4G 'bragging' for Optus, survival for rivals

Summary:In a world where chief executives are often circumspect when attacking rivals, it's always illuminating to hear a telco CEO bagging their competitors' visions. Yet O'Sullivan's view that Telstra and Vodafone were only announcing long-term evolution mobile plans for the bragging rights makes me think he may need to see an optometrist.

In a world where chief executives are often circumspect when attacking rivals, it's always illuminating to hear a telco CEO bagging their competitors' visions. Yet O'Sullivan's view that Telstra and Vodafone were only announcing long-term evolution (LTE) mobile plans for the bragging rights makes me think he may need to see an optometrist.

It was at Optus' end of quarter results briefing that O'Sullivan claimed that Optus rivals have announced plans to offer LTE-based 4G services by the end of the year mainly to "brag" — but that they're not going to have many customers on their networks any time soon because, you know, nobody actually wants 4G yet. This may be partly true, of course: there are basically no 4G-capable handsets available on the market now, so whenever those networks get commissioned they'll have a limited array of compatible handsets. Cue the usual trials and travails of new technology (cf 3G, 2G, iPhone, Windows Vista, etc).


LTE will help Telstra and VHA reassign customers to decrease pressure on evermore congested spectrum. (HOV lane mage by Rhobite, CC BY-SA 3.0)

The thing is: rolling out LTE isn't about phone calls so much as about redirecting some of the increasing burden that mobile data is imposing on carriers to a separate bandwidth space (the 1800MHz range previously used by 2G GSM services) where it will ease the demands on straining 3G networks. You know, like the one that has brought VHA to its knees and forced it into a hell-for-leather network upgrade to save its bacon while it still has any customers at all.

VHA needs to make its network right, and fast — and LTE is a promising way of doing that by at least allowing it to target heavy bandwidth users for upgrades to a faster 4G service. If the telco could shift its dongle-wielding customers away from its mainstream 3G network onto a 4G space optimised for data, things would improve on both sides of the fence. It's the wireless equivalent of reducing freeway congestion by adding dedicated transit lanes for vehicles with multiple occupants.

Rather than calling BS, Optus really should be taking notes: as people who actually use mobile services have known for a long time, its coverage is often little better than VHA's. I was reminded of this on Friday when, sitting in a shop in the inner-Melbourne suburb of Hawthorn, I not only lost 3G reception but was having to move around the room to get more than one bar of 2G coverage — or even any coverage at all.

To call [VHA's] race to 4G an attempt to "brag" hardly seems right. VHA isn't investing in 4G to brag; just as it recently modified its wireless-only dogma by signing up as an NBN Co customer, it's investing in 4G to survive.

More than half a decade after 3G services commenced, that's hardly the kind of result you'd expect — but Hawthorn isn't alone. Blackspots persist all over our major cities, and rural coverage remains patchy at best. And whether this is due to inadequate physical coverage or just a steadily-raising bar of normal usage, should not matter: the average punter just wants his phone to work when he turns it on, and it's carriers' responsibility to make sure that happens.

Since this has not been happening for so many Vodafone customers, to call its race to 4G an attempt to "brag" hardly seems right. VHA isn't investing in 4G to brag; just as it recently modified its wireless-only dogma by signing up as an NBN Co customer, it's investing in 4G to survive.

Ditto Telstra, which is so committed to pushing 4G out soon that it's forming its own 1800MHz LTE industry association. Sure, Telstra has been known to brag every once in a while — about its network coverage, network speed and so on. But unlike Optus and Vodafone, Telstra faces a recurring threat in the form of the Labor Government's attempts to frogmarch it into separation: if it doesn't get with the program soon it will, theoretically at least, lose the right to buy the "digital dividend" 700MHz spectrum when it comes up for auction in a couple of years.

If Telstra can successfully build an alternative in the meantime, bully for it. Right now, there is so much uncertainty around next-generation spectrum right now — with emergency-services operators fighting for it, Optus predicting a spectrum "bunfight", CSIRO muscling in, and ACMA warning of a major shortage by 2020 — that it would be silly for Telstra to not move to protect its interests.

And that, at this point, involves utilising the spectrum that it does have, in the best way possible. It also appears to involve stalling its negotiations with the government for as long as humanly possible while building out its own network and sewing together the panels of its golden parachute. If Telstra plays its cards right, Labor will get thrown out for non-delivery at the next election and Telstra will have both a vertically-integrated business combining decrepit fixed network and 3G/4G wireless — but that's another story.

Optus could be doing the same, but instead its latest major announcement is that it will invest $25 million — count 'em, $25 million — to bring competition to many Tasmanian towns where Telstra remains the only wireless option. Oh, and build lots of Optus-branded stores in these towns. This is a great move for Tasmania, of course (the coverage, at least), but one wonders why it took so very long — and why it will take Optus 24 months to roll out 80 mobile sites in Tasmania when Vodafone is planning to upgrade 8000 sites across its entire network in just 18 months.

One also wonders whether the new services Optus is installing will be upgradeable to LTE with some ease — the strategy being pursued by its rivals — or whether it will, when it finally gets around to doing 4G too, have to start again and overbuild its existing 3G network.

This is a great move for Tasmania, but one wonders why it took so very long — and why it will take Optus 24 months to roll out 80 mobile sites in Tasmania when Vodafone is planning to upgrade 8000 sites across its entire network in just 18 months.

Yet these are fine details. In attacking its rivals' 4G ambitions, Optus sounds dreadfully like those short-sighted naysayers who argue that we don't need the NBN because nobody needs 100Mbps speeds now; that, of course, is not the point. And while it's all well and good for Optus to focus on slowly filling out its coverage in Tasmania and the many other blackspots in its network, for it to dismiss its rivals as bragging because they're actively investing in next-generation mobile services is a bit rich (on this note, kudos to Vodafone for launching a coverage tool that shows just how appallingly bad its network is — and will still be once its network upgrade is complete).

Telstra has its own unique operational and organisational pressures, as does VHA and they are both right to accelerate their next-generation services roll-outs in any way they can, if they think it will offer customers new options, better coverage and improved services across the board. Heaven knows they couldn't get any worse.

Is O'Sullivan right about his rivals? Are 4G services premature? Or are they just what the doctor ordered to improve patchy mobile performance all around?

Topics: Telcos, Networking, Optus, Telstra

About

As large as the US mainland but with a smaller population than Texas, Australia relies on ICT innovation to maintain its position as a first-world democracy and a role model for the developing Asia-Pacific region. Award-winning journalist David Braue has covered Australia’s IT and telecoms sectors since 1995 – and he’s as quick to draw le... Full Bio

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