Telecom's XT network still off at launch

Yesterday was Telecom New Zealand's official launch of its new XT WCDMA network, and on the outside, things looked very impressive with a son et lumière performance by Mike Mizrahi's Inside Out Productions that wowed the assembled crowd on a cold and wet Auckland autumn evening.

CEO Paul Reynolds did all the speaking for the event, which was perhaps a bit surprising given his position, but perhaps befitting an event that felt more like a sigh of relief that the quick network roll-out is over than a star-studded launch with an MC in charge of proceedings.

Despite featuring in Telecom's TV advertisements, Top Gear's Richard Hammond was nowhere to be seen, much to everyone's disappointment.

Despite featuring in Telecom's TV advertisements, Top Gear's Richard Hammond was nowhere to be seen, much to everyone's disappointment. Even if Hammond understandably couldn't make it to the launch in person — New Zealand's hardly a day trip away from the UK — I was curious as to why Reynolds didn't call him up over the XT network, or video-call him.

In fact, apart from a gaggle of promo people letting the audience touch the new handset range, there wasn't a demo of the XT network's capabilities at all. This is very likely due to Telecom agreeing to a last-minute filter install to deal with the XT-generated interference, so that Vodafone would drop the High Court injunction against the network's launch.

The network will go live on 29 May now instead, and I'm hoping to get a hands-on demo next week of what XT is capable of. For now, I haven't got much to report back. The USB data stick that Telecom will launch with is the Sierra Wireless 885, and the handsets seem to be Sony Ericsson W995, Palm Treo Pro and Blackberry Bold, as well as the Samsung F480 and Nokia E71, plus a bunch more that haven't been announced yet.

Will XT be successful and help Telecom regain the market share it has lost to Vodafone? Making it so presents a delicate dilemma for Telecom, a full-service provider with fixed-line and wireless interests that to some extent compete against one another. On the one hand, Telecom's spending well over half a billion dollars on the mobile network, on the other, a couple of billions on the fixed-line broadband network.

Don't get me wrong: there is no mobile wireless offering currently that will do as a fixed-line broadband replacement. For instance, even though XT promises 14.4Mbps down and 5.76Mbps uploads, Telecom says the typical user experience will be 3Mbps down and 1Mbps up. This should improve a bit with the 21Mbps upgrade later this year, but it's no match for Telecom and other providers' ADSL2+ services. There's the issue of data caps as well, with these being even more niggardly on 3G than on fixed-line broadband.

However, for many people, a 3G phone could do away with a landline (NZ$45 per month in most places) and a low-end DSL connection (another NZ$30 or so per month). If you're not an avid online surfer, and could downsize your communications need to just a 3G connection with phone and modem, and drop the landline, surely that's a tempting option in these fiscally constrained times?

If Telecom markets the snot out of XT, it may steal back customers from Vodafone, but it also risks cannibalising its very lucrative landline business.

I'm betting this won't happen, and that Telecom will seek a balance between the two, maybe offering fixed-line and mobile bundles if the regulator, the Commerce Commission, allows it. Doing so will have Vodafone rushing out to do the same over its unbundled network and that won't necessarily be a great development as it's likely to increase customer lock-in with annual or bi-annual contracts as is common here.

Oh well. In two weeks' time all might be revealed. Watch this space.