Archive for the ‘Australia’ Category

Telco Separation Models Costly

Friday, August 21st, 2009

As Telstra is clearly in the sights of the Australian Federal Government ot force separation of its retail and wholesale operations, the company is predicting high costs should such a move become a reality. In its recent 2009 earnings presentation, the telco’s CFO, John Stanhope claimed the value of the company could fall by more than $1.2 billion if the Government followed through on its threat of functional separation.

On the other side of the equation, dozens of submissisions received by The Communications Minister, Stephen Conroy, in support of the separation claim the increased competition is essential before building of the national broadband network.

The next question is what type of separation model is likely to satisfy the Government. Most of Telstra’s competitors are in support of the more stringent structural separation, whilst the Government [at this point] has indicated it favours the less rigourous functional separation. Still a significant change and financial burden. 

Claims by Mr Stanhope indicate that operational separation will likely cost $120 million and take six months, whilst functional separation [as adopted by British Telecom] could cost more than $1.2 billion – and take five years. That represents 10c per share based on current shareholding.

Following shortly thereafter, the the wake of their recent forced separation based on the British Telecom model, Telecom NZ Ltd reported a 43.9 per decline in Net Profit for the year to June 30th 2009, driven largely by Telecom Retail and AAPT. Another indication of the high cost of divorce?

Telecom NZ Ends Cellnet Mobile Distribution Contract

Thursday, April 24th, 2008

The reportedly $A150 ($NZ180 million) a year exclusive distribution contract between Cellnet, a listed Australian mobile phone company and Telecom NZ will end September 30 2008.

Cellnet Group distributes mobile phones and accessories for Telecom, but the agreement will terminate in advance of Telecom NZ’s new WCDMA/GSM network rollout, due in November.

The Cellnet and Telecom NZ distribution contract was signed in 2002, with Telecom NZ becoming the distributor’s single largest customer. The impact on Cellnet,s revenues [$A528.2 million last year] is significant.

Telecom NZ’s Long Term Strategy On Solid Ground

Thursday, April 10th, 2008

Telecom is declaring it is in control with a 2 year loss containment plan underpinning a long term growth strategy, and fronted by its IP platform strategy. Telecoms CEO, Dr Paul Reynolds announced the long term plans for Telecom at its annual management briefing in Sydney.

Key points:

  • Core earnings will moderate during the next two years, followed by a return to growth.
  • “Investing for long term health and to drive bottom line growth.
  • Containment of near-term decline in EBITA to 4-6 percent - FY June 2009 and 0-2 percent FY June 2010.
  • Growth of 4-6 percent a year FY 2011 to FY2013.
  • FY2008 Forecast Net Profit $700 million to $730 million.
  • NZ EBITA – declining 7-8 percent
  • Australian EBITA – $A70m ($NZ82.4m) to $A80m
  • Group ebitda guidance – $1.88 billion to $1.9 billion.
  • Capital expenditure – $975m.
  • Capex FY2009 $1 billion to $1.1 billion
  • New management team – including new CFO Russ Houlden to drive a customer-focused culture
  • An all-internet protocol (IP) platform for efficiency and innovation
  • Moving to a lower cost operating model – more competitive

The Communications and Technology Minister David Cunliffe last week approved the plan to broke Telecom up into three separate divisions:  Network access [Chorus], Wholesale and Retail operations

Australias NGN Takes Another Step Forward

Wednesday, March 12th, 2008

Australian Communications minister, Stephen Conroy, has named six experts to assist in drawing up an RFP for its $4.7b next generation network and to assist in evaluating RFPs.

  • Chair – Patricia Scott – Secretary of the Department Of Broadband, Communications and the Digital Economy (BCDE)
  • John Wylie – Lazard Carnegie Wylie CEO
  • Tony Mitchell – Allphones chairman
  • Laureate Professor Rod Tucker – University of Melbourne
  • Reg Coutts – Professor emeritus of communications, University of Adelaide
  • Tony Shaw – former Australian Communications Authority chairman
  • Dr Ken Henry – Treasury secretary.

Indications of a very aggressive timetable include:

  1. Panel will receive submissions from industry and the public to assist in the development of the RFP documentation by 30 March 2008.
  2. Production of the RFP
  3. Receipt of responses
  4. Eight weeks to prepare a report making recommendations on its preferred proposals
  5. Construction of the network to be started before the end of 2008

The Panel will be supported by BCDE and other key departments and specialist advisors on regulation and technical, legal and financial and commercial issues.

One key promise by the initiative is that “The government will … ensure that people who may not have access to the new fibre network will have access to the best new fixed line, wireless or satellite technology.” With an additional $95 million in funding for the Australian Broadband Guarantee program in 2008-09, to improve access to affordable broadband in these remote areas into the future.”

Ericsson To Upgrade Vodafone Australias 3G Network

Friday, March 7th, 2008

Ericsson has won the contract for Vodafone Australias 3G network upgrade, covering regional and rural Australia. And future upgrades to 28.8Mbps are on the roadmap.

