2degrees gets in on 4G game with $165 million loan from BNZ

Telecommunications upstart 2degrees is preparing to take on Vodafone and Telecom on the 4G battlefront, rolling out a high speed mobile data network in early 2014 with the help of a $165 million cash injection from BNZ Bank.

Vodafone became the first network in the country to offer 4G when it launched its product in late February. Telecom is launching its commercial its own before the end of the year, meaning 2degrees might not be that late to the party. 

For more about the telco sector, sign up to the Idealog Tech newsletter

As the smallest of the three major telcos, 2degrees has been reliant on outside funding to build much of its network. The latest loan from BNZ allows the company to upgrade cellsites around the country. Company spokesperson Matthew Bolland says it's a relatively simple task because the existing network was designed to be upgraded to 4G with a software update and network card replacement.

The majority of the BNZ money will be used to payback a $120 million loan from Chinese vendor and 2degrees technology partner Huawei, which was used to upgrade the telco's network to 3G in 2011.

Like Vodafone and Telecom's 4G systems, 2degrees will initially use the 1800 MHz spectrum. The long term goal is to use the 700 MHz spectrum, but Bolland wasn't forthcoming about how much money is being set aside to purchase a block of that at auction later this year. 

Bolland says the move to 4G is timely for 2degrees as it's seen a three-fold increase year-on-year in customer data consumption. 2degrees cracked the 1 million customer mark last August.