Is The NBN Now Less Viable After Telstra 4G Announcement?

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Analysts and political rivals say Telstra CEO David Thodey’s dramatic announcement at the World Mobile Congress in Barcelona that the telco will launch Australia’s first commercial LTE service by year-end is clearly intended to maintain Telstra’s mobile network advantage over its rivals.Thodey says the Next G network will bring LTE technology to the CBD of every Australian capital city and a “select” number of regional cities by the end of 2011. However users will need new equipment, and will find that LTE does not support conventional voice services, only VoIP services.

Opposition spokesman on communications Malcolm Turnbull seized upon the announcement, claiming LTE and other 4G wireless services would make the National Broadband less viable.

“This is going to be a real competitive force,” Turnbull told ABC radio. “The NBN business case assumes the increase in demand for wireless broadband won’t continue,” he claimed.

Research firm Telsyte says the LTE announcement “signifies an important market development”. “We expect other carriers to quickly follow suit,” Fouad Fadaghi, research director at Telsyte, told CDN.

“While there is little by way of 4G  handsets available today, Telstra’s announcement will ensure that we receive the latest models in Australia to the benefit of consumers,” he said, adding: “4G networks will help boost smartphone and tablet sales, and potentially provide those on slower fixed-line connections an alternative to the NBN.”

IDC telecoms market analyst Mark Novosel says that building a limited LTE network will allow Telstra to leverage its 1800MHz spectrum to continue delivering market-leading mobile broadband performance, while minimising transmission costs and reducing the likelihood of congestion for voice customers on 3G.

 

 “I believe that Telstra will not be pushing the fact that they will sell ‘4G’ as has been the case in the US – rather they will state that customers can experience improved performance and lower latency in CBDs” Novosel says.  “For Telstra, (this) will provide justification for it to maintain a price premium over Optus and Vodafone. However the steep premiums enjoyed by Telstra in the early days of Next G are certainly gone.”

Some sections of the media were yesterday beating up the arrival of LTE as a looming threat to viability of the NBN, but commentator Paul Budde wasn’t having any of that. “I full applaud (arrival of 4G) – but I don’t see it as a threat to the NBN. Some 15 percent of people in Australia have dropped the fixed line, but the majority are using the fixed line and a mobile phone,” he said on ABC TV news.

Comms and Broadband Minister Stephen Conroy was on the same wavelength: “Wireless and fixed-line are complementary – people will want both,” he said.

 

 

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