Promise or not, Telstra 4G targets landline

Promise or not, Telstra 4G targets landline

Summary: Telstra may have agreed not to market its wireless services as competing with the National Broadband Network (NBN), but that doesn't mean that it's beyond letting customers draw their own conclusions.

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Telstra may have agreed not to market its wireless services as competing with the National Broadband Network (NBN), but that doesn't mean that it's beyond letting customers draw their own conclusions.

As the company finally wholesales its Next G wireless services and pushes LTE live months before it originally expected to, it's clear that its managers are launching an all-fronts offensive on the NBN just weeks before its pivotal shareholder vote — and that there is a much larger endgame at play here.

MVNOs will finally get their Next G cake and eat it, too; Telstra has already moved on to the croque-en-bouche.
(Credit: Simon Lee Bakery, CC BY 3.0)

The first part is hardly surprising; Telstra must, of course, put its best foot forward to convince shareholders that it has a future in the absence of the landline network that it's giving up in its NBN Co deal.

The rapid fibre-isation of its South Brisbane exchange — and the parade of ISPs (eg, iiNet, Internode and TPG) grudgingly signing up to access it — was a chance for Telstra, in an homage to Cher perhaps, to show its competitors that it's not past knocking 'em dead in the aisles despite the advancing years. It may not be building its own nationwide fibre local-access network, but — you know — it could. This is likely a precursor for a broad greenfields fibre presence to compete with NBN Co's, as well as a warning that the NBN is proceeding because Telstra has allowed it to do so.

Then there are its moves to wholesale Next G, which has opened up great opportunities for third parties to piggyback onto the network, just as they have done so on the networks of Optus and Vodafone. It's a masterstroke for Telstra, which has hoarded technically superior Next G for years, and bemusedly watched as rivals chased mobile virtual network operator (MVNO) customers that swamped their networks with traffic. Now, Telstra will let the masses eat their cake; it has moved on to the croque-en-bouche.

The sinister part — but there is more to this move than Telstra keeping ahead of its wireless rivals. As I mentioned, the LTE network is a direct shot at the NBN, done indirectly. Just consider the structure of the announcement released today, which includes references to "superfast" speeds, and the obligatory qualifier "when on the move" from David Thodey.

Yet, scan down to paragraph six, and something sounds a bit strange. Sure, wirelessly connected sports photographers would be a logical application for 4G. But video producers "handling larger files on the go"? A regional doctor who has "increased the quality of his medical images, thanks to the increased bandwidth available over 4G"? Seriously?

This is the same kind of marketing committee-driven BS that NBN opponents accuse Stephen Conroy and his peers of peddling.

This is the same kind of marketing committee-driven BS that NBN opponents accuse Stephen Conroy and his peers of peddling. Either Telstra is making a play for the landline market, or it's encouraging video producers to transfer gigabytes of files while in their cars — and medical specialists to start treating patients outside of their very fixed clinics.

We all know that marketing people can get a bit creative and abstract when trying to think of use cases, but I'd say, at a glance, that two of the three examples that Telstra has given are directly targeted at landline-replacement applications.

The company will deny it until it's blue in the face, of course; it has to. But bandwidth-starved customers will ultimately weigh up these solutions as alternatives to the crap fixed-line services they're already getting. Note that Telstra's launch also covers 31 regional areas, where consensus is that fixed-line services are especially, not to mince words, crap.

Colour me silly, but if I were a resident of, say, rural Horsham, Victoria, stuck with awful ADSL2+ services and given the chance of buying a Telstra 4G service, or waiting for the NBN roll-out to come my way in two or three years — well, I know what I would choose. Telstra knows this, too, which is why it has gone hell for leather to get its 4G network live.

Does all of this prove the long-floated theory that wireless is a replacement for fixed services, and that the NBN is therefore unnecessary?

Of course not. Regardless of what the fans of DIDO might believe, for now there are still very real limitations on the capacity of fixed or mobile wireless — and those will continue to support the case for the NBN. No matter how good LTE is, there will always be capacity and availability constraints that make it not entirely suitable for many applications. But it's here now, and that counts for something.

David Thodey knows this and, most worryingly for the NBN, he also knows that Telstra isn't entirely out of the fixed game yet. He would not otherwise risk his recent warning that Telstra could well pull out of its NBN Co agreement if the ACCC continues to knock back its structural separation undertaking (SSU).

Despite the NBN Co-friendly campaign by Telstra's board to convince shareholders to vote in favour of the NBN Co deal, despite Thodey's assurances to the contrary and despite whatever he may have told Stephen Conroy — Thodey, in this one statement, proved that he's still not beyond using Telstra's still-considerable heft to pull the rug out from under the NBN effort. He, and not the loudmouth but toothless Opposition, is still the NBN's puppet master.

