Australia Starts To Roll Out 4G!

[iang]

Good call on 4G

by STEPHEN BARTHOLOMEUSZ (reported in the Independent - 26 May 11)

IT WOULD be easy to regard the switching on of the first phase of Telstra’s Long Term Evolution, or 4G technology, yesterday as purely a technology upgrade. In fact, the upgrading of Telstra’s Next G network is highly strategic.

Telstra has switched on its first 4G base stations in Sydney, Melbourne, Perth and Brisbane and will now continue to roll out the network to other cities and regional centres. Initially the network is focused on the CBDs, allowing more data to be delivered more quickly.

The key initial strategic benefit of the roll-out, however, is not just that it will facilitate faster data speeds, but that it will release capacity on Next G’s original 850MHz spectrum by shifting big licks of data usage to the 1800MHz band.

Telstra stole a very significant technology edge over Optus and Vodafone when it originally launched the Next G network, with far better speeds and coverage just in time for the explosion in data usage ignited by the advent of the smart phone era.

Optus has since been spending about $500 million a year on its wireless network to close that gap while Vodafone was caught unprepared for the rate of growth in data usage and has suffered enormous brand damage, and losses of customers, because of its network quality degradation.

The $1 billion Telstra has thrown at the market to improve customer service and to make its offers more price-competitive has turned out to be well-timed. The rate at which smart phones have penetrated the market, its own more competitive offerings and Vodafone’s well-publicised problems, have resulted in explosive growth in its customer numbers.

Telstra obviously hopes and is planning for a continuation of that trend. While the take-up of 4G services themselves is likely to be slow – initially Telstra will only be able to offer wireless broadband dongles while it awaits the dual mode handsets that will be needed to offer the full range of wireless products – the key early benefit and the strategic rationale for the decision to turn on the technology at this point is the release of 850MHsz spectrum capacity.

That means Telstra can accommodate the tide of new customers and the continuing surge in data usage without the congestion issues that overwhelmed Vodafone.

Optus has been trialling LTE and Vodafone has said it plans to launch its service later this year, but Telstra’s launch will help it protect the technology edge it gained when it built Next G, as well as creating the capacity to cope with growth in customer numbers and data usage.

LTE offers Telstra the eventual ability to promise (and cope with the response to) faster speeds and, if it wishes, lower costs.

In the meantime, creating the ability to cope with the flood of new smart phone and wireless broadband customers and the leveraged impact of their demands on its network will enable Telstra to protect the performance and reputation of its wireless network and the competitive advantage that the integrity of the network provides.

www.businessspectator.com.au

[bonobo]

Not Thai-related.

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