Telstra’s 4G just “bragging rights”, says Optus CEO


update Optus chief executive Paul O’Sullivan this afternoon said his company wasn’t yet seeing consumer demand for the next ‘fourth generation’ (4G) of mobile networks and devices, adding that plans to deploy the standard by rivals like Telstra were little more than “bragging rights”.

All three of Australia’s major mobile telcos — Telstra, Optus and Vodafone — have over the past year announced plans to trial the incoming generation of 4G services using the Long-Term Evolution or LTE standard. The standard offers dramatically faster mobile broadband services to consumers, as well as allowing telcos the chance to use capacity more efficiently on their networks.

4G services are increasingly being launched internationally — especially in the US, where a number of major telcos are pushing the new standard heavily at the moment.

Only Telstra, however, has confirmed plans to actually launch a 4G/LTE service in the market — revealing in February that by the end of the year, it would upgrade its flagship Next G mobile network in central business districts around the nation to use the LTE standard by the end of 2011, with the 1800MHz frequency also being used by the Optus and Vodafone LTE trials.

However, in a teleconference associated with Optus’ financial results today, O’Sullivan didn’t appear wholly positive about the potential for the technology in Australia, noting the telco didn’t currently see the “consumer demand” for 4G services.

O’Sullivan said that the current 1800Mhz deployments allowed telcos to have “bragging rights” — “people want to be able to say they have it, and that they can provide it to a small number of customers”.

However, he said, major 4G rollouts in Australia would have to await access to the 700Mhz wireless spectrum, which will be released as part of the ‘digital dividend’ when the nation finally switches as a whole to digital television and stops broadcasting analogue signals. “That’s the stage at which you are going to see major widespread consumer demand and acceptance,” O’Sullivan said.

The key driver for Optus deploying 4G, the executive said, was in fact the availability of end user devices (such as mobile broadband dongles and smartphones supporting the standard), which are not yet widely available.

Despite the comments, O’Sullivan noted he did see 4G/LTE as being “very important”, adding that Optus’ parent Singtel was trialling the upcoming standard across its wider operations. “We will launch 4G soon, and we’ll do it when the market is ready,” he said.

In addition, Optus was also constantly investing in its existing 3G network, the chief executive said — it had invested half a billion dollars in that network every year for the past five years, and was on track to do the same this year, with fibre backbone connections now having been laid to some 80 percent of metropolitan base stations, new spectrum holdings being purchased and an “aggressive” metropolitan buildout adding base stations and capacity.

Telstra happy with Optus’ approach
A spokesperson for Telstra said in a statement responding to O’Sullivan’s comments this afternoon (Vodafone has also been asked to respond) that its own recent figures around mobile broadband subscriber growth indicated interest in mobility remained “strong” and that customers were “more and more interested in reliable and consistently fast mobile connectivity”.

“From Telstra’s perspective, we see strong interest from our customers in reliable, fast mobile connectivity, and the integration of LTE technology into the Next G network is a way to continue to deliver high quality services and meet growing customer demand,” the spokesperson said. “LTE will enable Telstra to continue to deliver a superior end-user experience — high speed, high quality, reliable connections — for existing and future Next G customers.”

Regarding spectrum, the Telstra spokesperson said it would be “some years” before the 2.5GHz and 700MHz bands became available for use by mobile operators. “In the meantime, we’re making use of the allocations we have today,” they added, “so that we can start providing these services to our customers earlier than waiting for the other spectrum bands to become available.”

“Very happy to see Optus sitting on their hands though, while we work on delivering a better mobile experience to our customers.”

Vodafone’s reaction
A spokesperson for Vodafone highlighted the company’s “successful” LTE trials in the 1800MHz band with Huawei, noting that results had shown download speeds of up to 73Mbps, “paving the way for the evolution to even higher data speeds” for the company’s customers.

