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2. Annual Update: Key Industry Events from 1998


This Document is Archived


New Zealand Telecommunications 1987-2000

Resources and Networks Branch
[ Last Updated 17 November 2005 ]


January 1998

  • Discussion Paper on penalties, remedies and court processes under the Commerce Act 1986 is released by Ministry of Commerce. The paper proposes that increased penalties and remedies apply for anti-competitive behaviour.
  • Telephone number portability is introduced into New Zealand, by Telecom New Zealand, Clear Communications and Telstra New Zealand's networks, using call forwarding.

February 1998

  • Telecom announces an ADSL1 trial (using its existing twisted copper network to deliver high speed data and video services) in Wellington. This was followed by an announcement in October of its intention to roll out commercial service of xDSL technologies in 1999.

April 1998

  • Clear announces it will start trialling LMDS2 as a mechanism for wireless local loop service (for voice and data) to business customers in main centres from September.

May 1998

  • Saturn launches a residential local telephony service in the Hutt Valley, with a rate of NZ$29.95 per month compared to Telecom's NZ$35.66. This is the first residential local wireline competition in New Zealand. Saturn subsequently expanded to part of the Kapiti Coast and some of Wellington's western suburbs by the end of December. Saturn is continuing to expand its residential telephony service to all of Kapiti and Wellington city and suburbs. It intends to complete its investment of NZ$230 million in the Wellington area by the end of 1999.

June 1998

  • Telecom announces the closure of its First Media cable TV service at the end of July. This followed the decision in November 1997 to stop the rollout of the hybrid fibre coax (HFC) network at 68,000 homes passed (in Auckland and Wellington). Telecom said First Media was closed due to the poor take-up rate of potential customers (approximately 3%) and the decision to concentrate on trialling xDSL technologies for delivery of high speed data to residential customers. Telecom is still evaluating ways to utilise its HFC network, possibly to deliver high speed data services to residential customers.
  • The Treasurer releases a Strategic Overview Paper on the telecommunications industry prepared by Treasury and the Ministry of Commerce. The paper highlighted key reviews underway of numbering administration and portability issues, penalties and remedies under the Commerce Act and the Telecommunication (Disclosure) Regulations.

July 1998

  • The Commerce Commission releases findings on Telecom's competitive response to Saturn's entry (a $5 loyalty discount). The Commission considered that Telecom was pricing above marginal cost. Regional pricing per se, is not necessarily a breach.
  • WorldxChange launches a partnership with retail chain Deka to sell its discounted national and international toll services to residential customers. As of September, WorldxChange claims 6000 customers.
  • In response to other service providers price reductions, Telecom reduces international toll prices by an average of 20%, with reductions on some routes and times by over 50%.

August 1998

  • NetTel launches service as a reseller for Telstra, offering national and international service using calling cards, targeting niche residential and business customers.
  • British Telecom announces that it is increasing its stake in Clear to 50% taking over MCI's 25% shareholding.
  • BellSouth (USA) and Singapore Technologies Ventures announce sale of BellSouth New Zealand to the Vodafone Group for NZ$750 million
  • The Ministry of Commerce releases a discussion paper on options for telecommunications numbering policy. The Minister of Communications sets a tight deadline, 30 November, for the industry to reach agreement on satisfactory voluntary arrangements for numbering administration and resolving longer term number portability issues.

September 1998

  • Superway announces it is commencing a roll out of a cable network in the North Shore of Auckland with the intention of targeting business users at first, supporting high-speed data, telephony and cable television.

November 1998

  • The Ministry of Commerce releases a Telecommunications (Disclosure) Regulations Discussion Paper which proposes that Telecom be required to produce separate financial statements for its local loop and its other telecommunications businesses and to undertake a full economic costing of the Kiwi Share Obligations.
  • Iridium launches first global mobile personal communications by satellite (GMPCS3) service worldwide using handsets, offering service to all parts of the globe.

December 1998

  • Telecom, Vodafone, Telstra, Newcall and Teamtalk agree to arrangements to resolve telecommunications numbering issues. The Number Administration Deed (NAD) provides for: independent administration of each party's telecommunications numbering resources; a process for determining New Zealand's ongoing number portability requirements; and binding arbitration to efficiently resolve any disputes arising between parties with reference to agreed numbering principles to guide the arbitrator. Some parties refuse to sign up to the agreement in its present form.
  • The Government issues statement of economic policy to Commerce Commission on telecommunications numbering. The Ministers of Communications and Enterprise and Commerce state that the Commerce Commission is the appropriate forum to determine whether the deed agreed between telecommunications companies raise any competition concerns.
  • The Government announces that the Ministry of Commerce will auction 32 management rights and approximately 1600 licences in the 2 GHz band of radio spectrum, which spans the frequencies 1710-2300 MHz. The rights to be auctioned are expected to support a range of technologies associated with the next generation of digital cellular mobile services, known as PCS4.

