What is Telstra up to?

  • Upgrading 2000 telephone cabinets to provide more ADSL
  • Rolling out 4G mobile network
  • NBN and structural separation loom

With a company as big as Telstra, it’s hard to gauge where its heart is. On the one hand, Telstra has begun a rollout of their 4G mobile broadband network, offering speeds of 40mbps in the inner city, negating the need for fixed line services. On the other hand, it has begun a massive upgrade of its ADSL network, which will entice mobile broadband users back to fixed-line. Where is Telstra going?

The answer is; Everywhere. CEO David Thodey pledged in early 2011 to develop a $1bn ‘fighting fund’ to bring customers back to Big T. The move has worked, with a gentler website, improved customer service, more competitive pricing and a friendlier online presence. TIO complaints are down slightly, and subscribers have been coming back. But much of the migration to Telstra has been away from Vodafone and their network problems. ADSL and Cable are still losing customers to much more competitive broadband providers.

Top Hat

Perhaps in answer to this, and maybe just because it’s a technology that has recently become available, Telstra has started installing “Top Hat” solutions to about 2000 street cabinets around Australia. At these locations, customers have been in effective ‘black holes’ – areas where much of the population is simply too far from the central exchange to provide ADSL broadband. These are areas that were underpopulated until the boom in population (and inner-city house prices) moved lots of people out to them. Many are estates that were built in the 1980’s, before ADSL was a consideration. As such, they were provided with mini, roadside exchanges that amounted to little more than cabinets. A Telstra engineer suggested in early 2011 that ADSL equipment could now be installed on top of these cabinets, hooking into the mini-network they provided. By November 2011, Telstra had begun an 18-month planned upgrade of 2000 of them.

This will drive tens of thousands of homes back to ADSL from the misery of trying to use a mobile broadband system as a workable connection for the home. Ironically, many of those same customers will have already been on Telstra’s mobile network, as it offers the best speeds and coverage. Just as they might be moving back to fixed-line, Telstra is also rolling out its 4G network, which might actually start looking and feeling as reliable as an ADSL connection!

Preparing for a new era

Of course, fixed line broadband has another big advantage- value. The top plans on Mobile Broadband offer about 15GB, whereas Telstra has ADSL plans all the way up to 500GB, and other providers go to Unlimited. Of course, there has been no word yet on whether these Top Hat solutions will be made available to competitors on a wholesale basis. The Australian Competition and Consumer protection Commission (ACCC) has yet to weigh in.

This comes with recent news that Telstra is investing in a new undersea cable; and will start offering its existing 3G mobile network as wholesale product to other service providers. The National Broadband Network is coming, and Telstra’s structural separation (pulling apart its wholesale and retail operations) is imminent, but the company is making a lot of moves in the meantime to deal with the new era. That can only mean good things for its millions of existing and potential customers.