• Great articles on other sites
  • RSS Great articles on other sites

  • Featured, News, Telecommunications - Written by on Monday, February 20, 2012 10:42 - 10 Comments

    Optus buys Vividwireless for $230m

    news Australia’s number two telco Optus this morning revealed it would buy wireless broadband player Vividwireless from its parent the Seven Group, for a total cost of $230 million, in a move which Optus said will birth a new 4G mobile broadband network in Australia.

    Much of the asset base of Vividwireless is believed to have come from Unwired, which was acquired by Seven for about $127 million in late 2007, as its plan to conquer Australia’s mobile broadband market through using the burgeoning WiMax standard was rapidly coming undone through the encroaching popularity of third-generation mobile broadband networks launched by companies like Telstra, Optus and Vodafone. It had previously counted chip giant Intel among its investors.

    In a statement released this morning, Optus said the deal would eliver it access to up to 98Mhz of wireless spectrum in the 2.3GHz band — a band which was already used by “some of the world’s leading operators” to provide 4G services. 4G is a term used to describe the next generation of wireless broadband services, which will allow speeds up to levels such as 100Mbps — far beyond the current generation of 3G services.

    Optus said it planned to use this spectrum “to build a new 4G network using LTE-TDD technology”.

    “This new network will deliver wireless broadband to households and businesses in metropolitan Australia, with typical download speeds ranging from 25Mbps to 87Mbps — twice as fast as existing competitive 4G services,” said Optus. “It will be integrated with Optus’ 1800MHz network, which will be launched in Newcastle and the Hunter region of NSW in April 2012.”

    Paul O’Sullivan, Optus Chief Executive said: “The acquisition of Vividwireless will give Optus a significant increase in network capacity to address the next wave of data growth that is just around the corner. By integrating it with our current 4G rollout (in the 1800MHz band), we will be able to provide increased mobile speeds to our customers in metropolitan Australia.”

    “Optus was born out of a desire to provide choice and competition to Australians for telecommunications services. Today’s announcement demonstrates our commitment to being a leader in 4G and in providing Australians with a range of high speed mobile services. This is an important step in our vision to lead the industry in customer experience by delivering relevant content and applications anywhere, on any device,” O’Sullivan said.

    Peter Gammell, Chief Executive Officer of Seven Group Holdings said: “We are proud of our achievements with Vividwireless. For Seven Group Holdings this sale recognises value for the investment we’ve made in Vividwireless. Optus’ expertise will allow the business to grow into the future and take the pioneering work we’ve done in 4G to the next level.”

    The acquisition includes the transfer of Vividwireless’ operating businesses, customers, spectrum licences and existing wireless broadband network. Optus will also need to pay a substantial fee — estimated at $50 million — to the Australian Communications and Media Authority for the reissue of the spectrum. In a separate statement, Optus parent SinTel said the consolidated net asset value of Vividwireless based on its 30 June 2011 financial statements was approximately $11 million.

    Vividwireless will continue to provide services to its customers with Optus planning to migrate customers to the upgraded LTE network as rollout progresses.

    In a later statement issued by an Optus spokesperson in reply to questions from Delimiter, the company said that Vividwireless will continue to provide services to its customers post the acquisition, with Optus planning to migrate customers to the upgraded LTE network as rollout progresses.

    With respect to the issue of whether the new 4G network will be data-only or will also support mobile telephony, the statement said: “Like all current 4G networks it will initially be a 4G data network but we expect a rich ecosystem to develop with a variety of devices like smartphones etc being available.” The company noted that customers will be able to access both the 1800Mhz and 2.3Ghz spectrum bands, referring to the “integration” part of its original statement. Network vendors for the planned 4G rollout had not been finalised, as the Vividwireless transaction had not been completed, they said.

    The news comes as rival telcos Telstra and Vodafone have also been developing their 4G offerings. Telstra has already launched its fledgling 4G network in CBD areas, while Vodafone is still testing its offering in certain regions.

    This acquisition appears to be almost purely about access to spectrum — spectrum which Optus needs to build out its 4G network and compete with Telstra. Vividwireless (and Unwired before it), was broadly unsuccessful in its business model of launching fixed wireless broadband services in Australia, and while the company has some customers, it’s not building any scale at any speed. The existing 3G mobile broadband networks have simply offered too much competition for the company to grow at any decent rate. It had to die at some point and this looks like that point.

