Telecom abandons Australian CDMA project

Telecom has walked away from the more than $A125 million it has spent so far on building a CDMA mobile network in Australia.

A hint that Telecom's future plans in Australia did not include building its own network came with its eleventh-hour withdrawal from the Australian radio spectrum auction in March.

Yesterday, the company announced that its Australian subsidiary AAPT had agreed with its technology partner Lucent to close down the rollout of a CDMA network in Australia.

Both Telecom and AAPT announced their plans to work with Lucent on CDMA networks on the same day in February last year. The twin deals were seen as a keystone of Telecom's trans-Tasman strategy. Now, only Telecom's New Zealand network will be built.

Telecom's general manager for mobile, Mohan Jesudason, said in a statement that the companies had decided to close down the roll-out "in view of changes now occurring in the Australian mobile communications market."

Jesudason said the decision had been taken in the wake of a review that followed the suspension of development of AAPT's network last December 31.

He said AAPT had spent in excess of $ A 125 million on the CDMA roll-out up until that date, but the extent of any write-off would be known "only in due course".

"Telecom will make an appropriate disclosure at that point," Jesudason said.

Lucent's Australasian CEO Phil Pryke put a brave face on the decision, emphasising what a "milestone" the New Zealand network represented for both companies.

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