Telstra drops cap on wholesale 3G

The speeds on offer for telcos reselling on Telstra's 3G network are set to improve substantially with Telstra removing the cap on 3G speeds.

Aldi Mobile customers, and others on Telstra's 3G wholesale product will soon get an uptick in the speed on their service, with Telstra announcing plans to remove the data speed cap on the product.

Just over two years ago, Telstra began offering a 3G wholesale product as more of its own retail customers began moving onto Telstra's 4G network.

According to Stuart Lee, Telstra's group executive for wholesale, two years on, Telstra now has 12 mobile virtual network operator (MVNO) customers offering services to consumers on the network. At the launch, speeds were initially capped to 7.2Mbps, with average speeds expected between 300kbps and 1.1Mbps. Lee told the Communications Day Summit in Sydney today that this cap would now be lifted.

"We will remove the cap on our 3G download speed, which is currently 7.2Mbps, and we'll also increase our 3G network coverage from 98 to 98.5 percent of the Australian population," he said.

"We expect these changes to be fully implemented in three to four months time."

The speed will now be up to 42Mbps as per the rest of Telstra's 3G product offering. Lee also announced that Telstra has just signed a three-year deal with Medion, the Telstra reseller that supplies the Aldi Mobile product in Aldi supermarkets in Australia.

"We're very pleased to have reached this agreement after some well-publicisied difficulties earlier in this financial year when ISPOne went into administration ," he said.

In September last year, ISPOne was sold off to Melbourne-based telecommunications company CONEC2 , after it had been placed in administration due to millions of dollars in outstanding debt owed to Telstra and other creditors.

At the centre of ISPOne's financial woes was an ill-fated deal with Kogan Mobile to resell mobile services on the Telstra 3G network. Kogan Mobile's 115,000 customers used much more of the service than ISPOne had expected, and the result was that ISPOne could not recoup its costs for providing that service to Kogan Mobile and still pay its bills to Telstra.

When the agreement between Telstra and ISPOne was terminated, Aldi began wholesaling directly through Telstra , but the company was unable to reach a similar agreement with Kogan Mobile.

That original deal appears to have been a short-term agreement for Medion, as now the company has signed on for a long-term three-year deal with Telstra. The agreement coincides with an overhaul of the Aldi Mobile AU$35 product that saw data available on the plan reduced from 2.5GB in 30 days, to just 1GB.

Lycamobile appears to have escaped a wind up order last month , and Lee said that the reseller would now offer 3G products instead of just 2G, as it had in the past.

Lee said that Telstra's wholesale mobile product was getting stronger, despite the initial troubles with Kogan Mobile.

"We're very confident of a bright future on that front. Notwithstanding those difficulties we had at the start of the financial year, our numbers have improved by over 100,000 in the last six months," he said.

He said Telstra Wholesale's MVNO focus would continue to be on brand extenders with strong retail distribution, such as Aldi, or customers that are targeting specific niches.