    In addition, with this acquisition, it appears as if Optus has finally been able to convince its parent SingTel to unlock the purse strings for Australian acquisitions, if only in its core mobile market. This bodes well for Optus — it indicates that the company is becoming more flexible. Optus missed the acquisitions of AAPT, Internode, TransACT and more in the fixed broadband market. It can’t afford to keep doing so. Perhaps we’ll see a more active Optus in the near future.

    On a final note, I must add that I am disappointed that Optus didn’t hold a press conference this morning to announce the Vividwireless acquisition. In years gone by, for major company moves like this, Optus CEO Paul O’Sullivan would have fronted journalists and taken questions on the issue. Today, all we have is a brief media release issued unexpectedly in the dead of Monday morning. As a company, Optus is gradually becoming less transparent over the years, and that’s not a good thing.

    Image credit: Optus

    submit to reddit


    You can follow any responses to this entry through the RSS 2.0 feed. You can skip to the end and leave a response. Pinging is currently not allowed.

    1. Daniel
      Posted 20/02/2012 at 11:39 am | Permalink | Reply

      I seen this coming amile away Optus.
      Now Optus tell the pubic you have vendors in BTS hardware.?

      • Posted 20/02/2012 at 4:09 pm | Permalink | Reply

        What does BTS stand for?

        • Ian
          Posted 20/02/2012 at 4:30 pm | Permalink | Reply

          Base (Transceiver) Station. The electronics that go with a tower.

        • Daniel
          Posted 20/02/2012 at 6:20 pm | Permalink | Reply

          @Renai LeMay Optus seem to have dumped NSN (nokia siemens networks) in flavour Huawei in rolling out SingleRan BTS gear.

    2. Ian
      Posted 20/02/2012 at 1:01 pm | Permalink | Reply

      So Optus are doing FD-LTE at 1800MHz and 700MHz, and now they’re doing TD-LTE at 2300MHz as well? At least they’re not putting all their eggs in one basket, I guess.

      Good luck buying a device compatible with all three networks though.

      • Posted 20/02/2012 at 4:10 pm | Permalink | Reply

        It is quite weird … but then Telstra attracted similar comments when it picked 850MHz in 2005. That’s why I’m waiting to see what happens here before I judge Optus too harshly ;)

    3. nonny-moose
      Posted 20/02/2012 at 2:04 pm | Permalink | Reply

      its a bit confusingly written but if the Vivid network is TD then it would be kind of difficult to integrate “with Optus’ 1800MHz network, which will be launched in Newcastle and the Hunter region of NSW in April 2012.” if that network is FD.

      from one of the other stories about on the development, i think the plan is that vivid customers will be migrated over to Optus 4g services which suggests to me the vivid hardware wont be reused and the spectrum used to augment the existing 4g services. thats the kind of integration im expecting.

      whatever winds up happening, its a fairly big slab of spectrum, i dont know if its contiguous or whatever but going by the 4g trial reports ive seen so farit would pretty much work out to 4 20Mhz channels with either a small between channel buffer or the last 16 Mhz subdivided in some fashion. thats in addition to LTE spectrum Optus already hold. the purchase makes absolute sense as the speed you get on a 4g service has a direct relationship to how much spectrum is in the slice the tower/carrier affords you – one of the trials i recall had slices from 5 through 10 and up to 20 with the best throughput figures in the order of 40 mbit using the 20Mhz slice. might have been the Telstra trial….

      At any rate id suggest Optus seem to be gearing up to take on Telstra, having learned something from the way Next G ran away with the show due to speed and coverage, they wont want a repeat so the next generation of mobile services is likely going to be an interesting one to watch. if they are really going on the acquisition trail thats just more reason to be watching.

      • Mathew
        Posted 20/02/2012 at 3:56 pm | Permalink | Reply

        Vivid effectively has the entire 2.3GHz band to itself, plus the 3.4GHz used for Unwired.

        No reason why FD and TD can’t be run together, there is already a network in Poland with both. And Sprint and Clearwire in the US will be doing the same. Vivid is currently WiMAX but their Huawei base stations can be upgraded to TD-LTE

        • nonny-moose
          Posted 20/02/2012 at 6:21 pm | Permalink | Reply

          ahhh dint know about the Polish example. id thought it was a bit of an either or thing, but if they can coexist happily thats likely too. i did suspect that similar basestation hardware allowing an upgrade was a possibility too, forgot to mention earlier. That sort of deal certainly worked for Internode and iiNet, so its clear this has left Optus with a few ways to jump. mind you i would have thought a network with both TD and FD elements would have been more complicated to run, which is why i initially thought it was a pure spectrum play. having most of a band to itself is a pretty strong position to hold.

