IDC senior analyst for mobile and wireless solutions Warren Chaisatien said that the market size in Australia will "not justify four separate 3G networks in the country since the market is too small for it."
Chaisatien added "another key reason is that 3G infrastructures are expensive to build from the ground up unlike when the carriers upgraded from 2G to 2.5G wherein the investment was relatively minor because it was just an upgrade. But 3G needs to be built from scratch meaning heavy investments are required."
Vodafone, however, is not worried about the cost of the 3G rollout. They recently announced Nokia as their 3G network infrastructure partner in Australia and New Zealand.
"The decision marks a significant step closer towards the availability of Vodafone's 3G services in Australia and New Zealand. With significantly faster data rates and greater capacity, customers will be able to experience the huge benefits of 3G services, by being able to access more services, faster," Vodafone technology director Jeni Mundy said.
The main role of Nokia will be to partner Vodafone Australia and New Zealand in the establishment of 3G network infrastructure. Nokia is also expected to have a key role in network planning, optimisation and operations.
Vodafone spokesperson Juliet Simpson said that "cost is not an issue" for the 3G rollout. Although they are doing the project alone at the moment, Simpson said that they "believe that network sharing is a potential in the future and we still believe that's the way to go in the Australian market."
An Optus spokeswoman said they are in no hurry to match Vodafone saying "we are already providing 3G-like services with our 2.5G network. We don't think 3G handsets will be in sufficient quantities until some time next year."
The Optus spokeswoman told ZDNet that they are currently preparing to launch their 3G rollout when the timing is right.
"This financial year capex budget will include some spending related to the progressive rollout of our 3G mobile network."
She also added that "Optus is always open to any sensible proposals for network sharing that makes commercial sense."
Hutchison Telecommunications previously confirmed it had held talks with Telstra regarding business opportunities that include a possible merger of CDMA businesses and sharing of Hutchinson's WCDMA 3G network.
Chaisatien said, "Sooner or later Telstra and Optus will have to join the 3G market. But if the return of investment is not very clear there is no rush for them to get in there and just end up losing money." He also added that 2.5G competition will still continue even if the carriers end up sharing 3G networks in the future.