3G: Vodafone to go solo

26 Nov 2003

Vodafone Australia has announced that it will roll out a 3G network on its own, having failed to find a partner to help share costs. Managing Director Grahame Maher confirmed that his company had held talks with a number of rival mobile operators but that none was willing to back a rollout programme for launch as early as 2005. However, Maher confirmed the door would be kept open for others to join at a later date. Both Telstra and SingTel Optus have thus far maintained the opinion that there is no urgency for investment in 3G technology, claiming that their existing networks offer similar multimedia content. Hutchison Whampoa, meanwhile has already launched a 3G service to the Australian populace, unveiling its ‘3’ network in April this year. The service proved instantly popular with customers, claiming 18,450 connections by the end of June, rising to 43,650 by the end of July. The company claims around 60% of 3’s subscriber base had ported their number from one of the other three incumbent mobile operators. Initially covering just Sydney and Melbourne, the network has since been rolled out to cover Adelaide, Brisbane, Perth and the Gold Coast.

The composition of the Australian mobile sector has undergone considerable change over the past couple of years, from the perspective of both operator and subscriber. Until the start of 2001 the market followed the common model of high customer growth and associated acquisition costs as the nation’s four operators used aggressive marketing techniques centred around highly subsidised handset packages in order to boost subscriber levels. However, as penetration levels topped 50% and the global telecoms market took a serious turn for the worse, the operators shifted their focus away from the post-paid contract, subsidised handset model, and towards the pre-paid arena with its lower subscriber acquisition costs (SACs). However, whilst the operator’s SACs have been reduced, so have their average revenue per subscriber (ARPU) levels. At the same time they have been faced with the public’s growing appetite for ‘next-generation’ mobile services, the provision of which involves the construction of high bandwidth infrastructure and the development and marketing of new handsets capable of offering advanced data and video applications. In the eighteen months to the end of June 2003 the number of mobile subscribers in Australia rose from 11.89 million to 14.35 million, pushing the penetration rate to 73%, the highest in the Asia-Pacific region after Singapore (80%), Hong Kong (92%) and Taiwan (106%).