    4. FREDDY
      Posted 01/03/2012 at 9:38 pm | Permalink | Reply

      does this mean optus will get rid of vivids plans?

    Leave a Comment


  • Get our 'Best of the Week' newsletter on Fridays

    Just the most important stories, one email a week.

    Email address:

    Follow us on social media

    Use your RSS reader to subscribe to our articles feed or to our comments feed.

  • Most Popular Content

  • Enterprise IT stories

    • Super funds close to dumping $250m IT revamp facepalm2

      If you have even a skin deep awareness of the structure of Australia’s superannuation industry, you’ll be aware that much of the underlying infrastructure used by many of the nation’s major funds is provided by a centralised group, Superpartners. One of the group’s main projects in recent years has been to dramatically update and modernise its IT platform — its version of a core banking platform overhaul. Unfortunately, the $250 million project has not precisely been going well.

    • Qld’s Grant joins analyst firm IBRS peter-grant

      This week it emerged that Peter Grant, the two-time former Queensland Whole of Government CIO (pictured), has joined well-regarded analyst firm Intelligent Business Research Services (IBRS). We’ve long had a high regard for IBRS, and so it’s fantastic to see such an experienced executive join its ranks.

    • Westpac dumps desk phones for Samsung Android mobiles samsung-galaxy-ace-3

      The era of troublesome desk phones tied to physical locations is gradually coming to an end in many workplaces, with mobile phones becoming increasingly popular as organisations’ main method of voice telecommunications. But some groups are more advanced than others when it comes to adoption of the trend. One of those is Westpac.

    • Ministers’ cloud approval lasted just a year reverse

      Remember how twelve months ago, the Federal Government released a new cloud computing security and privacy directive which required departments and agencies to explicitly acquire the approval of the Attorney-General and the relevant portfolio minister before government data containing private information could be stored in offshore facilities? Remember how the policy was strongly criticised by Microsoft, Government CIOs and Delimiter? Well, it looks like the policy is about to be reversed.

    • WA Govt can’t fund school IT upgrades oops key

      In news from The Department of Disturbing Facts, iTNews revealed late last week that Western Australia’s Department of Education has run out of money halfway through the deployment of new fundamental IT infrastructure to the state’s schools.

    • Turnbull outlines Govt ICT vision turnbull-5

      Communications Minister Malcolm Turnbull has published an extensive article arguing that the Federal Government needed to do a better job of connecting with Australians via digital channels and that public sector IT projects needn’t cost the huge amounts that some have in the past.

    • NZ Govt pushes hard into cloud zealand

      New Zealand’s national Government announced a whole of government contract this morning for what it terms ‘Office Productivity as a Service’ services. This includes email and calendaring services, as well as file-sharing, mobility, instant messaging and collaboration services. The contract complements two existing contracts — Desktop as a Service and Enterprise Content Management as a Service.

    • CommBank reveals Harte’s replacement whiteing

      The Commonwealth Bank of Australia has promoted an internal executive who joined the bank in September after a lengthy career at petroleum giant VP and IT services group Accenture to replace its outgoing chief information officer Michael Harte, who announced in early May that he would leave the bank.

    • Jeff Smith quits Suncorp for IBM jeffsmith4

      Second-tier Australian bank and financial services group Suncorp today announced that its long-serving top technology executive Jeff Smith would leave to take up a senior role with IBM in the United States, in an announcement which marks the end of an era for the nation’s banking IT sector.

    • Small business missing the mobile, social, cloud revolution iphone-stock

      Most companies that live and breathe the online revolution are not tech startups, but smart smaller firms that use online tools to run their core business better: to cut costs, reach customers and suppliers, innovate and get more control. Many others, however, are falling behind, according to a new Grattan Institute discussion paper.

  • Blog, Enterprise IT - Jul 5, 2014 13:53 - 0 Comments

    Super funds close to dumping $250m IT revamp

    More In Enterprise IT

    Blog, Telecommunications - Jul 5, 2014 12:12 - 0 Comments

    What should the ACCC’s role be in guiding infrastructure spending?

    More In Telecommunications

    Analysis, Industry, Internet - Jun 23, 2014 10:33 - 0 Comments

    ‘Google Schmoogle’ – how Yellow Pages got it so wrong

    More In Industry

    Blog, Digital Rights - Jun 30, 2014 22:24 - 0 Comments

    Will Netflix launch in Australia, or not?

    More In Digital Rights