2degrees to build 'almost brand new network' with Ericsson to get into 5G

Wednesday, 14 April 2021

2degrees will build what is essentially a brand new network in the major cities.

2degrees will partner with Sweden’s Ericsson to build a 5G mobile network after its longstanding Chinese technology supplier Huawei was shut out of the 5G market by a de facto “five eyes” ban.

The country’s third mobile network operator said it would switch over 100 of its cellsites in Auckland and Wellington to Ericsson equipment capable of providing 3G, 4G and 5G services by the end of this year.

It plans ultimately to swap out equipment on 700 of its 1800 cellsites so it can offer the latest generation of mobile technology.

Chief executive Mark Aue said the investment would allow the company to offer fixed-wireless broadband to more homes.

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But he said the company would be driven by “the customer experience” in deciding what broadband technologies to promote to whom.

2degrees spent about $1b on its existing 3G and 4G Huawei network, but Aue would not say how much the conversion would cost.

Chief technology officer Martin Sharrock said its new Ericsson equipment would let 2degrees dynamically switch capacity between 3G, 4G and 5G, also doubling 2degrees’ 4G capacity “as we go along”.

Aue said the company would get an advantage from having waited to join Spark and Vodafone in the 5G market.

“What we’re building today will be far more advanced than what any telco could deliver a year ago,” he said.

“In the past 18 months there have been significant advances in the 5G ecosystem and our 5G build is poised to capitalise on that.”

Vodafone NZ has partnered with Finland’s Nokia for its 5G network, while Spark has used network equipment from both Nokia and Samsung to avoid reliance on a single vendor.

2degrees warned in 2018 that it could incur extra costs if it had to switch vendors for 5G, as it would need to duplicate or replace some of its core network and might not be able to install new 5G gear separately alongside its existing Huawei 3G and 4G radios on all of its towers.

However, its hand was effectively forced last year when Huawei gave up on any attempt to have its 5G equipment certified for use in New Zealand by the Government Communications Security Bureau.

Aue said some of its Huawei equipment was now 11 years old and “probably due for replacement anyway”.

Sharrock said it was investing in what was essentially a completely new mobile network in the main centres, with work on a new “core” already well underway.

“We are actually building almost a brand new network with Ericsson that will bring up-to-date 4G and 5G technology to every site and the old network will be shut down.”

However, 2degrees would continue to use Huawei equipment on the 1100 or so cellsites that it has no current plans to upgrade.

Some of the Huawei equipment it would remove from city centres could be deployed elsewhere, Sharrock said.

Huawei had been “an excellent partner over many years” and 2degrees would continue to work with it in areas where it wasn’t yet introducing 5G, he said.

2degrees revealed last month that its majority owner, Trilogy International Partners, was considering selling down its stake in the company through an initial public offering on the NZX later this year, in a move that would also raise fresh capital for 2degrees to accelerate its investment in 5G.

Aue said that process was still being worked through and there were no further developments to report.

“We remain really excited about the exploration of it,” he said.

Emilio Romeo, head of Ericsson Australia and New Zealand, said in a statement that it was delighted to be chosen to supply 2degrees’ new 5G radio network and core.

“We’ve come to know 2degrees, its team and its ambitions well in the process leading up to today’s announcement,” he said.

“It’s exciting to work with a challenger brand and a telco that is growing its market share at pace.”