Vodafone NZ has created certainty out of uncertainty through two sharp deals that delivered the confidence it needed to push ahead with a 5G rollout.
New Zealand's mobile telcos find themselves in a bind with the target spectrum for 5G scheduled for auction in 2022.
To roll out 5G any earlier, they needed to allow for the fact that they will not know in advance the exact spectrum bands they will be able to buy at auction.
So, how was Vodafone able to announce last month that it would launch commercial services in Auckland, Wellington, Christchurch and Queenstown in December?
The answer lies in two new deals.
Vodafone has cut through the spectrum auction uncertainty by inking one agreement with its 5G equipment partner, Nokia, and another with the current holders of spectrum management rights in the target 3.5GHz band.
Vodafone NZ's director of infrastructure and wholesale Tony Baird explained to Reseller News that in addition to temporary bands licensed by the government for carriers to undertake-commercial 5G testing, Vodafone has two blocks of 28MHz to launch commercial services on.
"That will give us pretty good performance," Baird said. "It won't give us the true performance."
Vodafone's current equipment can be tuned to most but not all of the target 3.5Ghz bands, he explained. However, if the auction delivers a block or blocks at the top end of those bands, to which the company's current gear can't be tuned, Nokia has agreed to replace that equipment.
Either way, Vodafone's investment in 5G is safeguarded.
The company has also ensured it has sufficient spectrum for a commercial launch through licensing spectrum from other holders ahead of the auction.
"We are the only people who can do a commercial 5G launch because we have those two blocks commercially and we have licensed other spectrum in this block from other providers so we have the ability to join them all together and get up to 80MHz, say, commercially through licensing arrangements," Baird said.
Another spectrum area is 26GHz to 30GHz, called millimetric radio. With these higher spectra, comes higher speeds, Baird explained. This is useful for applications such as video broadcasting.
"The next play for use then is obviously millimetric radio, trying to get 500MHz or more. We already have spectrum from TelstraClear so we have been testing 28GHz on the roof here [at Smales Farm, in Auckland].
Vodafone and Spark also hold 2.3GHz and 2.6 Ghz spectrum now for 4G as well as other "legacy" spectrum. Vodafone is "refarming" some of these holdings to boost existing 4G and 3G services and to improve "in-building" services.
Baird carries a new job title and a new role within Vodafone NZ which has conceptually been split in two horizontally.
At the base is what Baird calls the "Netco" which provides services to the company's commercial units and also wholesale services to other customers, collectively called "Servco".
Baird is in charge of the "Netco" side of the business and charged with driving wholesale growth.