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Telecom in drive to latch on to growing data usage with 4G mobile launch next month

Monday 7th October 2013

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Telecom Corp, the country's biggest telecommunications operator, is looking to latch on to rapidly growing data usage with the launch of its 4G mobile services next month.

The Auckland-based company will open its long-term evolution mobile network, as the technology is known, on Nov. 12 to customers in Auckland, Wellington and Christchurch on 4G-capable devices at no entry cost, it said in a statement. The launch is part of Telecom's drive to capitalise on growing data usage on mobile devices, which now accounts for about 46 percent of an average customer's monthly spend.

Telecom Retail chief executive Chris Quin said the company is targeting data usage rather than straight customer numbers in the roll-out of 4G. The company's average data use per mobile customer rose 6.2 percent in August to 384 megabytes from a month earlier, and was up 63 percent from the same period a year earlier, according to Telecom figures.

"Mobile data is the fastest growing revenue stream for us," Quin told a conference call from Auckland, without commenting on Telecom's targets for average revenue per user (ARPU).

Telecom had 1.82 million mobile customers as at June 30 with an ARPU of $33.55. Of that, $15.52 was data.

The company has gone through a radical overhaul this year into a data-driven and mobile-focused telecommunications operator. That's against a backdrop of falling retail prices for telecommunication services.

Chief operating officer David Havercroft said initial 4G customers will be using its existing 1800 megahertz spectrum, then the company will look at how best to use the 700 MHz spectrum being auctioned by the government and which is more economical to operate outside major cities.

Telecom's shares fell 0.4 percent to $2.295 today, and have increased 1.3 percent this year. The stock is rated an average 'hold' based on 10 analyst recommendations compiled by Reuters, with a median target price of $2.28.

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