Optus can level the 4G playing field

Summary:Optus could very well find itself able to match Telstra's wireless coverage for the first time ever.

Like many Australians, I recently took the opportunity to upgrade my wireless internet dongle.

My dongle had had its ins and outs, dutifully rising to the occasion when needed, and bringing great joy and happiness by getting me out of more than a few tight situations. There is, after all, nothing worse than being on a deadline and having your internet connection go down.

Horserace
Telstra and Optus are all but starting from scratch — but will Optus invest enough to stay neck and neck? (CC BY-SA 2.0 by Slooby)

Times change, however, and my trusty old Telstra blue stick has been replaced with a shiny new gadget that not only pulls in a 4G signal, but shares it with any device in the area. As long as I can keep it charged so it's ready when I need it, I envision years of happy, high-speed connectivity — at 3G speeds.

Well, I was originally imagining 4G speeds, since that's what it's sold as. But, so far, outside of an area that is measurably less than the 5km radius advertised by Telstra, I have yet to get an actual 4G connection. My home is sadly well outside of Telstra's 4G network radius, although, that doesn't actually matter since I only need the device when I am away from my home.

In the short term, however, it looks like I'll be using the same old 3G Next-G network that I've been using for the past two years. Better 4G coverage will come over time, of course — but I suspect that it will be a while before I can reliably turn on my new shiny 4G gadget and be guaranteed of it actually saying "4G".

I mention this not to pointlessly whinge about the slow progress of a massive network that's being built up as quickly as it can — I'll leave that to the Coalition — but to continue my contemplation of 4G, which has quickly become the aspiration for mobile carriers.

Lags in the delivery of Vodafone's 4G will be another nail in that carrier's coffin, excluding it from the first round of 4G adopters as they snatch up iPhone 5 and Samsung Galaxy S3, and throw in their lot with Telstra's or Optus' 4G fortunes.

The release of the 4G-capable iPhone 5, in particular, will put both Telstra and Optus through the wringer as they try to build a new network that can keep up with demand from a customer base that's already measured in the millions , just days after the device's availability.

Optus could very well find itself able to match Telstra's wireless coverage for the first time ever.

There is something fundamentally game-changing about the mobile race this time around. Telstra may have a lead on Optus, but it's far from unassailable, because, as I've found out first hand, even Telstra's 4G is only available in a small proportion of the country, when the wind is blowing in the right direction.

This is much different than the launch of Next-G, which took the industry by surprise as Telstra took the big-bang approach with an extensive and fast 3G network that basically clobbered the competition overnight.

It won't take much for Optus to catch up to Telstra's 4G footprint, and if the company can build up a hell-for-leather pace for its own 4G rollout (and keep up with surging demand that is already overtaking 3G in places like Hong Kong), it could very well find itself able to match Telstra's wireless coverage for the first time ever.

Optus knows this, of course, which is why it has done Telstra one better by actively promoting its 4G network to resellers like Internode and iiNet , as well as its own Virgin Mobile brand. This is a significant difference from Telstra's approach, which is to keep the good stuff for its own customers, and only — grudgingly — offer its 3G services to mobile virtual network operators (MVNOs) that favour Telstra's 3G coverage over the availability of Optus' 4G.

Things could play out differently … if Optus is able to not only build out its 4G coverage quickly, but spruik it through MVNOs …. to customers who have already indicated that they're not wedded to Telstra because they chose iiNet, Internode, or another provider as their ISP.

In other words, Optus is launching an all-out assault on the 4G market, and bringing all and sundry onto its network, in an effort to stake out its 4G claim. It's not dissimilar a strategy what Optus used when the iPhone was originally launched in Australia — Telstra, you'll recall, was less than exuberant about selling the iPhone, and Optus capitalised on its indifference to post some truly impressive subscriber numbers.

In the long term, Telstra's better 3G coverage has lured many of those customers back to its network. And this is where Optus has really let down its guard: instead of over-investing in its network to ensure customers had no reason to leave, it allowed black spots to emerge and remain unfixed. As Telstra lowered its prices to all but match those of its rivals, Optus was caught between a rock and a hard place; it had to temper its capital expenditure, and customers could find no reason to stay.

Things could play out differently this time around, especially if Optus is able to not only build out its 4G coverage quickly, but spruik it through MVNOs with hundreds of thousands of loyal Internet customers. The addition of cheaper 4G mobile services is a natural sell-through to customers who have already indicated that they're not wedded to Telstra because they chose iiNet, Internode, or another provider as their ISP.

The playing field, then, is level — for now. But if Optus allows Telstra to outpace its 4G rollout in these formative stages, it will once again cede the coverage advantage to its chief rival — and with it, any hope of giving customers a real alternative in the nascent 4G market.

How has your 4G been? Are you willing to give Optus a chance? Or has Telstra already stitched up your business because of its early, albeit limited, entry to 4G?

Topics: Telcos, 4G, 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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