Telstra gives 3 a piece of Next G

Although 3 was the initial driver of 3G adoption in Australia, Telstra’s game-changing Next G network took 3G competition to a new level, forcing competitors to respond.

According to Nathan Burley, analyst at Ovum, Optus and Vodafone both plan nationwide 3G networks - Vodafone will reach 96 percent by end 2008, Optus will reach 98 percent by end 2009. Although 3 offers national coverage via Telstra’s 2G network, its 3G coverage remains at only 56 percent.

“In a game where coverage is king, 3 had potential to be squeezed. These announcements will ensure it remains competitive,” said Burley. For Telstra, roaming revenue from 3 has become a significant stream.”

He claimed that although Telstra has been keen to avoid wholesale access to its Next G network, 3 now had other options available in Optus and Vodafone and this accounts for the timing and also limited roaming areas.

“3’s announced network expansion is also significant. It initially looked like only two 3G networks would be built in Australia after network sharing agreements between Telstra and 3, and Optus and Vodafone began. However, we will now see four competing sets of infrastructure in some areas,” claimed Burley.

He stated that previously a maximum of three national infrastructure operators is the most likely long-term scenario in Australia. LTE deployments, potentially from 2012, may now be the catalyst for this.

“With a strong focus on metro areas and less scale than its competitors 3 must remain focused and not spread itself to thin. It must continue to build scale in order to compete longer term, so disruptive and aggressive innovate strategies will remain,” said Burley.