Sunday, October 08, 2006

Telstra NEXT G broadband mobile phone network?

Telstra launched its NextG broadband mobile phone network last week. I tried to find the details on the Telstra web site but it was running so slowing I couldn't get any information. So I looked around elsewhere. Here is a brief analysis.

According to media reports the service will use the 850MHz High-Speed Downlink Packet Access (HSDPA):
High-Speed Downlink Packet Access (HSDPA) is a mobile telephony protocol, also referred to as 3.5G (or 3½G) technology, which provides a smooth evolutionary path for UMTS-based 3G networks allowing for higher data transfer speeds, up to 14.4 Mbit/s per cell in the downlink and 2 Mbit/s per cell in the uplink.

An evolution of the W-CDMA standard, HSDPA achieves the increase in the data transfer speeds by defining a new W-CDMA channel: a high-speed downlink shared channel (HS-DSCH) that operates in a different way from existing W-CDMA channels and is used for downlink communications to the mobile.
From: High-Speed Downlink Packet Access, Wikipedia, 7 October 2006.
It should be noted that HSDPA theoretical download speed of 14.4 Mbit/s is per cell. This is all the telephone users in once cell share this capacity. In contrast ADSL users each have a dedicated line. ADSL2+ provides up to 24 Mbit/s, but even ordinary ADSL is likely to provide higher data rates than HSDPA in typical use. HSDPA is not a substitute for ADSL for high speed broadband applications.

Telstra appears to be aiming NextG at consumer services on smart phones, such as mobile phone pay TV, rather than general broadband services. The difficulty for Telstra will be finding services which customers are willing to pay a premium for to have on a mobile phone.

Internet-like services have been available on mobile phones with 2G and 3G for some years, but have not proved popular. This has partly been because Telstra (and other mobile providers) charge a large premium for mobile access. Mobile data can cost ten to twenty times as much as wired data:

Comparison of Telstra Mobile and Wired Data Charges
ServiceMonthly Access FeeMonthly Allowance Mbyte)Excess Usage Charge ($ per Gbyte)
Telstra Mobile Broadband$29.0015$2,050.00
Telstra's BigPond ADSL$29.95200$150.00

Telstra launched the web-like I-mode service in Australia in 2004. Despite this having been very successful in Japan, the service has failed to be popular in Australia.

The carriers have offered bundles of services, such as web access and limited video as part of a flat monthly fee, as a lower cost alternative to per-byte data. But these have limited the user to the carrier's own content (such as their own video clips and web basedservicess) and have not proved popular. Tesltra's NextG strategy seems based on the same approach, with a $12 per month to subscribe to 12 Foxtel channels. However, this will be a service at mobile phone resolution, for a pocket size screen, not suitable for viewing on a normal size TV screen.

Handsets will initially be from Motorola, Samsung and LG. Data cards for laptop computers will also be available. The handsets are also likely to have the capacity to link to a computer via Bluetooth or a cable, as with current 3G handsets, but it is not clear if Tesltra will offer a plan to encourage this. In theory a desktop computer, or a whole office network, could be connected to the Internet using one NextG handset, but the network capacity and pricing model may not make this feasible.

NextG makes business sense to Telstra just as an upgrade for the voice mobile phone network. It is not clear if it offers any consumer benefit as a wireless data network. The system does not have the technical capacity to replace ADSL broadband and Telstra is not pricing the service to compete.

As successful business model for Telstra might be to use NextG as a mobile phone service metropolitan areas, and as a dial-up replacement in non-metropolitan areas. This would allow Telstra to replace its expensive cable network in non-metropolitan areas and still provide voice and lower speed broadband services. However, there would be technical problems to overcome, as well as regulatory ones. Telstra would have to ensure that the service operated at long range with sufficient bandwidth for rural areas. They would also have to gain approval to sell essentially the same the mobile service to rural customers at dial-up prices (one tenth to one twentieth the price the charge city customers). Countries such as India already have such "fixed" wireless services.


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