Mining for OPELs, coming up with ... ?

Hopefully, you've been spending your end-of-year break better than the executives at Optus, who seem to have taken advantage of the annual industry-wide lull to get onetime WiMax aspirant Austar United Telecommunications to the negotiating table.

Hopefully, you've been spending your end-of-year break better than the executives at Optus, who seem to have taken advantage of the annual industry-wide lull to get onetime WiMax aspirant Austar United Telecommunications to the negotiating table.

And, after who knows how many months of negotiating, Optus is finally ready to start making good on its pre-election promises. Well, we hope so, at least. Having spent AU$65 million for the radiofrequency spectrum it needs to begin rolling out its WiMax services, the Optus-Elders OPEL partnership would seem to be finally getting some momentum to deliver on its promises.

That's a good thing, because with 2008 already here and the election behind us, many will begin pressuring the companies to show something for all the money the government has thrown at them.

No matter what they do, delays will be perceived as a sign that things aren't going as smoothly as they had hoped, so the companies would be well advised to put some runs on the board in order to silence their critics.

One can be certain that the venture's new government overseer, Stephen Conroy, will be watching the effort for any opportunity to throw a spanner in the works. Of course, he has his own promises to deliver upon, with many voters likely to also begin asking where their oft-promised FTTN connections have gone.

Just what OPEL and Conroy are and aren't doing will likely be the subject of quite a few ruminations this year, so I won't bore you with it all just yet. What I will say, however, is that this purchase is a significant shift in Australia's telecommunications landscape -- for all the wrong reasons.

Consider Austar, which believed enough in WiMax eight years ago that it shelled out AU$180 million for the spectrum that would allow it to roll out the services around the country. In subsequent years, however, the prospects for that service have grown increasingly dim as Austar realised the hype of the dot-com era, and its attendant spectrum auctions, was going to be difficult to translate into real, commercial services.

I spoke with John Porter, CEO of Austar, in the middle of last year and he hinted at the kinds of problems the company was having turning its vision into reality. Porter was dirty on the government's "cognitive dissonance" stemming from its need to both nurture Telstra and encourage the company's competitors -- which had, he felt, resulted in a duopoly-based telecoms market that simply made investment by other companies untenable.

"There aren't a lot of public policy visionaries in government, and they're very short-sighted in terms of the implications [of their policies]," he said. "There was a view that a strong Telstra, and a strong duopoly with Optus, is the best way forward for telecoms in this country. But when you have the emergence of new technologies, which you had with [Hybrid Fibre Coax] 10 years ago and which you will shortly have with wireless technologies such as WiMax, [the duopoly approach] doesn't create a particularly level playing field -- one where people are willing to put capital at risk."

Would one say that Optus is now willing to put capital at risk? Well, yes, since it has matched Elders by shelling out AU$32.75 million for its rights to the spectrum it needs to build out Australia's next major wireless network.

Yet while the sale of spectrum to OPEL may reflect a starting point for WiMax, it also reinforces a sad point: rolling out broad swatches of coverage in rural areas simply isn't going to happen without the direct involvement of a major carrier -- and Australia only has two of those willing to take a punt on large portions of the bush.

That means Australians still face limited choices, and uncertain outcomes for their votes and taxpayer dollars. Austar couldn't make the most of its asset, so it has sold the spectrum at a loss and focused on a core business that it reportedly does pretty well. OPEL have a plan and now have the spectrum to make it happen -- so hopefully, they can succeed where others have not.

Of course, this success will face other problems: the licence Optus has purchased expires in six years; while one would hope Conroy would be above pettiness, one wonders what kind of cost or conditions might be attached to a renewal of the WiMax spectrum licence should Labor be re-elected three years from now.

That's all speculation, of course. For now, and because it's a new year and we should all be positive for the new year, let's simply send condolences to Austar -- and hope that OPEL will move quickly to deliver on their promises.

Austar is counting on OPEL to be able to provide WiMax services for it to wholesale to its customers by the end of the year -- so here's hoping this deal will finally make 2008 the year of WiMax.


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