Telstra's Next G Network: Telstra’s Myths and the Facts
Telstra announced in late 2005 it would replace its Code Division Multiple Access (CDMA) network, traditionally used to deliver voice services to rural and regional areas, with a Next Generation (Next G) wireless broadband network. The Next G network was launched in October 2006 and will fully replace the CDMA network – due to be switched off by January 2008.
Throughout this transition to a Next G network, Telstra has continued to mislead the public on key aspects of its plan.
Next G
Telstra myth one
“With the launch of the Next G network, Telstra is now delivering a nationwide broadband network and suite of services that represent an unparalleled combination of reach, speed and applications.” [1]
The Facts
Telstra does not meet basic Government-determined requirements on price, speed and services for regional areas. The Department of Communications, Information Technology and the Arts is responsible for the Broadband Now Web site (http://www.broadbandnow.gov.au/), designed to provide regional broadband customers with a list of service providers who meet basic requirements for regional broadband delivery. When the site went live, the Department declined to list either Telstra’s BigPond ISP or Telstra’s Next G network as viable options for regional broadband.
Neither met the basic Government-determined criteria on price, speed and services. [2]
After substantial lobbying and complaining, Telstra’s BigPond ISP is now listed with a disclaimer to say it is not a metro comparable service. Next G is still not included, however the Department indicated it may list Next G in the same way in the future.
But shouldn’t this list be based on facts and real services? The fact is that Telstra doesn’t qualify for regional broadband at all.
Tests of seven Telstra Next G handsets found inferior performance compared to CDMA products. Rural advocacy outfit Kondinin Group (http://www.kondinin.com.au/) has directly advised over 10,000 farmers not to migrate to the Next G network.
The group deals with a constant stream of complaints about the handsets, and in particular the aggressive Telstra marketing that has caused many to take Next G handsets not suited to their requirements. [3]
Telstra’s Next G network an expensive alternative to fixed broadband service. To use Telstra’s Next G network in the same way broadband is commonly used, you would have to be prepared to pay a very hefty premium of AU$185 per month.
Telstra myth two
“Telstra has tested its Next G network solution up to 200 kilometres” – meaning that in theory it can reach over vast distances in the bush.[4]
The Facts
A 200 kilometre range has not been proven or achieved. In a Senate hearing, Telstra admitted to testing this range “between an aircraft and a high base-station, so they were not your typical user.”[5]
The range has not been achieved in any other scenario, so how can Telstra honestly promise consumers such a service?
Telstra does not want customers to know about Long Line ADSL, a more effective service on reach, speed and price, because it can squeeze greater profits from Next G.You may not have heard about it, but Telstra recently launched Long Line ADSL. Designed for areas where copper cable lengths are too long to support ADSL, a box is installed between the end user and the closest exchange that allows an ADSL connection to be made.
This can be applied to almost any line in Australia, and connection is even subsidised by the Federal Government’s Broadband Connect scheme. So why then are more people not using this service?
References to the product trials disappeared about the same time Telstra’s Next G marketing campaign began. The news release announcing Long Line ADSL even disappeared from the Telstra Web site. The problem for Telstra is that Long Line ADSL is much cheaper than its Next G network. Telstra can make much more money by convincing customers that Next G is the best option, when in fact it is not.
So it seems Telstra’s priority is profits, not customers.
Telstra myth three
“Telstra’s Next G network coverage will be the same or better than CDMA in mid October – more than two months ahead of schedule. Telstra remains committed to switching off the ageing CDMA network on 28 January 2008.” [6]
The Facts
Customers who presently use a CDMA service via another carrier will be cut off and have no choice but to buy Telstra’s Next G service. This is because competitors who have paid Telstra to access its CDMA network (subsidised in part) and since built a customer base around that service, will be left stranded after switch-off. There is presently no alternative network for them to move their customers onto.
Telstra has refused to meaningfully discuss moving wholesale access on to equivalent services on the replacement 850 megahertz Next G network. [7] What this mean is that is that customers of rival CDMA providers will have no choice but to turn to Telstra’s Next G network.
Without competitor access to Telstra’s Next G network, and with CDMA switch off, there is in effect no competition for wireless internet services in regional areas.
Telstra would argue that competitors need to build their own networks, and not “piggyback.” But then they would also argue against duplication of infrastructure (refer Telstra myth five). What Telstra would really like is a monopoly.
Telstra cannot switch-off its CDMA network without first proving equivalent Next G coverage.Telstra makes no mention of the fact that it will not be permitted to shut down the CDMA network until the government gets the results of an Australian Media and Communications Authority audit confirming the Next G network can deliver coverage equivalence. Currently, it cannot.
Next G coverage has not been tested under realistic circumstances. CDMA based technologies (this includes Telstra’s HSDPA-based Next G network and its previous CDMA network) suffer from what is called cell breathing. Cell breathing is the constant change in range of the geographical area covered by a cellular telephone transmitter, based on the amount of traffic currently using that transmitter.
When a cell becomes heavily loaded with traffic it shrinks, and the efficiency of that cell to carry traffic is decreased. Users are pushed to lighter loaded neighbor cells; however there must be sufficient cell overlap to prevent coverage holes appearing. The upshot of this is that coverage levels need to be tested under load, or the network will not give real life results.
