Telstra and VHA call time on 3G network share

Australian carrier Telstra announced Thursday that it is to end the 3G network sharing arrangement it has with Vodafone Hutchison Australia in 2012. The news comes days after Telstra CTO Hugh Bradlow denounced network sharing as uncompetitive and “a race to the bottom”.

The network sharing arragement was originally struck in 2004 for operation in the 2100MHz spectrum that was allocated for 3G services. In 2007 Telstra launched its NextG network at 850MHz, which became the primary focus for network investment. The firm said that continued investment in the network sharing joint venture made “little sense” given that “the coverage, speeds and services available on the Next G network are far superior to the 2100MHz network.”

The conclusion of the Telstra-VHA arrangement will have a minimal impact on Telstra users, said Kate McKenzie, the firm’s chief marketing officer. Users keen on bandwidth-hungry services have largely migrated to the Next G network, with only 158 Telstra customers on the 2100MHz network using the carrier’s mobile TV offering, and only 1,500 placing video calls in recent months. These users will notice slower speeds form 2012 if they choose to remain on the 2100MHz network.

During a presentation at the Open Software in Mobile conference in London earlier this week, CTO Hugh Bradlow criticised network sharing arrangements, arguing that they discourage operators to invest in improving networks as a competitive differentiator. He cited experiences roaming in the UK, home to some of the most advanced network sharing programmes in the world, as proof that the strategy leads to poor performance. Bradlow claimed to have experienced more capacity based drop outs while roaming in the UK for two days than he had experienced on the Telstra network in two years.

Telstra said that its share of the network assets from the JV will be incorporated into the Next G network to increase capacity, and so the firm would not incur any asset impairment.