Vodafone stays quiet on LTE timing

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Vodafone stays quiet on LTE timing

More immediate problem as it loses 347,000 customers in six months.

Vodafone Hutchison Australia (VHA) has remained silent on when it planned to upgrade its expanded mobile network to Long Term Evolution technology, indicating it would wait to see how mobile devices developed.

The carrier's chief executive, Nigel Dews, said in an earnings conference call for joint venture partner Hutchison Telecommunications Australia that LTE capability had been built into the "lifetime" of the new equipment being rolled out by the carrier, but would not say when it would be made available.

"For us it's always been a decision about when those services will be useful and interesting and good value for the mass market," he said.

"Mass market handsets will be key for us and decent mass market mobile broadband markets.

"Bearing in mind we know from our past experience that early generations of those often have issues," he said, pointing to continued use of circuit-switched voice capacity in first-generation 4G smartphone globally.

VHA had accelerated rollout of an 850 MHz network over the first half of the 2011 calendar year, leading to a 30 percent increase in capital expenditure as part of a total $1 billion in investment it expected to make this year.

 

Vodafone network rollout

 

Dews said the company expected a similar increase in capital expenditure in the second half, compared to the corresponding half in 2010.

"It's in the order of hundreds of millions of acceleration," he said. "It's money we would have spent but would have spent more slowly."

To date, the company had rolled out 788 base stations of a planned 1500 for the 850 MHz network expansion. 

That came in addition to upgrades of the carrier's existing 2G and 3G networks, a new Huawei radio access network and upgrades to VHA's core network.

The company's planned transition to LTE in future would require some transmission upgrades which, on standard Huawei kit, often involved swapping out transmission cards and upgrading software.

However, the rollout would likely come after Telstra's first planned LTE services by the end of the year.

Perth service provider vividwireless had planned its own TD-LTE network to begin this year.

Optus had begun upgrading its core network and trialled LTE technology but had yet to announce when it would begin offering services.

"Typically what happens with these trends is they come later than we think and then they hit faster, that was certainly the case in the mass market adoption of 3G," Dews said.

Prepaid customers flee network

Continued network upgrades came in response to the company's worst reported customer losses to date, with 375,000 customers leaving the network in the past six months.

Dews pointed out that the majority - 347,000 customers - had come from VHA's pre-paid customer bases, with postpaid and particularly data-heavy users retaining strong figures for the carrier.

It led to a loss of $78.2 million for the first half of 2011 for Hutchison, compared to a profit of $17.9 million in the first half of 2010.

Dews said the company had "turned the corner" operationally.

"Our network's getting better all the time and what we don't have we make up for in value," he said.

"We've got to respond responsively and quickly to our customers, we've got to have no surprises and we've got to delight our customers."

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