Telco giant Optus has followed market leader Telstra by announcing it will invest in fourth-generation LTE networks over the next few years as the amount of data consumers download on their mobile devices continues to increase exponentially.
The move follows telcos in the United States which have been upgrading their 3G networks to LTE. Device manufacturers are now catching up with newer smartphones and tablets now containing the capacity to connect to LTE speeds.
Telsyte director of research consulting Chris Coughlan says telcos are not only future proofing for devices that are now containing LTE capability but also accounting for the huge increase in the amount of data users are now downloading on laptops, tablets and smartphones altogether.
“There are two aspects here to the issue of broadband capacity, one is the devices and the other is the higher data usage that people are seeing.”
“Upgrading the network allows them to more efficiently service the mobile data market, the same with what Telstra is doing. It’s a good use of capital.”
Vodafone Hutchison has already announced plans to upgrade its network capacity and speeds but it hasn’t confirmed a concrete timetable.
Optus said yesterday it would start upgrading metro 3G networks beginning in April next year. The first areas to receive the faster speeds will include Port Stephens, the Hunter Valley, Newcastle and the Macquarie Valley, while capital cities will see speeds increase a few months later.
The company will use existing 1800MHz spectrum that had been used for 2G services, but said it was currently too early to speak about using 700Mhz spectrum that will be auctioned off by the Australian Communications and Media Authority in 2012.
“We expect in 2014 to 2015 to have it available, and that will influence our roll-out plans. The earlier, the better, for us,” said managing director of networks Gunter Ottendorfer.
While Optus has not been able to confirm what type of speeds users can expect, early tests last year suggested speeds up to 40 megabits per second were attainable. Chief executive Paul O’Sullivan said it would also allow the network to be accessed by wholesalers.
“It’s a fundamental belief inside the company that we must have a strong wholesale business in order to compete and survive. So we won’t be delaying in sharing this network with our wholesale partners,” he told CNET. “It’s a question of timing for them in terms of system and platforms and ability to deliver.”
While Telstra had already announced LTE services, Optus said it would be waiting until next year to begin deploying the network as devices start becoming more popular.
“I think what we’ve announced today is timing, which coincides for when the devices and the ecosystem, the applications and the content will be well developed,” he said.
Patrick Stafford is a freelance journalist and a former deputy editor of SmartCompany.
