22 June 2006

Significant development of New Zealand’s telecommunications sector is expected with Econet’s construction of a third-generation mobile network.

In partnership with China’s largest technology company Huawei Technologies, African based Econet Wireless is constructing a W-CDMA network that will establish it as New Zealand’s third cellular services provider.

Econet is establishing a 10-cell-site pilot project in Auckland and intends to roll out its network to other major cities later in the year. Eventually, 410 sites in four cities are planned.

Over 3.3 million New Zealanders have a mobile connection, representing market penetration of around 83 percent, in a sector currently dominated by two main players, Vodafone and Telecom.

Econet established operations in New Zealand in 2001 and the Managing Director, Tex Edwards, says the opportunities for the company in New Zealand are exciting.

“Fixed to mobile substitution is still in its infancy in New Zealand. Ireland, which is a similar sized market, already has four mobile networks and the possibility of a fifth. We see plenty of room in New Zealand for a third provider.”

Mr Edwards says in any industry the entrance of third player is a fantastic proposition for both consumers and other operators.

“We will be offering exciting brand propositions and helping to drive prices down. There are great opportunities to bring competition as a network provider and to capture new business in a rapidly growing market.”

Huawei, a privately-held Shenzen-based company, owns around 20 percent of the networking and telecommunications market in China. Last December it opened an East-Pacific headquarters in Sydney as a base for expansion into Australia, New Zealand, South Korea, Hong Kong and the Pacific islands. Huawei had revenue of US$8.2 billion (NZ$12.1 billion) in 2005 with more than half of that coming from overseas markets.

Econet Wireless International has a preferred W-CDMA supplier agreement with Huawei for the Asia-Pacific region.

Chris Tozer, ICT Business Development Consultant for Investment New Zealand, says the development of this network is positive news for New Zealand.

“Ultimately this is likely to result in cheaper services to consumers and businesses. The fact that a large telecommunications company from China is investing in New Zealand is also a strong sign to the international community that New Zealand is a good place to do technology-related business.”

“Econet’s expansion in New Zealand has the potential to create more jobs and attract further foreign investment, helping to grow the New Zealand economy.”

Investment New Zealand has provided assistance to Econet by facilitating immigration issues for Huawei staff from China who are working on construction of a mobile network in Auckland.

For more information on New Zealand’s telecommunications industry email:

chris.tozer@investmentnz.govt.nz