“In February, we announced plans to replace around 5,800 existing 2G and 3G base station sites with Huawei’s SingleRAN solution, which is capable of delivering 2G, 3G and, later, 4G or Long Term Evolution (LTE) from a single base station site,” the company added. “We’ll also install the new Huawei network equipment at more than 2,200 new base station sites that it will be added to our network over the next 18 months.”

“When this radio equipment project is complete, we will have a very straightforward and flexible upgrade path to LTE, once the right devices are there to support the right customer experience.”

Image credit: Delimiter


  1. This smells of just trying to hide the fact they don’t actually have the spectrum resources to behind deployment of LTE services.

  2. It makes some sense to deploy new networks/spectrum using the latest and most efficient technology available (LTE). Even if it happens to use a non standard frequency.

    Supplying LTE USB dongles on a custom frequency would be a fairly trivial task (and this is where a lot of the bandwidth demand resides). There’s also a few brand name Android smartphones coming out with LTE support already but there isn’t enough choices yet really for a serious conversion from 3G for new customers.

    • Exactly right. There’s no point in having super fast LTE network up if it only operates in patchy locations and intermittent intervals. Mind you Telstra aren’t much better with theirs. Oh for a mobile data network that works. A tall demand, I know.

      • LTE devices is backwards compatible with 3G. Over time I’d imagine 3G spectrum itself would be switched over to LTE (or better).

      • *cough* I disagree with you about Telstra’s Next G network — I have never had more than a couple of cursory problems with it, I find it rock solid.

        • Agree… Renai.

          My wife is with Telstra and I am with Optus.

          Her NextG is clear as a bell full reception around or near our home (urban sprawl) and most, if not all areas, wherever we go. Whereas, with Optus I need to go outside when I receive a call at home, as reception indoors is impossible…

          Yes, I will be looking at NextG myself when my plan is soon up…!

          • *sigh* I hear this story constantly … yet I don’t think Optus truly appreciates how bad its reputation is in this regard. Personally, whenever anyone tells me they’re on Optus, Vodafone or Virgin, I chuckle and generally say: “How’s that working out for you?”

          • Sigh. Well, we have a Telstra NextG Home network gateway with two whopping great big 3G antennae on the back and it still only manages an iffy connection. It’s certainly not fast (remember the days of waiting 10 mins for youtube to buffer?) and sometimes I can’t connect at all and just have to go to bed and hope that it’s sorted itself out in the morning. I too am in urban sprawl, in the SE, but not as far out as you might think.
            Basically what I’m saying is that it makes no sense to me to be talking about the next big thing, if they still can’t get what they have now working at a decent rate. We have mobiles with Optus, and the 3G drops in and out so many times on the train to the city, I end up watching the signal bar and pounce on those fleeting minutes of signal for my browsing/work/games.

    • 100% correct. Optarse can not get there current 3g operating reliably so there is no way there are going to talk up 4g. This type of attitude from Optus in other area’s of there business has just seen me as of today port 3 mobiles with over 10 years of business to another carrier :)

  3. I remember back in the days when Three launched 3G Optus made similar statements about ‘Consumer Demand’. We all know how that one turned out for Optus.
    Once Optus launched 3G properly POS was again caught off guard by how bad the network was (NOPS reporting one thing and consumers something entirely different) – they are still playing catch up on that one today.
    Given that Optus under POS majorly (even admittedly) screwed that one up if I was an investor I would be pretty worried right about now!

    • I dunno … from a financial perspective Optus is doing rather well. However, from a mindshare perspective the company has gone backwards an incredible amount in recent years.

      • Agreed Renai – upon reflection they have been doing pretty well relative to the market.

        And yes they have certainly taken a hammering on network quality perception – which is interesting considering one of their number one priorities internally was to be ‘number 1 in mobile’.

        I think the credibility gap is only going to get worse if they caught off guard again. They run a very tight ship in regards to capex (not necessarily a bad thing) but I tend to think this is what caught them out with 3G. Where as Telstra was willing to make a big ballsy investment in Next G, Optus stood back and waited until they could make an investment with no ROI risk.

