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Spectrum winners faced with squatters

By Nick Stride

Friday 19th May 2000

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Successful bidders in the July 10 third-generation (3G) spectrum auction will find a number of "squatters" on their airwave real estate but a ministry spokesman insists that is not a problem.

Large companies such as Broadcast Communications Ltd, Telecom, Airways Corporation, Transpower, Mai FM and others occupy "holes" in the two gigahertz spectrum which they use for point-to-point fixed links.

The official said bidders would be made fully aware of the "incumbencies" and would have "various legal rights" after the auction. The incumbents did not hold legal title to the management rights for the frequencies.

The ministry said the "holes" need not interfere with 3G services, which were not expected to be introduced for two to three years in any case, and all incumbencies would end within five years.

Meanwhile, the government's decision this week to reserve one spectrum block for Maori tightens supply of a highly sought-after asset, potentially pushing up the price successful bidders will pay.

Three blocks are available to non-Maori. For the existing mobile telecoms players, Telecom and Vodafone, 3G spectrum is a "must have" asset. Both the other major telcos - Clear Communications and Telstra Saturn - have confirmed they are "interested."

Businessman Bill Osborne, appointed to set up the pan-Maori trust with exclusive rights to one block, has a lot of work to do in the seven remaining weeks.

The trust will still have to raise funds or secure lines of credit to finance its licence, for which it will pay the average price of the other blocks less 5%.

The spectrum is expected to raise $1 billion.

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