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After playing coy about when it would launch its third generation (3G)
mobile phone network, Telstra surprised the market yesterday by announcing that
it has Australia's first commercial network up and running.
Telstra jumped the gun on Hutchison Telecommunication's much anticipated 3G
network launch, due early next year at a cost of $3 billion, with an upgrade of
its current CDMA network estimated to have cost tens of millions of dollars.
The bargain basement price of the 1xRRT upgrade is reflected in the initial
services on offer.
Telstra said a consumer service with downloadable entertainment like games
and music is expected to be announced early next year.
The initial offering will provide a faster pipe for businesses to access
applications wirelessly via PDAs and notebooks.
The service will offer speeds comparable to a desktop computer at up to
144Kbps, according to Telstra.
The service is available in the greater Sydney area, including the Central
Coast, Wollongong and Newcastle, as well as Melbourne and surrounding areas like
Geelong and the Mornington Peninsula. Other capitals and the Gold Coast will be
added next year.
Hutchison was not impressed with the announcement.
``If this is what Telstra regards as a full suite of 3G services, then we
look forward to next year," said Hutchison's head of shareholder relations,
Steve Wright.
Telecommunications analyst Paul Budde was also unimpressed, saying the
announcement was more of a PR exercise.
``They want to be seen as the mobile leader," he said. ``It's a clear
message to everybody, but it is of course a devastating blow to Hutchison."
Mr Budde said there were plenty of other wireless services to address
business needs in this space and the 1xRTT technology was not that different
from the disappointing first generation data service technology GPRS.
Telstra Mobile managing director David Thodey said Telstra's 2.5G service
(GPRS) had failed because ``the data speeds just weren't compelling enough".
Telstra reported that 2001-02 wireless data, which is around 8 per cent of
the mobile division in terms of revenue, grew 76 per cent from the prior year.
SMS still accounted for 90 per cent of revenues, the company said.
Telstra would not forecast how the service will affect revenues, but Mr
Thodey said data's contribution to revenues would be consistent with past
trends.
Telstra closed down 2c at $4.55.
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