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GENERAL: SPK: Spark planning for 5G, scotches mobile monopoly suggestions

08 Dec 2017 13:12NZX
MARKET RELEASE

08 December 2017

Spark already well advanced in 5G planning, scotches mobile monopoly
suggestions

Recent suggestions from Chorus that 5G mobile services should be rolled out
in New Zealand by a monopoly network similar to fixed-broadband are entirely
self-serving and not in the interests of consumers, Spark said today.

Spark Managing Director Simon Moutter said consumers have benefited hugely
from competition between three mobile network providers (Spark, Vodafone and
2 Degrees) in respect of 3G and 4G services, and there is no reason why the
same should not apply to the next generation of 5G.

"A monopoly is and always should be the last resort option for a market, not
the first as Chorus is proposing.  Infrastructure-based mobile competition
has resulted in faster network rollouts, much lower pricing and a steady
stream of product innovations, almost all funded by the industry players
involved.   It''s compelling evidence that competition is the best way to
deliver great consumer outcomes. And any suggestion that taxpayers should be
asked to pay for a 5G monopoly in our country is ludicrous."

Over the last five years the three mobile networks have invested a combined
$2 billion (including spectrum) representing the vast majority of mobile
infrastructure investment, in the same period the Government has only had to
contribute around $49M to improve coverage in uneconomic fringe areas of the
country via the Rural Broadband Initiative (RBI).   There may well be remote
parts of the country where a similar subsidisation may be necessary for 5G
but Mr Moutter said this should only be considered once commercial funding
models had been definitively ruled out.

Spark''s plans for 5G are already progressing. The company successfully
trialled 5G late last year in conjunction with Victoria University, achieving
mean speeds of up to 3 Gigabits per second - approx. 100 times faster than
typical 4G services. 4.5G - which can be a bridge between 4G and 5G
technology - was launched in October 2016 and now has 31 live sites in 22
locations.  Although Spark is not yet in a position to provide definite time
frames, it expects to start rolling out 5G within the next few years.

Mr Moutter says creating a monopoly mobile network is not in the interest of
open competition or customers.

"We''re confident the majority of New Zealand can sustain multiple 5G networks
and that''s the path we are committed to.  No industry amalgamation was
required for the transition from 3G to 4G, and none is required from 4G to
5G. Based on our current analysis, we think the investment for 5G will be
manageable, as we will be able to leverage our existing 4G and 4.5G physical
infrastructure.

"That''s not to rule out sensible infrastructure sharing where that can speed
up deployment or address visual pollution issues that might come from
deployment of more network sites - we are supportive of those models.  But to
jump straight to a conclusion that we need a monopoly network would be crazy.

"Additionally, it would be outrageous to suggest that Chorus would be allowed
to create a monopoly in the 5G mobile market alongside its existing
monopolies in fixed fibre and copper broadband - especially when mobile
broadband is increasingly creating healthy competition with fixed broadband.
Any attempt to further entrench monopoly networks would be a bad outcome for
New Zealand consumers and businesses."

Mr Moutter noted that while the UFB network rollout was delivering many
benefits for consumers, the structure of the fixed broadband market was
contributing to poor customer service outcomes. This is a direct consequence
of the fact that broadband retailers are not in control of the full
end-to-end service experience which can be extremely frustrating for both
customers and retailers.

-ENDS-

For media queries, please contact:
Michelle Baguley
Head of Corporate Communications
+64 (0) 21 605057

For investor relations queries, please contact:
Dean Werder
General Manager Finance and Business Performance
+64 (0) 27 259 7176
End CA:00311651 For:SPK    Type:GENERAL    Time:2017-12-08 13:12:15
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