Telstra will destroy NBN Co in ways that Malcolm Turnbull could only dream about.

Telstra has a history of subtle manipulation: remember its woefully inadequate NBN tender response back in 2008, which was the impetus for the entire current NBN as we now know it? That was designed as a shot across the government's bow — a way of reminding the government of the day that Australia's telecoms environment will move at whatever speed Telstra wants it to, thank you very much.

Ditto for the long delays in signing Telstra's NBN Co agreement, which has forced NBN Co to revise its roll-out timeframes time and again — and opened the Labor government to even more haranguing from the Telstra-loving Opposition.

In the meantime, Telstra bought itself enough time to fast-track the roll-out of a 4G network that would give it enough coverage to position itself as the landline competitor that isn't. But, you know, is.

Telstra will use its LTE network in a sort of technological guerrilla warfare that will destroy NBN Co in ways that Malcolm Turnbull could only dream about. It promises 50 additional LTE sites by the year's end — and I'm sure they'll include every town where NBN Co is about to launch its own wireless. Adding insult to injury, Telstra will boost revenues and steal wholesale customers from Optus and Vodafone as MVNOs flock to Next G and Thodey plays his violin while watching the flames below.

These things are no accident. Can the timing of Telstra's 4G launch, bolstered by growing chest beating, and warnings that Telstra could delay the NBN even more by sending the government back to the drawing board on separation, be any less? Thodey may have signed on the dotted line, but his comments about the SSU confirm that if things don't go Telstra's way, NBN Co could very well find that he was using disappearing ink.

Does Telstra's 4G launch satisfy your need for a landline? Has the company invalidated the NBN? Or is this a necessary stopgap until the NBN can arrive to do next-generation communications properly?

Topics: NBN, Broadband, Telcos, Telstra

About

Australia’s first-world economy relies on first-rate IT and telecommunications innovation. David Braue, an award-winning IT journalist and former Macworld editor, covers its challenges, successes and lessons learned as it uses ICT to assert its leadership in the developing Asia-Pacific region – and strengthen its reputation on the world stage.

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Talkback

21 comments
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  • 3g's getting long in the teeth - it was launched on 2007 - that’s 4 years of advancements - why would you still want to use something that has been superseded by a faster and 'better' network?
    amckern-b0f83
    • If you lived in the 4% of regional Australia whose only broadband options are satellite or Telstra's hideously overpriced 3G, you would be ecstatic that outdated 3G is going wholesale and can be taken up by the good guys like Southern Phone. We will never, ever see NBN out here
      liz.d
      • liz.d, I don't doubt that you currently have lousy service and options where you are now, but what makes you see you will never see the NBN where you are?

        If you don't live within a township of around 1,000 or more, then it would be true to say that NBN fibre will probably not be rolling out. But NBN fixed wireless, and for the most remote 3%, NBN high-capacity satellite (launching 2015) are definitely coming, and will almost certainly go ahead regardless of a change of government.

        If you don't mind my asking, what general region are you from?
        Gwyntaglaw
  • Um, its kinda not landline chasing, the fact that Telstra has finally started to make some attractive mobile phone offers after decades of over priced packages (based on the fact it has the only truely regional wireless network). It knows that it will get $3000 per customer it loses when NBN rolls out, so, it can afford to roll out sooner and cheaper with the view it gets back any small term revenue loses when its sells its customers back to NBN.
    twocentsworth
  • As we are perenial renters and in lieu of a ubiquitous NBN, which will not be around for a few years in Sydney, we will be getting an LTE device as soon as we can. Wireless would be a non starter for our non-portable broadband if the NBN were in place.

    We have been wireless since coming to Sydney five years ago, first with iBurst (online within 24 hours of arriving), 3 via Dopods, then Bigpond 7.2, Elite and current Ultimate devices. With NextG, we get better uploads speeds than we would ever get with ADSLx, and that is important for our business.

    Therefore, for anyone trying to run a home-based business, the Telstra LTE device represents a workable alternative until 'real' broadband (aka NBN) arrives, and it is no more expensive than the Ultimate devices.
    Patanjali
  • From the viewpoint of people in the well-serviced regions of Australia (e.g: Victoria and NSW), the broadband debate may seem to be NBN vs Telstra. Everywhere else, however, it is about NBN vs nothing. In so-called 'regional Australia', Telstra offers only the most pretend of services. I live in the Darwin metropolis, and here, my 3G service is less than dial-up quality. So why should I whether Telstra runs to 4G, 5G or 27G? If Telstra is running it, it will ALWAYS be rubbish out here!
    Arafurian
    • I have to agree, these so called 'regional Australia' places that tend to get talked about, etc... are Eastern States regional areas, here in Western Australia, even in Perth or lower-southwest where i live, 3G internet speeds are rather crappy, i would have better luck with dialup than i would with Telstra NextG.

