Telstra And VHA Killing Off 2100MHz Network Joint Venture in 2012

Back in 2004 when 3 launched in Australia, they formed a joint venture with Telstra to build all those 3G towers to offer 3G services. Last week, they announced that they were killing off their joint venture to focus on their own products.

VHA will be bulking up its network in the leadup to the end of the joint venture, promising 1500 850MHz towers, plus 1400 new sites on their current network, with expansion set for next year.

Telstra meanwhile, is talking up its NextG network, claiming that most of their 3G customers won't be affected by the end of the deal. Especially given that it isn't due to end until August 2012.

It's a move that's been expected since 3 and Vodafone merged, really. The fact that it's taken this long to announce, and is still almost two years away from happening means it probably won't affect anybody at all...

Telstra and VHA to conclude joint venture 21 October 2010 – Telstra and Vodafone Hutchison Australia today announced their network joint venture using the 2100MHz mobile phone spectrum would conclude in 2012. The joint venture was created in 2004, before the launch of the Next GTM network which operates on the superior 850MHz spectrum. The change is not expected to impact Telstra’s earnings in FY10/11 or FY11/12. Telstra expects an annual EBITDA improvement of more than $50m per annum from FY13/14 to FY16/17 as a result of the decision. Telstra does not anticipate any asset impairment as a result of this agreement as the assets will continue to be utilised. Telstra Chief Marketing Officer Kate McKenzie said there would be no change for the vast majority of Telstra mobile customers because the Next GTM network was not impacted. “There is no change for customers on the Next GTM network and no change for customers in regional and rural Australia,” Ms McKenzie said. “The exit of the joint venture will go unnoticed by most of the customers still using the earlier network because their handsets will automatically roam to the GSM network for voice calls and SMS.” From 2012 affected customers will be unable to use their handsets for 3G services such as video calling or Mobile FOXTEL and mobile browsing speeds will slow when in metropolitan areas. Few customers on the 2100MHz network use their phones for such services, with only 158 watching Mobile FOXTEL and 1500 placing video calls in recent months. “The coverage, speeds and services available on the Telstra Next GTM network are far superior to the 2100MHz network so it made little sense to continue investing in the joint venture.” “We will encourage customers using the earlier 2100MHz network to upgrade their handsets before 2012 so they can take advantage of faster data speeds, wider network coverage and mobile content available on Next GTM.” When the agreement concludes, Telstra’s share of the network assets will be incorporated into the Telstra Next GTM network to increase network capacity into the future. The nominal end date for the partnership is 31 August 2012, but this may be brought forward to a date from 1 January 2012 if certain conditions are met. Telstra will write directly to affected customers with more information about the change and their options. To find out more, please see the frequently asked questions at www.telstra.com.au/earlier3G or call Telstra on 125 111. Telstra Business customers can call their Account Executive or 13 2000.

Vodafone Announces Major Network Investments Vodafone Hutchison Australia (VHA) today announced major new network investments, strengthening the Vodafone 3G network in and around cities and towns across Australia. “We are creating a stronger, better network for our customers, which will deliver a superior customer experience and support ever increasing levels of data usage and expanded areas of coverage,” said Nigel Dews, CEO of VHA. “We have already invested over $550million in our network and there is much more planned.” Following the merger of Vodafone and 3 in 2009, the company has undertaken an extensive review of its network assets against the growth planned and customer needs. The Vodafone and 3 networks will merge into a single network making full use of VHA’s base stations, core network, spectrum assets and global strategic vendor relationships. Investments include: • 1,500 sites on a new 850MHz network with 350 sites already turned on and a further 50 expected to be live before the end of next month, providing more in building coverage and additional capacity for areas where data demand from smartphones and mobile broadband is high and growing. • 1,400 new sites on the 3G network including 900 in capital cities to deepen network coverage. • 500 new regional sites to support regional expansion and strengthen our city fringe and regional coverage. • Femto cells. Trials are currently underway with our first business customers expected before Christmas. Femto cells will be commercially available at scale for businesses and consumers to get low cost, more flexible coverage into offices and homes in 2011. • New transmission improvements including IP enablement, transmission consolidation and continued fibre roll out to connect many of these new and extended sites in metro areas, also helping us to connect to the National Broadband Network (NBN) in the future. These improvements will help us to provide customers with faster data speeds at lower cost. • Successful LTE trials in the 1800MHz band with Huawei, near Newcastle NSW. Results achieved download speeds of up to 73Mbps, paving the way for the evolution to even higher data speeds for our customers. Many initiatives will be completed next year. When we are able to connect to the NBN there will be further opportunities for network expansion and new services. “Our continued investment is aimed at supporting the next phase of the mobile revolution. Data growth on our networks is exploding, particularly with more and more customers using multiple mobile devices like smartphones and iPads,” said Dews. “And we will do this in the most cost effective way we can, so that we can continue to deliver great value to our customers.” Ends