3 August 2006

The Ministry is providing this update in response to queries from some stakeholders.

Renewal policy

Under existing policy, incumbent right holders will be given the first right of refusal to the same rights they currently hold. There has been no decision to change that policy.
 

Consultation process

The current submission process is the only formal consultation specifically intended for the renewal of cellular rights. The Ministry encourages stakeholders, at this stage, to submit evidence supporting their views - so it can be considered in finalising the case-by-case review for cellular rights.

The Ministry may conduct informal consultations with the right holders concerned during the development of the final working model for calculating the renewal price to clarify and discuss any technical matters associated with the model.
 

Incremental ODV based approach

If the approved pricing methodology is the incremental ODV approach, then the implementation of this approach will include the development of a working model of a generic cellular operator. This work will include identifying the various technical parameters and gathering other relevant information to determine:

• what the optimal network would look like;
• the spectrum package required for the optimal network;
• the appropriate increment that will be removed from this spectrum package; and
• the price per unit of spectrum.

The profile of a generic operator would partly depend on the current usage and what current operators' intentions are for the spectrum in review, which are questions raised in the discussion paper. One of the objectives of the discussion paper is for incumbents and other interested stakeholders to inform the Ministry about their views on the profile of a generic operator and what inputs would be appropriate to use for such an operator.

As the current management rights are used nationwide, it is assumed that the rights to be considered would also be nationwide.
 

Auction

If incumbent right holders reject some or all of the renewal offers from the Government, then the relevant rights will be auctioned once the offer process is completed. Similar to previous spectrum auctions for large commercial rights, any auction will be open to all interested bidders. As stated in the discussion paper, spectrum acquisition through an auction will need to be within the bounds of the Commerce Act.