How can Telstra say Next G will provide superior coverage, if it has not been realistically tested?
Next G advertising
Telstra myth four
“This [a service outage] would never happen in Australia.”[8]
The Facts
This did happen in Australia. On 31 July this year Telstra’s Next G network experienced a major network glitch that left users without service for most of the day, and a “gradual deterioration of Next G data network performance over the next two proceeding days.” [9]
How can Telstra base its advertising around this guarantee, when it has already been broken?
Telstra myth five
“Our new Next G network is more than 100 times larger than any other 3G network in Australia, and covers more than 98% of the Australian population.” [10]
The Facts
Telstra’s Next G network does not currently cover 98 per cent of the population. Telstra has not yet duplicated its CDMA network, which provides 98 per cent coverage. If this were the case, the Government would allow Telstra to switch off its CDMA network (see Telstra myth three).
Telstra has used misleading theoretical maps to claim 98 per cent coverage, when in reality the Government-led audit has not been undertaken to prove this.
Telstra stated itself in myth three that it expects Next G to achieve equivalent CDMA coverage in mid October 2007. So if it doesn’t have it now, why is Telstra marketing as if it does? Isn’t this misleading?
Telstra claims Next G will provide superior coverage to CDMA in rural and regional areas,[11] yet Next G may require additional Government funding just to equal CDMA coverage. After Telstra switches off its CDMA network, areas that fall out of Next G range will be left without service – “black spots.”
Communications Minister Helen Coonan has said the Government is “concerned about the equity of coverage between the CDMA network and Telstra’s replacement Next G network.” [12] So concerned it seems as to consider it necessary to fund coverage in “black spots.”
How can Next G be superior to the CDMA network, if it will require additional Government funding just to equal it? Why should the Government have to fund Telstra’s failings, anyway?
Competition
Telstra myth six
“Australia has a system that supports companies piggybacking on Telstra’s network rather than risking their own money and investing.”[13]
The Facts
Telstra refuses to risk its own money in building a high speed national broadband network without a Government guaranteed monopoly profits. Three paragraphs down from this mythical quote, taken from the Now we are Talking website, Telstra claims it will not risk its own money and build its proposed FTTN network because “the simple fact is that people who invest expect competitive returns and the current regime does not allow for that.”[14]
Is the simple fact not that Telstra will not risk its own money because it defines “competitive return” as a guaranteed monopoly profits?
Later again, Telstra claims the only way to truly succeed in the telecommunications business is to “take a punt on investing in a technology you think consumers may want to buy.”[15]
Then why will Telstra not take a “punt” on FTTN? Overlooking the obvious contradictions here, the answer is again that Telstra will only agree to a guaranteed monopoly.
Telstra myth seven
“OPEL’s WiMAX is a massive duplication of services that already exist. The Government is wasting $958M of tax dollars to build a wireless broadband network when Telstra’s Next GTM network - a superior technology to OPEL’s WiMAX already covers 98.8% of the population.” [16]
The Facts
Telstra argues against duplication AND piggybacking at the same time. Telstra frequently complains about competitors “piggybacking on Telstra’s network” rather than investing in their own (refer Telstra myth four).
Yet when the Government subsidises another wireless network, Telstra complains of duplication. Which is it Telstra, piggybacking or duplication?
It seems the real fact here is that Telstra really wants neither. Telstra would like a guaranteed monopoly power to dictate prices and continue to enjoy super-profits at consumers’ expense.
[1] Telstra, Now we are Talking, http://www.nowwearetalking.com.au/Home/ ... 58#intNav4
[2] ZDNet, http://www.zdnet.com.au/blogs/upwardlymobile....
[3] Tim Marshal, Communications Day, 20 July 2007, Page 4
[4] Hugh Bradlow, Telstra Chief Technology Officer, AAP News Wire, 26 June 2007
[5] Jennings, 13 February 2006, Senate hearing for the Environment, Communications, Information Technology and the Arts
[6] Telstra, Now we are Talking, http://www.nowwearetalking.com.au/Home/ ... 4#intNav00
[7] David Uren & Joseph Kerr, Telstra’s rivals hit by bush block, The Australian, 17 October 2006
[8] Telstra Next G television advertising July 2007
[9] Communications Day, 2 August 2007, Page 2
[10] Telstra, http://www.telstra.com.au/nextgnetwork/coverage.htm
[11] Communications Day 24 July 2007 Page 2
[12] Communications Day 24 July 2007 Page 2
[13] Telstra, Now we are Talking, http://www.nowwearetalking.com.au/Home/ ... px?mid=353
[14] Telstra, Now we are Talking, http://www.nowwearetalking.com.au/Home/ ... px?mid=353
[15] Telstra, Now we are Talking, http://www.nowwearetalking.com.au/Home/ ... px?mid=353
[16] Telstra, Now we are Talking, http://www.nowwearetalking.com.au/Home/ ... px?mid=355
http://www.tellthetruthtelstra.com.au/latest-myth/w1/i1002770/
