Vodafone earmarks $500 million 3G expansion to rival Telstra

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Vodafone earmarks $500 million 3G expansion to rival Telstra

Vodafone Australia has thrown down the gauntlet in a challenge to Telstra’s Next G rural monopoly with new plans to build a $500 million 3G mobile broadband network that is set to cover 95 percent of the Australian population.

The 3G network expansion has been earmarked with a Christmas 2008 deadline.

“Building a national mobile broadband network is our number one priority for 2008 and we will make it happen on time,” said Vodafone Australia CEO Russell Hewitt. “Australian business and personal customers will soon enjoy far greater choice as Vodafone begins to deliver mobile broadband to more people in more areas than we’ve ever reached before.”

The 3G network expansion will provide High-Speed Packet Access (HSPA) to customers while also improving network coverage and capacity for standard 2G and 3G voice calls. It will eclipse Vodafone’s current 3G coverage of 55 percent of the country to 95 percent by the end of next year.

The new network will operate on 900MHz and 2100MHz spectrum with the 900MHz band promising higher coverage areas per base station for regional areas. It will be as fast as the network Vodafone currently shares with Optus, hitting theoretical download speeds of 3.6Mbps.

Vodafone said it would maintain its existing 3G network sharing joint-venture with Optus in major metropolitan areas, but would go solo with its plans for a rural rollout.

Andy Reeves, Chief Technology Officer at Vodafone Australia, said: “We’ll be going flat-out with teams upgrading sites in every state and territory, simultaneously. It’s a massive project but we’re very confident we can complete Vodafone’s national mobile broadband network upgrade within one year.”

If all goes according to schedule, Vodafone’s rollout will pip both Optus and Hutchison’s plans to expand their 3G networks over the next couple years. Optus plans on spending up to $900 million to extend its 3G coverage to 96 per cent of the population by 2009, while Hutchison has a joint venture with Telstra in major metro areas with plans to expand.

But whether Australia, with its population just edging over the 20 million mark, needs so many 3G players, remains to be seen. Reeves, however, believes there is room.

“I think that there is probably room for three broad coverage networks, but time will tell if we are to see any of these players sharing or partnering down the track,” he said.

Although pricing for access to the new Vodafone network is a long way off from being announced, Reeves hinted that the costs would not be as prohibitive as Telstra’s current Next G pricing.

“We’ve not finalised the details of the pricing yet but we’re obviously aware of the current [Telstra] pricing in the market at the moment and know that it’s pretty high,” he said. “But our latest announcement on pricing should give a very good indication of what our pricing plans are.”

Vodafone’s latest pricing announcement was for its 3G broadband plan that offers 5GB of data for $39 per month.

Although Vodafone is yet to select a vendor to carry out the infrastructure rollout, Reeves said Vodafone was currently in negotiations with Ericsson, Nokia Siemens Networks and Huawei. A decision to finalise the equipment vendor is to be made before the end of the month.

Telstra, which launched its Next G network in October 2006, is not too concerned about the Vodafone announcement though.

"Vodafone is playing catch up by press release instead of starting work on building the network,” said Telstra spokesperson, Peter Taylor. “Even if they finish building at the end of next year, their network will still be smaller than Telstra's Next G network that already services 98.9 per cent of the population and offer speeds a fraction of those planned for Telstra customers."

Telstra plans to ramp up speeds for its Next G service to 40Mpbs in 2009.
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