Optus says Vodafone blew its chance on 4G

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Optus says Vodafone blew its chance on 4G

Boils down to 'commercial priorities'.

Vodafone squandered its first-mover advantage on 4G and can only blame its own “commercial priorities” and network problems for its market woes, according to Optus.

The stinging rebuke came as Optus declared it would not support a regulated opening of Telstra’s regional mobile network to other telcos, even though it could benefit as a “potential user” of such a service.

Vodafone and TPG support the opening of Telstra’s network. Vodafone claims Telstra’s “entrenched mobile network monopoly” is harming competition in regional areas, and that it – and other competitors – “cannot feasibly duplicate” regional infrastructure.

However Optus argues that carriers have continued to deploy infrastructure to varying degrees.

Optus’ own network investments had helped erode price premiums on Telstra services, it said, even though it was comparatively late to the 4G party.

“When 4G was first rolled out by the MNOs [mobile network operators] it was primarily delivered over the 1800 MHz spectrum band,” Optus said.

“Since Optus only had a small number of regional 1800 spectrum apparatus licences it was constrained in its ability to deliver 4G services to regional Australia.

“This was only alleviated when Optus acquired 700 MHz and 2600 MHz spectrum in the digital dividend auction in 2013.”

In contrast, Optus said, “VHA [Vodafone] has not faced similar constraints as it has held more extensive 1800 MHz regional spectrum licences together with 850 MHz regional spectrum that was capable of being used for 4G almost two years before the 700 MHz and 2600 MHz spectrum became available".

“Despite having a first mover advantage over Optus, VHA has been slower to rollout 4G coverage to regional areas,” Optus said.

“As a result, Optus has more than a thousand 4G-enabled base stations in regional Australia than VHA and provides 4G coverage to 96 percent of the population.”

While Telstra’s regional mobile network footprint was significant, Optus argued there was “no evidence to suggest that this represents a barrier to entry in regional areas".

“The fact that Optus can maintain market share across metro and regional areas shows that an MNO with a national marketing focus is viable,” it said.

“Optus submits that VHA’s market share differential largely reflects its commercial priorities and reputational damage caused by its 2010 network issues.”

Those network issues, which became known as Vodafail, saw Vodafone forced to make a multi-billion dollar investment to bring its network up to standard.

Optus said market shares over the past six years largely reflect the continued fallout of Vodafone’s issues, which saw it lose millions of customers to rivals Telstra and Optus.

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