discussion paper:

http://www.med.govt.nz/templates/StandardSummary____296.aspx

sorry about that.

You'll find a link in there to the "how to make a submission" process as well. If you feel strongly about the TSO (any of you) I'd urge you to put your point of view.

Cheers

Paul

Paul Brislen
Head of Corporate Communications
Vodafone

http://forum.vodafone.co.nz

Aloha

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#85294 4-Sep-2007 14:10

Thanks Paul.

Here is the link: Have Your Say

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Zimsar10

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#85295 4-Sep-2007 14:11

PaulBrislen: And I should have stuck in the link to the TSO discussion paper:

http://www.med.govt.nz/templates/StandardSummary____296.aspx

sorry about that.

You'll find a link in there to the "how to make a submission" process as well. If you feel strongly about the TSO (any of you) I'd urge you to put your point of view.

Cheers

Paul

Hi Paul, with regards to the MED stating "The MED has recently suggested Telecom does not invest the money it receives for TSO subsidies in rural and remote NZ" do you have any official evidence of this statement, as I would like to make a submission, but I need the facts.

Jama

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#85296 4-Sep-2007 14:13

The TSO subsidy that Voda pays to Telecom has been used to build an EVDO network, and what a fantastic network it is.

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#85297 4-Sep-2007 14:21

Jama: The TSO subsidy that Voda pays to Telecom has been used to build an EVDO network, and what a fantastic network it is.

Too bad they didnt build a GSM/WCDMA network from this money. What a fantastic competition it would be. :)

I is a kollege stoodent. Bee nice.

VFNZPaulBrislen

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#85299 4-Sep-2007 14:35

Peter Griffin wrote a nice blog entry on it:

http://www.nzherald.co.nz/category/story.cfm?c_id=49&objectid=10458707

in which he points to the Network Strategies report referenced in the MED discussion paper...

quote:
According to consultancy Network Strategies, Telecom's average annual level of rural fixed network investment since 1994 has been "less than half the depreciation allowance for an equivalent efficient replacement network which for assets with an economic life of between 15 to 20 years is estimated to fall between $50 million to $70 million per annum (gross)".
quote:

The strategy paper is referred to in the MED paper at paragraph 147 (page 33) and one suggestion is that the money go into a central fund to resource build out to non-viable customers.

The full MED paper is here in PDF form:

http://www.med.govt.nz/upload/50736/discussion-document.pdf

Cheers

Paul

Paul Brislen
Head of Corporate Communications
Vodafone

http://forum.vodafone.co.nz

sbiddle

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#85300 4-Sep-2007 14:47

If Telecom have so many unprofitable customer why can't they actually list them?

If these unprofitable customers do exist they why aren't other providers (such as Vodafone) able to tender to provide these customers with a phone service?

Why should Telecom be able to claim that customer x is unprofitable therefore we need to charge competitors $x to recoup the cost of providing a service to that customer? The mere fact that cross subsidies exist and the fact that some rural customers may be unprofitable is yet more proof as to why the cost of providing a phone service should be more in rural areas than what it is in metropolitan areas.

Imagine if MCdonalds had a monopoly in the burger market so you decide to open your own burger store. How fair would be be for you to then have to pay McDonalds a subsidy because you're in competition with them and might take some of their customers?

Zimsar10

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#85301 4-Sep-2007 15:01

PaulBrislen: Peter Griffin wrote a nice blog entry on it:

http://www.nzherald.co.nz/category/story.cfm?c_id=49&objectid=10458707

in which he points to the Network Strategies report referenced in the MED discussion paper...

quote:
According to consultancy Network Strategies, Telecom's average annual level of rural fixed network investment since 1994 has been "less than half the depreciation allowance for an equivalent efficient replacement network which for assets with an economic life of between 15 to 20 years is estimated to fall between $50 million to $70 million per annum (gross)".
quote:

The strategy paper is referred to in the MED paper at paragraph 147 (page 33) and one suggestion is that the money go into a central fund to resource build out to non-viable customers.

The full MED paper is here in PDF form:

http://www.med.govt.nz/upload/50736/discussion-document.pdf

Cheers

Paul

Brilliant, thanks so much Paul!

Zimsar10

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#85302 4-Sep-2007 15:02

sbiddle: If Telecom have so many unprofitable customer why can't they actually list them?

If these unprofitable customers do exist they why aren't other providers (such as Vodafone) able to tender to provide these customers with a phone service?

Why should Telecom be able to claim that customer x is unprofitable therefore we need to charge competitors $x to recoup the cost of providing a service to that customer? The mere fact that cross subsidies exist and the fact that some rural customers may be unprofitable is yet more proof as to why the cost of providing a phone service should be more in rural areas than what it is in metropolitan areas.

Imagine if MCdonalds had a monopoly in the burger market so you decide to open your own burger store. How fair would be be for you to then have to pay McDonalds a subsidy because you're in competition with them and might take some of their customers?

Totally 100% agree. I hope you are making a submission, this sort of information is exactly what they decision makers need to hear, well done.

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#85306 4-Sep-2007 15:27

Bummer. I take it that means Rolleston, "town of the future", is going to miss out then. Or is it included in the Christchurch area?