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Telstra 4G sales rise to 820,000

Telstra CEO David Thodey has revealed that the company sold 820,000 LTE 4G devices in the first 12 months of the network's operation.
Written by Josh Taylor, Contributor

Telstra CEO David Thodey has revealed that in the first year of the company's long-term evolution (LTE) 4G network being in operation, the company sold 820,000 devices.

Speaking at a Telstra investor briefing day in Melbourne this morning, Thodey said that of the 820,000 devices sold since the launch of the network last year, 405,000 were handsets, of which over 100,000 were iPhone 5 devices. The network now covers approximately 40 percent of the Australian population, and the company plans to reach 66.6 percent by the end of June 2013.

Telstra's head of mobile, Warwick Bray, told investors that there were now 13 4G devices in the market through Telstra.

The 4G roll-out is part of an overall mobile strategy to manage network traffic and improve revenue in the mobile business. Bray said that Telstra was trialling a small cell network at Flemmington race course in Melbourne that will improve capacity by up to 80 percent. Bray said that acquiring additional spectrum and trialling HetNets were also part of this strategy.

The company was also considering offloading network traffic to Wi-Fi, but he admitted that it was overrated.

"It's just not as big as is often touted, but we agree it is selectively useful," he said.

Bray said that getting people onto 4G devices was the priority, because it cost the company less to have customers on 4G than on 3G.

"Our policy is to get the latest devices out there, because they are so much more efficient on the network. We're endeavouring to get 4G devices into the market," he said.

"It's very much in our interests to move our customers as quickly as possible from 3G to 4G because of unit cost benefits."

Thodey said that the company did not consider charging more for 4G at this stage, unlike telcos in other countries, because it had begun to shift data allowances to charging more for less data across both 3G and 4G offerings.

"We have pulled back, in terms of data allowances. There is just slowly a movement of value into the LTE offer. Every country is different [and] you've got to look at the dynamics; we watch them pretty closely."

Revenues for mobile were up 8.5 percent in the last financial year, and the company had begun to improve its average revenue per user (ARPU) through a change in plans from around two years ago. Bray said that the pitch to customers now was that Telstra was a "value premium" mobile service, with greater coverage, fewer dead spots and a more reliable experience than other players in the market.

The company does see over the top SMS and voice replacement applications, such as iMessage, Facebook Chat and WhatsApp, as a threat to the company's voice and SMS revenue streams, but Bray said that it was being addressed by changing the pricing construct, with more allowance for voice and SMS on plans. This would reduce the temptation for customers to use alternatives, but Telstra was also considering creating its own messaging service.

"We are considering our own enhanced messaging solution," Bray said.

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