        I think the only saviour to Optus from Next G was that Telstra was very distracted by their systems renewal and had trouble responding to the market in regards to pricing. The fact that Next G did not decimate Optus’ market share was luck more than good strategy.

        Like I said – todays statements seem a little too much like history repeating.

        • I’ve posted this before on another article.

          Telstra – Premium service (coverage), premium support, premium charges.
          Optus – Lower coverage than Telstra, worse support/customer service and a corresponding lower price.
          Vodafone – Smallest coverage of the lot. Lara was the only way to attempt to get help and cheapest ‘national’ provider.
          Three – Only covered capital cities, as such – lowest price (where you can get it).

          In more recent times the following has occurred:

          1. Telstra have dropped their prices significantly. (remember the days when Telstra introduced ‘capped’ plans – years after optus and voda?)
          2. Telstra invested lots of $ in a new 3G network.
          3. Voda + Optus pricing risen comparatively, and now all three players are in the same ball-park.
          4. Voda + three merger, reducing ‘competition’ in the low end of the market further.

          As a result where previously people paid *less* (potentially half the monthly cost) by having a voda/optus service than with Telstra, they were less upset by the coverage issues.

          Now that an equivalent Telstra service is so closely priced to a voda/optus equivalent – customers are less willing to wear the lower service and coverage, and making a direct comparison to a Telstra service.

  4. major 4G rollouts in Australia would have to await access to the 700Mhz wireless spectrum, …. “That’s the stage at which you are going to see major widespread consumer demand and acceptance,” O’Sullivan said.

    Somehow I doubt that consumer demand is linked to spectrum release. Reminds me of Telstra saying that there was no demand for ADSL2 for all those years…

    • Heh, that is kind of funny. We can’t provide LTE because we don’t have the spectrum, but that’s OK because consumers don’t want it. But when we get the spectrum, consumers will want LTE so that’s when we’ll roll it out. Not because we finally CAN, but because consumers will want it.

    • lol yup — it is a truism that the faster and better capacity and latency broadband Australians get, the faster they soak it up … whether it’s mobile or fixed. Maybe the 1Gbps NBN might keep us sated for a while …

    • >> Reminds me of Telstra saying that there was no demand for ADSL2 for all those years…

      hehe yeah i was just thinking that it’s is like that telstra statement the other week about voip. i.e. it’s not that it’s unreliable, but more like they didn’t bother to upgrade the network and are now sooking about it.

  5. The reason theres no demand for 4g is that were still all waiting for them to bow to the consumer demands of 3g.

    Or is being able to use our phones too much to ask.

  6. I would’nt place too much importance on what Paul O’Sullivan has to say on this issue, being the CEO of a Telco that routes normal traffic via redundant, back-up links because their network is at max capacity & dont want to spend the money to upgrade or, fails to install back-up gen sets to exchanges/ switches to supply stable power when the elec supply fails or, stretch’s newly installed fibre to the point of breakage in an attempt to reduce infrustructure costs!
    All of the above happened & highlighted shortcuts being taken by this “world class” telco…cough.

  7. Its great that telstra and vodafone are building there networks and optus will still be left behind i’m lucky i don’t have optus sheres as an investment and so would be alot of other poeple it would be a good time to sell optus sheres and buy telstra or vodafone sheres with the 4g lte networks being setup and i have seen technishins working on and around telstra and vodafone mobile phone towers

  8. I used to be on optus and i got no coverage inside the house that i live at and i was on a 24 month contract and the recption got worse over a year and i phoned the tio 1800 062 058 and i phoned optus a number of times and got thre reps employee number every time i phoned and i broke the 24 month contract and the rest of the contract i didn’t have to pay but i had to pay for remaning payment of the handset and it doesn’t matter if it is 3g or 4g lte when it goes online because the tio goes to a department can goto the top of a telco where the public can’t go and i switched to telstra nextg and i still kept my number and i did it with my optus modem number and i ported it to telstra and now i use it on the ipad.

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