Oz Operator Kills NZ Network

The chances of third mobile network being constructed in New Zealand tumbled yesterday after TelstraClear said it was canceling its planned US$50 million high-speed backbone. The Australian operator claimed the project - which it had dubbed "Unplugged" - would no longer have been viable after its rival Vodafone made a last-minute change to the roaming agreement drawn up between the two.

The so-called Unplugged network was designed to deliver mobile phone and broadband internet services, initially to the Tauranga region, where it would have launched in July of this year. The plan had been to extend the network to the rest of New Zealand later in the year.

However, a last minute change to the agreement with Vodafone, which Telstra said would effectively prevent its customers from using local Tauranga telephone numbers, forced TelstraClear to halt construction. The Australian company said it was forced to choose between delaying the launch and going to court or pushing on with a less attractive and less competitive service. In the end the company chose neither option and simply shut down work on the network.

TelstraClear says it already had a national roaming agreement in place with Vodafone related to its earlier plans for a national mobile network. That had been amended to allow TelstraClear to proceed with Unplugged

According to Allan Freeth, CEO of TelstraClear, quoted in the local Kiwi press, his company had signed the contract but later - "We looked at it pretty closely and saw it wasn't going to work for us so we had to stop now." Asked if Vodafone had gone back on their word Freeth reportedly said "I'm not sure those words are the correct ones but certainly in terms of commercial behaviour and in terms of certainty of where we were ... that last-minute change was a pretty critical one for us."

For its part, Vodafone deny that there were any changes to the roaming agreement and said they were at a loss as to why TelstraClear had decided the agreement was unsatisfactory.