      Telstra finally installed a new tower in our town, and sure enough i can now get mobile reception in the house, but the mobile broadband speeds are still rather crappy.
      ray73864
  • 4G/LTE is no enemy of the NBN - David Thodey has made it perfectly clear that the services are complementary, and he would prefer that customers sign up for both.

    Well, of course he would! Follow the money, and it's clear that Telstra (like every other telco) can see a future where they can get cashflows out of both mobile and fixed-line services. It's what I do now, and will continue to do so, along with many other customers.
    Gwyntaglaw
  • I've got to say this is a great moment for people who require broadband on the move or in places where fixed lines are not available... It would be nice if they gave use a real coverage map so we could work out exactly what is covered... It would be good to test it against adsl2+ Our RIM seems to get full most afternoons as companies in our area do back ups and it would be good to see how VoIP would go over this network since it has low latency. The application for this are huge... Can't wait to start testing. When will there be a review up?
    schneider82
    • Select the hi res coverage map to see LTE details, like that Parramatta is fully covered.

      I had thought that only 5km from the CBD is covered, but they do have this second CBD covered.
      Patanjali
  • Your retarded if you really think people will drop their ADSL2+ for 4G wireless garbage as some argument against the NBN.

    unless you got horrible sync speeds, (less than 5 megabits) youd be a fool to drop it for 4G. once again wireless technologies are a compliment to real cable. whether its copper or glass.
    enhanced
    • Unfortunately for ADSL, LTE trounces it for upload speeds, which makes LTE almost a no-brainer for small businesses.

      Besides the fact that two km out from an exchange, ADSLx is worse for download speeds than NextG.
      Patanjali
  • In the NBNCo Corporate Plan it is predicted that 50% will connect at 12/1Mbps (e.g. cheapest plan), at a cost of ~$55/month. Telstra have correctly identified that if they can offer a cheaper service that has comparable speeds, then they have a reasonable shot at poaching some of that 50%. The effect on NBNCo will be to reduce the number of customers that the build cost can be shared across. To deliver the government's 7% return, NBNCo will not be able to reduce prices for higher speeds and data like planned.

    If Telstra play their cards right in many areas by the time the NBN arrives they will have sewn customers up on "faster" and cheaper NextG plans.
    mathew42-bc1ae
    • There are two major arguments against that:

      1. Congestion. At peak times, even the best wireless service yet designed will experience slow-downs due to congestion. And while the bar is raised with 4G services, you still can't get around the fact that bandwidth is limited, and an evening on the net is sloooooow time.

      2. Download quotas. For occasional users, they might be perfectly happy with small quotas. But for everyone else, you run out of quota much faster with high speed wireless than any other way - and then it gets very pricey indeed. When you compare wireless with fixed plans, same quota, the fixed-line plans are invariably cheaper - especially when you get to 50-100GB or more per month.
      Gwyntaglaw
      • For your information Telstra based wireless services run the shaped quota schema that they also use for fixed broadband - you reach your quota and you get shaped to 64kb/s - no additional download chargers.
        amckern-b0f83
        • Yes, but how is shaping to 64kbs a good outcome? I mean, you can hardly call it "broadband" at that speed.

          The point is not whether shaping does or doesn't occur - but how much you pay.

          The biggest mobile broadband plan only gives you 15GB of quota - and that costs $99.95 standalone ($79.95 if you also buy other bundled services).

          In contrast, for similar amounts, you can get a 200GB FIXED LINE broadband ($69.95 bundled, $99.95 standalone) or 500GB ($89.95 bundled, $119.95 standalone).

          So, 15GB vs 200GB or more. That's a bit of a major difference for the same or similar money.
          Gwyntaglaw
        • 64kbps, now that is broadband!!!!!

          wow.
          evilsync
          • 64k is ISDN 1 speed (and is a massive 8k faster than v54) - '''sarcasm'''

            Iinet shape to 256k, that’s like old school ADSL 1 - and still I don’t call that broadband.
            amckern-b0f83
    • "In the NBNCo Corporate Plan it is predicted that 50% will connect at 12/1Mbps"

      False.


      "To deliver the government's 7% return, NBNCo will not be able to reduce prices for higher speeds and data like planned."

      Mike Quigley and the NBNco corporate plan you are unable to read say you are wrong.
      Hubert Cumberdale
  • If Telstra can afford wholesale pricing, perhaps it should lower its retail pricing to those levels and forget about wholesaling its Next G product. The same customers will still flow to them without the need to deal with resellers and their whinging, (Internode and iiNet come to mind).
    Frank2-fbb3b