A deliberate rebalancing, not a technical shuffle
Cabinet’s June 2026 decision to reshape how New Zealand’s mid-band mobile spectrum gets distributed is being sold as a competition measure, and for once the framing is honest. When the 2300 MHz and 2600 MHz management rights come up for renewal, Spark and One NZ will keep only around 70% of their existing holdings, with the freed-up capacity redirected. The centrepiece is 30 MHz in the 2600 MHz band offered directly to 2degrees, with up to 20 MHz in the 2300 MHz band reserved for defence and whatever is left going to auction in 2027.
Communications Minister Paul Goldsmith framed it explicitly as a move to boost competition. That is the correct call, because the market has run on a de facto two-tier structure for years.
Why 2600 MHz is the band that matters
This is not abstract regulatory plumbing. The 2600 MHz band is the workhorse of high-capacity mobile data and 5G. Before this decision, 2degrees held zero 2600 MHz spectrum. That gap was not cosmetic. When the Commerce Commission examined One NZ’s purchase of Dense Air New Zealand in early 2024, its statement of issues warned the deal could “prevent, inhibit or hinder the ability of 2degrees to compete” with the two incumbents.
The Commission ultimately cleared that acquisition in May 2024, which handed One NZ management rights to 2 x 35 MHz of 2600 MHz spectrum expiring December 2028. But it flagged a problem it could not fix through the merger process itself, noting the only competitively effective remedy was allocating more spectrum to 2degrees. The Cabinet decision is the government doing precisely that.
The asymmetry has deep roots
The imbalance goes back to the 2014 auction, which raised $249 million for the Crown. Spark paid $149 million, Vodafone NZ $66 million and 2degrees just $44 million, a spread that tracked the holdings gap that has persisted ever since. Commercial auctions for the remaining spectrum are now slated for 2027.
The incumbents are not happy, and their case isn’t hollow
Spark warned the direction “introduces uncertainty for the telecommunications sector at a time when sustained, long-term investment is critical” and could hit the timing of network investment, including in regional New Zealand. One NZ spokesman Matt Flood said the proposals “introduce uncertainty given how essential spectrum is to run and operate mobile networks”.
One NZ chief executive Jason Paris had made the investment argument in May 2026, before the decision landed, saying “spectrum is the lifeblood of a mobile network” and that the case for investing in next-generation technology “is getting harder to make unless the broader settings support long-term returns.” These are legitimate concerns. A 70% renewal rate does shrink the asset base the incumbents can plan against, and rural build-out is the obvious pressure point to watch.
There is also a serious economic counter-argument. In March 2024, NERA Economic Consulting argued that “asymmetries in spectrum holdings are not negative per se” and found that against international peers, 2degrees was actually overweight on a spectrum-per-market-share basis. The government has weighed those views and chosen structural intervention anyway.
What it means for your connectivity bill
The honest catch is that competition is not free. The government itself conceded that “costs associated with obtaining spectrum management rights may be passed on to consumers”, and the 2027 auction will set what 2degrees and others pay. There is also a useful carve-out of up to 50 MHz of 2600 MHz spectrum for regional wireless internet providers, the WISPs that keep farms and rural firms connected where the big networks don’t bother.
For businesses running mobile fleets, IoT deployments or field workforce connectivity, the payoff is medium-term rather than immediate. The new rights won’t be allocated until 2027 and network build-out takes years beyond that. But a 2degrees with genuine 5G mid-band capability changes the negotiating dynamic on wholesale and retail pricing in a way the market hasn’t seen since 2014. When you next review a connectivity contract, price in the prospect of a third player that can actually push back.
Sources
- Goldsmith allocates mobile spectrum to 2degrees to boost competition (2026-07-01)
- Telcos caution Government plan to auction radio spectrum could hit network investment, consumers (2026-07-02)
- Future allocations of 2300 MHz and 2600 MHz spectrum (2026-07-02)
- Regulator juggles ‘theories of harm’ in One NZ’s planned Dense Air buyout (2024-02-05)
- Determination on One New Zealand and Dense Air merger clearance (2024-05-02)
- One NZ calls for long-term telecom investment policy (2026-05-27)
- NERA economic report in response to Statement of Issues (2024-03-05)