Telstra sure has a knack for raining on its competitors' parades. Just days before vividwireless offered a tantalising glimpse at a new wireless network that beats competitors' network speeds by up to a factor of ten, Telstra comes out with the news that it will start trialling fourth-generation LTE (Long Term Evolution) mobile technology in May.
The announcement will have come as welcome news for consumers, who love their wireless broadband and are likely to get even more excited about a potential ten-fold speed bump over Vividwireless' WiMAX services. Not that we really need it, mind you: even a solid signal of a few megabits per second would be more than enough to smoothly stream video to handheld devices — including large-screen ones like the upcoming iPad, which will no doubt get an LTE upgrade.
Given Telstra's animosity towards vividwireless over its network speed claims late last year, it's hardly surprising that the carrier would be seeking to steal the Seven-backed start-up's thunder with announcement of a much faster technology. As a heavily content-focused player, Telstra will be doing many of the same things with its online services and Foxtel stake that Seven is in a unique position to do with vividwireless. Consider its LTE announcement an effort to discount Seven from the get-go.
Yet Telstra's endgame is much larger than that. The company isn't the only one to jump into LTE. It's actually late to the game, at least if we're going by the dates on the press releases. Last November, Optus announced that it would be trialling the technology this year as part of a SingTel-backed effort spanning various Asia-Pacific carrier subsidiaries. And VHA, with roots in two of the world's largest mobile multinationals, can't be too far behind. Heck, O2 in the UK noted successful trials in December and Sweden's TeliaSonera went live with LTE in December.
Ah, Sweden. That bastion of progressive telecommunications policy and catchy pop tunes. One suspects LTE will rate well there, and everywhere else. However, bringing LTE to fruition will take time as carriers are a long way from finished with 3G. A recent Ovum analysis predicted intensifying competition in 3G will typify the market for the next few years, with 3G accounting for 68 per cent of mobile connections by Christmas and 94 per cent of connections by 2014. And it's only around 2014, Ovum believes, that LTE will come into its own as the digital dividend spectrum from the analogue TV shutoff provides ample space for broad LTE roll-outs.
A working, extensive LTE network would be a viable replacement for copper and an alternative to FTTP in ways the WiMax-based Opel network would never have been
So, is all this bleating about LTE now just hot air? Can Telstra sideline WiMax by promising bigger, better, faster, more — as it did when the Optus-backed Opel WiMAX deal was, for a short time, official government policy?
Given that vividwireless is offering a real commercial service now rather than several years from now, perhaps not. But, as is so often the case with Telstra, there is definitely a show of defiance going on: LTE is just another stage in Telstra's campaign of defiance and undermining, which has threatened Stephen Conroy politically even where it has failed to stop the NBN.
Consider that a working, extensive LTE network — with real-world speeds that have already reached 150Mbps — would be a viable replacement for copper lines and an alternative to FTTP in ways the Opel network would never have been. The net result would be that Telstra could deliver triple-play services to customers in much the same way Seven is doing with Vividwireless: without the intervention (and wholesale pricing issues) of third-party interlopers.
In Telstra's case, the main interloper is NBN Co, which is intensely focused on retiring the copper network and this week got some help in that respect as Telstra announced it will no longer be installing copper-loop connections in new, fibre-ridden housing developments. Of course, Conroy loves this, having introduced the idea in legislation as a clear push to make sure new houses are NBN-ready.
But the NBN won't be ready until a few years from now. In the meantime, since Telstra won't be coming to the game either, residents of those houses will just need to rely on their mobile phones if they want to call someone.
To suggest that Telstra isn't watching its Swedish counterparts closely would be hopelessly naïve: TeliaSonera has turned to LTE as a remedy for the pain of separation, and it's in a stronger position because of it.
Or they could set up a fixed wireless network as a replacement. With LTE due around the middle of the decade and the NBN set to reach the capital cities around the same time, Telstra can dispatch hordes of salespeople to beat the NBN to customers' doors. Offering them competitive, comparably fast services based on an LTE-equipped landline replacement — well, that doesn't bode well for Conroy's dream.
Neither does the strategy of TeliaSonera, which several years ago quietly gave in to pressure for separation and is now leading the world in high-speed wireless services. To suggest that Telstra isn't watching its Swedish counterparts closely would be hopelessly naïve: TeliaSonera has turned to LTE as a remedy for the pain of separation, and it's in a stronger position because of it. In the meantime, however, Telstra will continue to vehemently oppose separation, and buy time parrying competitive efforts as it sees fit.
Such is life in the competitive market that is wireless telecommunications, of course. And this is what Conroy needs to learn, deep in the very depths of his heart: wireless is a bigger threat to the NBN than Telstra's disused copper network, which is slowly rotting away even as you sit here reading this. Conroy can regulate the last mile to his heart's content, but a fast wireless competitor could devastate the NBN's shaky business case — and leave Conroy with none of the regulatory controls he enjoys in the fixed sphere.