The state of Australian 4G

The state of Australian 4G

Summary: It has been over a year since 4G services landed in Australia, and less than one in 20 Australians have tried out the new technology.


The road ahead

While 1800Mhz is working wonders today, growing traffic demands require more spectrum in lower-frequency bands. This sets the stage for the auctioning off of the "waterfront" digital-dividend spectrum in April 2013.

Spectrum freed up from the switch-off of analog television signals by the end of 2013 is ideal for LTE networks. The 700MHz spectrum will offer telcos the ability to carry their LTE traffic farther across Australia's vast landscape, while the 2.5GHz spectrum will allow the telcos to deploy extra capacity in high-density areas, such as CBDs.

Optus and Telstra have both said that they will be participating in the auction, but Vodafone recently suggested that it may skip it, and instead rely on its large spectrum holdings in the 1800MHz spectrum.

This poses a potential threat to the expected AU$4 billion in revenue that the government was hoping to get from the auction, with Communications Minister Stephen Conroy stepping in to overrule the Australian Communications and Media Authority (ACMA) to set a reserve price on the spectrum.

A recent Commonwealth Bank Global Markets Research analysis of the spectrum auction described the minister's decision as a "disappointing development" that would likely push up prices, but said that telcos would be willing to pay a higher price to obtain the spectrum.

"With the forthcoming digital-dividend spectrum auctions providing a once-in-a-decade opportunity to access beachfront spectrum real estate, we see little risk of the carriers walking away, even if prices are higher than hoped for," Commonwealth Bank analyst Alice Bennett said.

The Commonwealth Bank estimates that Telstra will spend around AU$2.7 billion for its slice of spectrum, while Optus will spend AU$900 million. The analysis doesn't rule out a bid on spectrum from Vodafone, provided that the reserve pricing isn't too high, and said that it would likely acquire AU$350 million worth of spectrum.

Optus' "chief nerd" Ottendorfer said that while the spectrum auction won't play an immediate role in the company's 4G rollout plans, it will examine what products are in the market that can use that spectrum down the track.

"The chipsets are developing really fast. I'm the chief nerd of this company, and I am trialling everything as it comes out. I am pretty optimistic that the chipsets won't disappoint us," he said.

Wright said that there needs to be more devices using the 700MHz spectrum developed for the Asia-Pacific region by the time the spectrum is available.

"Ideally, we would have the devices manufactured and in market before the networks are built. That's not always a luxury we get, but that would be an ideal outcome," he said. "It's really a matter of getting device manufacturers to see that there is interest and scale that people will buy them."

"I'm the chief nerd of this company, and I am trialling everything as it comes out. " -Günther Ottendorfer

Customers with existing handsets will likely be at the point where they will be upgrading, so the rollout of LTE in the new spectrum bands won't make much difference, Wright said.

"Yes, there will be a device changeover, but I don't see it as a make or break for a customer, because, say, if they've got an 1800MHz device, it will continue to work OK," he said. "We'll just need to see what the network rollouts are like when we decide on the 700MHz network layer."

The last major hurdle for 4G will be global roaming. The telcos are also beginning to investigate global roaming on LTE, and several trials have been conducted in parts of Asia to test out roaming on LTE between countries. Wright said that coming to an agreement on LTE roaming is easier for existing roaming partners.

"It will be one of those things where operators had existing 3G agreements in place, and those are just upgraded to 4G."

Topics: 4G, Telcos, Optus, Telstra, Australia


Armed with a degree in Computer Science and a Masters in Journalism, Josh keeps a close eye on the telecommunications industry, the National Broadband Network, and all the goings on in government IT.

Kick off your day with ZDNet's daily email newsletter. It's the freshest tech news and opinion, served hot. Get it.


Log in or register to start the discussion