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UPDATE: A more in-depth Herald piece looking at the implications of Telecom’s shift in mobile strategy and my cHerald comment piece here. The Sunday Star Times business editor Tim Hunter explains the mobile roaming revenue Telecom can expect to tap into when it has a foot in the GSM/UMTS camp.

Juha’s scoop gives some interesting details of Telecom’s decision to spend $300 – $400 million on a GSM/UMTS network, confirming rumours that Telecom has been looking to extricate itself from CDMA.

I blogged about it in detail my Herald blog early this morning. So far, no official confirmation of the leak from Telecom and its shares are not on a trading halt, which is unusual given a development that is so material to Telecom’s business has been revealed. There’ll be lots of angles to this story. For instance:
- What will it mean for the newly flush New Zealand Communications which is set to build a GSM network itself? Maybe it’s a good thing as it will open up GSM roaming options.
- What about TelstrsClear? Will it exit the 029 arrangement with Vodafone in favour of some wholesale deal with Telecom?
- What about the hybrid network model Juha talks of, where CDMA is kept for high-speed data. How will this work for customers? Will they need dual-mode handsets to talk and use data? Will
EV-DO be restructed to PC data cards?
- What will Telecom do with its Hutchison 3G partnership? How will it leverage H3G services over here?

A few comments via the Herald:

From Keith:
Interesting comments about Telecom going GSM. I have been a Telecom mobile customer since 1989. I take a bit of an exception to your comment about CDMA being a bad choice. I have found call clarity and connections generally to be better with 025/027. In the early days 025/027 was far superior. Admittedly that may have changed in more recent times. Equally, my reading of the mobile data situation was that the Telecom products have offered better speed. Perhaps the only bad part of the decision is that the rest of the world went with a different standard. Had they gone CDMA then Telecom’s choice would have looked inspired!

As for a better selection of handsets. So what! It may be important for geeks and fashionistas but the rest of us get by with the Telecom selection (currently I have a Treo 600). I also have a work 021, a very nice and expensive Nokia, which I like. As for the Motorola RAZR phones, my previous experience with Motorola phones and modems including cable modems is that they are hopelessly unreliable. This was confirmed very recently when the boss “upgraded” to a Motorola RAZR which managed to die just prior to his overseas trip. I wouldn’t touch Motorola gear, no matter how nice it looks. I’ve also managed to persuade my kids to avoid it as well.

Telecom didn’t really have much choice by the looks of it, but for most of us it comes down to price and service, not technology.

Of course, with number portability maybe none of it matters. Not that the networks are saying much about that. Where is it at?

From Mark:
Interesting story on Telecom NZ move to GSM. I left NZ in April 1996 and went to work in Vietnam, where GSM mobile phone connections outnumber landlines by a considerable amount. I quickly realised (as you do when you work outside NZ) that a good proportion of the rest of the world also used it, and on my first trip back six weeks later gave my 027 phone to my wife and have been a Vodafone customer ever since. Interestingly, at the same time a good friend of mine owned (and still does) a Telecom franchise in New Plymouth and had no qualms telling me that CDMA would take over the world and texting would never take off. I could never convince him at the time that I thought Telecoms was a poor choice and that the rest of the world was moving in a different direction. I now own a triband Smartphone and use it in the US, Europe, the Middle East and SE Asia, roaming all of the time on Vodafone. It even worked in Brazil!

From Olga:
Your article is interesting but to share another aspect with you, as it happens Vodafone are erecting a tower & base outside my house today. This is despite my cries to Auckland City and Vodafone to move over it over the road where there are no houses.

So possibly this explains their hard stance with me.
There are bigger more powerful reasons, e.g. Telecom using the same facilities? Who cares about the safety (traffic concerns as base box obscures road & frequencies of units etc) of people when theres more profit to be made. Maybe the next time we read the glowing reports in the business section of the papers, you can highlight that the real price is being paid by a handful of affected people sacrificed for the sake of profit. What do you think??

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