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Is Telstra's customer grab hurting Next G?

Next G is touted as the strongest of the Australian mobile networks, but after adding over a million mobile customers in the last year, some Telstra mobile customers have begun reporting a decline in the quality of Next G network coverage.
Written by Josh Taylor, Contributor

Next G is touted as the strongest of the Australian mobile networks, but after adding over a million mobile customers in the last year, some Telstra mobile customers have begun reporting a decline in the quality of Next G network coverage.

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(Credit: Josh Taylor/ZDNet Australia)

Until recently, Telstra had combined its superior mobile network brand with a more expensive mobile price. However, in July last year at the launch of the iPhone 4 and to counter the launch of the Nexus One, Telstra began offering postpaid mobile phone plans with prices in a similar range to that offered by its competitors.

The competitive pricing, in combination with well-publicised network issues for both Optus and Vodafone, gave Telstra the opportunity to catch up to its rivals and increase its market share in the smartphone category from 33 per cent to over 41 per cent at last reporting.

According to Telstra's third-quarter figures released in May, the telco had added a massive 1.2 million mobile customers in the first nine months of the financial year to give the telco over 11.5 million mobile customers in total. Over 700,000 of these are on either the iPhone or Android devices.

By comparison, in its third-quarter report, Optus said it had added 709,000 new mobile customers in the nine months of the financial year that had past, giving the telco more than 9 million customers in total. Meanwhile, Vodafone added 681,000 new customers in the first three quarters to reach 7.5 million mobile customers, but it was also losing over 150,000 customers per month at the peak of the troubles with its network.

On a customer acquisition high, Telstra recently launched a series of advertisements on billboards, bus stops and daily newspapers boasting that its network is second to none; however, the telco's new found popularity may be affecting its mobile network performance, if user reports are to be believed.

Customers have begun reporting a drop in the speed and availability of the network in high density urban areas, most notably Sydney, Melbourne and Perth.

"Get techs to fix the Melbourne CBD problem. It's painful," one user told the Telstra Twitter account.

"Another day of terrible 3G speed on my @telstra phone in Melbourne CBD," another said.

"I am finding the Next G network increasingly patchy, dropping some calls, and the data speed isn't crash hot," Whirlpool user iConfused said. "I used to be happy to pay a premium, because it was so good. It's simply not up to that standard anymore."

In an email to one customer posted on Whirlpool, Telstra admitted that customers may see slower data throughputs and said capacity upgrades were on their way.

"Telstra has groups of wireless network engineers in each state singularly focused on ensuring the network capacity keeps pace with the growth of data traffic on our mobile network. In some instances, unanticipated demand means there may be some coverage areas which experience slower than usual data throughputs at busy times of the day. In these cases every effort is made to advance network capacity augmentation activity to minimise customer inconvenience," Telstra said.

"The wireless network engineering team in [Western Australia] have undertaken a number of extensive studies on the Perth [central business district], and have implemented a range of improvements ahead of a more significant capacity boost from which we expect to see the benefits become apparent within the next two to three months with ongoing activity to ensure performance is maintained to expectation."

Telstra's executive director of networks, Mike Wright, told ZDNet Australia that the telco conducted thousands of upgrades a year to the network to respond to growth.

"Having swallowed such a large number of new customers, the network on a whole is still performing very well, but you occasionally get a little bit of indigestion and what we're doing is responding as quickly as we can, as we see any of these individual spots pop up. Overall, when we look at network performance, it has held up remarkably well."

These upgrades include building new sites, minor software and hardware upgrades, adding new antennas, as well as bringing on additional carrier frequencies using the 850MHz and 2100MHz bands, Wright said.

He said that while some upgrades may take longer, for example, due to the requirement to get approval for putting a new cell tower on top of a building, no cell was allowed to fall below Telstra's standards.

Telstra's network configuration also meant that some older handsets were unable to deal with the number of cells they have to watch at once, according to Wright, and when a customer reports a problem that doesn't match what Telstra's network statistics say, the telco may send out an engineer to investigate.

Foad Fadaghi, research director at Telsyte, said inner-city areas will always suffer network issues.

"In places of high density, there's always going to be some challenges in regard to [capacity]," he told ZDNet Australia.

"The impact of data growth and subscribers is affecting all networks and it's a function of how well that network deals with that demand that determines its overall performance. Although Telstra's performance might be declining, you have to compare that to other networks to see what the relative performance changes are," he added.

However, customers reporting issues wasn't just limited to high population density places, Wright said, with some unusual network coverage issues coming from regional Australia too.

"One of the notorious things is TV amplifiers that people use to improve their TV signal. If they go faulty, they turn into a transmitter unfortunately. It takes us a while to track it down, and we'll work with the customer to replace their TV antenna."

In general, Fadaghi said Telstra's plan to launch Long Term Evolution (LTE) mobile broadband services later this year would address some of the capacity issues.

"[LTE has] the potential to support more people on that cell and the perception of speed is kind of improved," he said.

Telstra still has the perception of being the most reliable network, according to Fadaghi.

"Folks that are after the most reliable broad-based network are typically with Telstra," he said.

Other telcos no better

While complaints about Telstra network appear to be growing, customers appear to be no happier with the other two telcos.

"Who would have thought? After 12 yrs of being an @Optus mobile phone user, I'm now a @Telstra customer! Here's for better 3G reception!" wrote one Twitter user today.

"#vodafail are so toast once my contract expires. Worst decision using those hacks. @Telstra sorry I left. You suck, but you work," said another user.

Vodafone and Optus have both embarked on upgrades to their network in order to cope with the growing user demand.

Spokesperson for Australian Communications Consumer Action Network, Elise Davidson, said mobile coverage can be patchy no matter what telco you're signed up with.

"Especially in metro cities people are finding that their networks just can't cope with demand for data and calls during certain periods," she said, adding that people should investigate what coverage is like in the areas they most frequent before signing up to a new mobile phone plan.

"Don't go off the provider's coverage maps because they're unreliable. At home talk to your neighbours, and at work do the same. Figure out where you're going to use your mobile most," she said.

If people are experiencing bad coverage with their current provider, Davidson suggested that they keep a log of when calls drop out, or when they are unable to access data, and then lodge a complaint with their telco and seek compensation for services that the provider was unable to meet.

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