May 1999

  • Xtra, the country's largest ISP (Internet services provider), starts offering flat-rate access to the Internet for $39.95 a month after Clear announced that it intended to do the same. Ihug has been offering flat-rate access for several years.
  • Telecom introduces ongoing $5 capped weekend calls to Australia and $10 capped weekend calls to the UK, Ireland, US and Canada.
  • The Commerce Commission authorises the Number Administration Deed. The parties to the Deed had applied to the Commerce Commission for authorisation because it made access to numbering resources dependent on signing up to the Deed. The Commission concluded that the Deed did not have the effect of lessening competition, and that its public benefit meant that it should be allowed despite the exclusionary provision relating to access to numbers.

June 1999

  • Vodafone announces it will spend $200 million over the next two years to upgrade its cellphone network to cope with increased demand.
  • Telecom launches its JetStream fast Internet service. JetStream uses RADSL (Rate Adaptive Asymmetric Digital Subscriber Line) technology to allow large amounts of data to be sent down a normal telephone line at high speed, while still allowing the line to be used for normal telephone conversations. The cheapest JetStream service allows 600 Mb of data a month to be downloaded (equivalent to about 220 hours online) for $89 (including GST and ISP charges). Installation and modem costs are extra.
  • Clear announces that a $5.5 million bank of computers, referred to as a switch, went live in Christchurch. The computers are the central switching point for the toll, data, and local traffic to and from all of CLEAR's South Island customers. Previously, this traffic was switched through the company's Wellington facility.
  • BT increases its shareholding in CLEAR Communications to 100 per cent.

August 1999

  • Saturn launches a high-speed Internet service for its residential customers. The new service allows a personal computer user Internet access over Saturn's cable network through a cable-modem and an ethernet card in the PC.
  • Telecom announces plans to replace its mobile telephone network with new cdmaOne digital technology. The CDMA (Code Division Multiple Access) technology will provide a high quality digital cellular service with high capacity, high speed mobile data transmission. The new network will not be launched until 2001.
  • Ihug launches calling cards allowing casual use of its cheap toll call service that runs voice traffic over data circuits using voice-over-internet protocol.
  • The Government announces its intended changes to the telecommunications information disclosure regime. A key change is a requirement for Telecom to calculate and disclose the net economic cost of complying with Kiwi Share obligations. Another major change is a requirement for Telecom to publish six monthly financial statements that split Telecom's operations into a local loop business and other telecommunications services. The changes are to take effect from 1 January 2000, with the first financial statements due on 30 September 2000.

September 1999

  • The $2 billion Southern Cross cable, which is 50% owned by Telecom, lands on Takapuna beach in Auckland, completing its trans-Tasman stretch. Once it is entirely completed, the 29,000 km Southern Cross cable will be New Zealand's and Australia's highest capacity route to North America.
  • The Government announces it is satisfied with Telecom's 0867 Internet initiative so long as 0867 is not charged for and service quality is maintained. From 1 November, Telecom plan to introduce a 2c a minute Internet Dial- up Charge (IDC) for Internet access for residential line customers after 10 hours of free use each month.5 The charge will not apply to Telecom customers who use 0867, 0873 IPNet, or 0800 toll free numbers to dial-up their ISP.

November 1999

  • Elizabeth Longworth is appointed chair to the Number Administration Deed Management Committee.

January 2000

  • Vodafone and Telecom released figures showing huge growth in the number of mobile phone connections in the last quarter of 1999. Vodafone's connections grew by 35 percent in the three months to 31 December 1999 to reach 397,000 while Telecom's mobile connections grew by 13 percent over the quarter to reach 858,000.

February 2000

  • The new Government announces a Ministerial Inquiry into telecommunications. The Inquiry is to be run by a three-person team chaired by Hugh Fletcher, the former Chief Executive of Fletcher Challenge. The Inquiry is to present a final report to Government by the end of September.

1Asynchrous Digital Subscriber Line. This technology digitises signals over conventional twisted copper wire line, enabling high speed date service to be offered along the same lines as conventional switched telephony.

2Local Multipoint Distribution System. A super high frequency wireless technology which is cellular based, used to deliver local telephony service and high speed data.

3Global Mobile Personal Communications by Satellite. This term is generally used to describe the new generation of worldwide satellite based personal mobile telephony services. Globalstar and ICO are expected to launch similar services to Iridium in the next 2 years.

4Personal Communications Services. This refers primarily to localised mobile phone services, servicing small areas, such as factories or a residential area. It is also now used to refer to 3rd generation mobile services or IMT-2000 (International Mobile Telecommunications), which is designed to combine GMPCS, cellular mobile and PCS services into a seamless mobile telecommunications service.

5The introduction of the 2c a minute charge was delayed by at least a month for the customers of many ISPs. This was to allow all the ISPs to be connected to the new number range.


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