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At last, a challenge to Telecom DSL?

So long as Telecom (in whatever form) retains its strangle-hold on the copper used for DSL connectivity to the vast majority of NZ's homes and businesses, there's little hope of any significant reform in the broadband pricing market.

Or is there?

I note on the wires this morning (see the news headlines) that CallPlus has secured a snot-load of money to build its own nation-wide WiMax network.

How much money is involved?

Well almost half a billion US dollars, that's how much.

In good old Kiwi dollars, that's around $650 million -- or more than $150 for every man, woman and child in the country.

That is actually a *huge* wad of dosh and, if what we can believe what we read, could significantly change the broadband landscape in New Zealand.

I've always been a little skeptical about the potential for wireless broadband as a real competitor to copper-based DSL, mainly because those in this sector of the market have been relatively small players with relatively tiny amounts of cash to throw around.

If CallPlus carries out its plans, they could effectively step right up to the plate and become a very significant challenger to Telecom -- that's got to be good news.

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Of course CallPlus aren't the only players in town and Woosh has also stated its intention to chase a fair slice of that 2.3GHz spectrum in order to install its own WiMax networks around the country.

So competition for the rejigged 2.3GHz band looks to be getting hot and there'll likely be more than just these two bidders, which could result in a crazy-silly price being paid, leaving less money available for actually implementing systems.

Let's hope that's not the case -- just remember what happened during the dot-com boom when telcos went mad and paid billions for spectrum that was worth much less.

Another rather intriguing aspect of CallPlus's announcement is that there are few details provided. So far, we're told, it's just a group of anonymous "institutional investors" who are allegedly stumping up with all this cash.

Being the old cynic I am, I can't help but wonder whether this announcement is simply designed to bias government towards favouring CallPlus's bid for spectrum. After all, Woosh has had a long time to make its mark in the broadband market and so far all we've seen are huge losses and a big yawn all round. If CallPlus could bring more than half a billion US$ of investment into the country and provide real competition to Telecom's DSL, wouldn't that be worth giving them a bit of favour and discount?

Let's stay tuned to this story and see what happens, it could be rather interesting.

What do you think?

If CallPlus has pulled off this investment deal, should we be getting right behind them so as to ensure some real competition in the broadband market?

Or would this just be a case of replacing a monopoly with a duopoly and seeing a fair percentage of CallPlus's profits being remitted offshore to those institutional investors?

Is it worth taking the risk in order to possibly scuttle the Telecom monopoly?

Have your say on this...

Oh, and don't forget today's sci/tech news headlines

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