Vodaphone cleared for spectrum purchase

Commission chairman, John Belgrave, says that the Commission was satisfied that should Vodafone be successful in acquiring the rights and licences for which it has sought clearance, it would not acquire or strengthen dominance in any market.

The Commission says in the current mobile telephony services market Vodafone faces effective competition from Telecom (NZSE: TEL) throughout the country.

On Friday the 2GHz auction was suspended until after the government responds to the Ministerial Inquiry into Telecommunications, which is expected the week before Christmas.

Communications Minister Paul Swain said some bidders had indicated that the government's telecommunications decisions may affect the value of spectrum bids.

The 2GHz spectrum can be used to provide high-tech cellphone services including e-mail, Internet access, video and television.

Round 380 of the auction concluded last week with total bids at $145 million, dominated by Vodaphone, Telecom, Clear Communcations and Telstra Saturn.

Vodaphone has been steadily eating away at Telecom's dominance of the mobile phone market in recent years, having increased its customer base by almost five times in two years with figures for the end of the September quarter showing customer numbers of 638,000.

In comparison at the end of September Telecom had 1.03 million connections, and said its market share had stabilised and growth had resumed in the number of customers with post-paid connections.

It's estimated more than 40% of New Zealanders now owns a mobile phone, up from 27% a year ago.

Meanwhile Vodaphone New Zealand's parent company in the UK is again being tipped as a potential purchaser for Cable and Wireless Optus' mobile assets in Australia, with a British financial paper reporting that the company is planning a five billion pound bid.

C&W Optus has called for expressions of interest in its three divisions before Christmas.

Market speculation has also touted a partnership between Telecom and Japan's DoCoMo for the mobile business, but DoCoMo is now believed to be rethinking its interest in making the Aussie acquisition.

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