The hardware and software upgrade will boost Vodafones 900MHz and 2100MHz networks to deliver a 14.4Mbps [maximum theoretical downlink]. The limits of handsets and mobile cards restricts the theoretical speed, however the increased network capacity will allow more efficient traffic management.

Urban 3G users can expect their theoretical maximum download speed to rise from 3.6Mbps to 7.2Mbps.

Work is expected to commence within weeks, with teams upgrading the network in all states simultaneously. The upgrade will allow new services that demand a higher speed network. Vodafone is currently conducting European HSPA+ trials for the 28.8Mbps throughput. Whilst Vodafone is striving for 7.2Mbps, rival operator Telstra has firm plans to increase its NGN speeds to 21Mbps this year and 42Mbps in 2009.

Australian Government Demands Telstra and Optus Provide Network Data to FTTN Rivals

Wednesday, March 5th, 2008

The Australian government has demanded that major network provider, Telstra and other carriers provide physical details of their networks, to allow competitors to prepare submissions for the government’s proposed fibre-to-the-node network. This includes the length and location of cables.

Although under threat, Telstra has agreed to the demand, but claims the detail required could potentially be a threat to national security and law enforcement.

Compare this with the FTTN tender process currently underway in Singapore; SingTel is not being asked to divulge commercially sensitive information or law enforcement-related information to either the government or to competitors.

The Government maintains that sensitive data will not be distributed in an uncontrolled manner, and will be treated with utmost confidentiality. Small comfort in a world of commonly government leaked documents.

Optus also received a similar request. Optus is leading a rival G9 consortium also intending to tender for the FTTN network.

Optus Aiming To Beat Vodafone Australia to HSPA

Friday, December 14th, 2007

Optus has announced its plans to switch on HSPA across Australia by October 2008. This is around 18 months earlier than previously announced, and follows hot on the heels of Vodafones recent like announcement.

The 3G network will cover 96 percent of the Australian population, with a theoretical maximum downlink of 3.6 Mbps. Huawei and Nokia Siemens Networks have been selected to rollout the network infrastructure.

Vodafone plans to have fully deployed its HSPA network to 95 percent of Australia by Devcember 2008.

Both Optus and Vodafone will be using the 900Mhz and 2100Mhz spectrum bands for their 3G deployments. This will cut potential rollout costs by one third: a network using the two bands will cost up to $500 million, Optus said, compared to up to $800 million for one based exclusively on 2100Mhz.

Optus plans to maintain the current network sharing agreement with Vodafone, jointly using a 2100Mhz network in metropolitan Australia.

Vodafone Australia and Optus Battle For Mobile Broadband

Sunday, December 2nd, 2007

Vodafone and Optus have both announced low-cost mobile broadband with high download limits this Christmas, in an attempt to win support for their respective slow networks with poor coverage. In comparison, Telstras networks are double the speed and double the size of the Vodafone and Optus networks.

Vodafone Offer

AU$39 per month 5GB [uploads included] on a 24-month contract, claiming it is “five times more value at almost half the price [than competitors]“.

This includes either a USB modem and E800 Expresscard. These currently operate on the 3.6Mbps network standard, but are capable of operating on the 7.2 Mbps standard, meaning customers will not need to buy a new device when Vodafone upgrades its 3G network.

Vodafones existing customers are able move to the new plan from lower plans, at no cost, and retaining the contract terms of their old plan. Customers on plans of higher value will have to pay a penalty of AU$15 per forfeited month.

And beware, the deal comes with catches – linking with other services. But the users also benefit from Vodafones data optimisation service, which compresses downloaded data up to a third, enabling users to make more of the download quota.

Optus Offer

2GB limit for AU$39.99 a month, but only when linked with an Optus mobile or business phone.

The Optus USB modem, although free, is on a rental arrangement, while the Vodafone USB modem or Expresscard is owned by the user.

Vodafone Pacifics New Billing System Goes Live

Wednesday, November 7th, 2007

Vodafone Australia have flicked the switch on its new billing system, which will cojointly support Australia, New Zelaand and Fiji operations. NZ went live on the system in May 2007.

The move claims to prove benefifical to customer service staff and speed products to market.

Technology Vendors

  • HP Servers - 13 HP SuperDome farms, three of which are hosted in New Zealand.
  • Portal Software [USA] – billing software**
  • Siebel – customer relationship management [CRM]**
  • MetaSolv – provisioning
  • IBM’s WebSphere – integration layer
  • IBM – integration partner

**During the implementation term, Oracle acquired Siebel and Portal. According to Vodafone Australia chief technology officer Andy Reeves, this improved rather than complicated operations by reducing the number of vendors from four to one. “It’s a lot easier for us that way….The way Oracle plans it too, this solution falls into a nice, integrated roadmap.”

Project Timelines

  • Migrating data from the carrier’s old Amdocs system took about 10 days
  • Data cleaning to prepare for new data formats and tables took en about a year.

Business Benefits

The new billing system is expected to help the carrier to bring products to market faster, the solution is “highly configurable”, meaning the end of a long product development cycle on Amdocs.

Being on a common system with NZ and Fiji will also allow products to be quickly rolled out from one country to the next.