ComCom clears Telecom spectrum purchase

30 May 2014

New Zealand’s anti-trust authority the Commerce Commission (ComCom) has approved Telecom Mobile, the wireless arm of fixed line incumbent Telecom New Zealand, to acquire the rights to the final 2×5MHz block of 700MHz spectrum. As previously reported by CommsUpdate, in October 2013 2degrees, Telecom, and Vodafone New Zealand were named as the winning bidders in the state’s 700MHz spectrum auction. Telecom and Vodafone each successfully bid NZD66 million (USD54.5 million) for 2×15MHz blocks, while 2degrees agreed to buy 2×10MHz spectrum blocks, paying NZD44 million. With the outcome of the sale having left a 2×5MHz block unsold, in January this year Telecom was confirmed as the successful bidder for this last lot, with a bid of NZD83 million, subject to approval from the competition watchdog.

Explaining the authority’s ruling, ComCom chairman Dr Mark Berry noted that the proposed placement of the unsold frequencies in a position that is not adjacent to 2degrees’ other spectrum holdings was the main factor in reaching its decision. ‘Current technology is unable to fully utilise non-adjacent blocks,’ Dr Berry said, adding: ‘Even if 2degrees was to acquire the 5MHz block, 2degrees’ competitiveness in this space is not likely to be materially enhanced since the block is not adjacent. Based on the proposed placement of the unsold 5MHz block, the Commission considers it unlikely that competition would be any greater if another mobile network operator bought the final block instead of Telecom, so we have cleared the purchase.’

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