Can Vodafone close the rural 3G gap?

Summary:Optus, Vodafone and Three have long struggled to match Telstra's reach outside the capital cities. Vodafone's major network upgrade is the best chance yet to dilute Next G's rural monopoly, but questions remain.

One of the great differentiating factors of Telstra' Next G mobile network has been its coverage, which has long been portrayed as reaching nearly all Australians and certainly seems to consistently out-reach its competitors.

That all changed this week, however, as Vodafone officially went live with its latest major network expansion — a fast and furious investment in mobile infrastructure that the company claims has boosted its reach from 80 per cent of the population to 94 per cent.

Signs are that the investment has paid off in some very real ways: a recent anecdotal report I read suggested that the Vodafone network offers "perfect" coverage down in Airey's Inlet, a Great Ocean Road town that has not exactly been an epicentre of 3G. One imagines similar results in many of the places where Vodafone is now introducing coverage for the first time.

(Credit: Vodafone)

As with all things mobile, your mileage will of course vary. But as Vodafone finally gets serious about expanding its network — and uses that network to bolster its merger with Three — the long-delayed upgrade is significant for one very important reason. For the first time, after all, residents in newly-covered rural geographies have a choice of mobile service provider — a concept that has been completely foreign to many in the past due to Telstra's de facto status as monopolist 3G mobile operator.

As I've previously argued, the creation of VHA Australia will be great for mobile competition by finally creating a third carrier of which Telstra will be, if not perhaps mortified, at least ... aware. Even if Telstra doesn't rush into defensive mode regarding Next G, it's going to have to watch Vodafone's subscriber numbers with more attention. Yes, Telstra's coverage by percentage may be higher, but odds are that Vodafone's expanded coverage will tick all the right boxes for a growing number of subscribers. Either way, it is going to help transform a critical part of the nation's mobile infrastructure by providing much-needed choice.

Vodafone's network expansion isn't only about whether rural residents can get phone calls in their houses or across their vast properties; it's also about improving coverage over the country's highways and byways, ensuring that even those who live in the city can pick up their phones with confidence while travelling. In some cases, this may mean there is only coverage on a thin strip of road; while this may be an issue for residents, it's better for casual passers-through than simply getting dead air.

One suspects there may be at least a bit of under-ideal-circumstances loading behind the 94 per cent figure.

Analyst firm Market Clarity pointed out issues with the actual density of mobile coverage earlier this year with research suggesting that carriers' coverage figures are routinely overstated because they count a population area as being covered when only the CBD is covered. There's no real sign yet as to whether this is still the case given Vodafone's newly expanded network, although one suspects there may be at least a bit of under-ideal-circumstances loading behind the 94 per cent figure.

Either way, Vodafone's investment should be great news for rural Australians. Should the real-world coverage and performance of Vodafone's expanded network prove as good as it could be, Vodafone should get a great boost in its 6 million-plus subscriber base as its traditionally good-value mobile and mobile data plans gain currency.

This could propel the company to the kind of growth enjoyed by Optus, which has seen subscriber numbers surge past 8 million thanks to its wholehearted embrace of Apple's runaway hit iPhone.

Should Vodafone's network not prove up to scratch, the company can expect to be lambasted by Telstra marketing, which has pushed the network's purported speed and coverage as its key differentiators. It may also suffer the kind of ignominy that has beset Optus, which has struggled with repeated network outage and seems, with data volumes escalating, to have become a victim of the iPhone's success as much as a beneficiary of it. Customers are sure to weigh in loudly on the results of the network upgrade — but either way, Vodafone has taken a major step towards closing the long-standing mobile divide.

Do you live in a rural area? How does Vodafone's new coverage compare? Have you made the switch?

Topics: Telcos, Broadband, Mobility, 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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