Telstra has launched the first of its Next G face-lifts required by the government since it blocked the CDMA switch-off this month.
Communications Minister Stephen Conroy delayed the scheduled January 28 closure of the nine-year-old network for three months, citing problems with the reception of network handsets and the proliferation of weaker handsets across the fringes of coverage areas.
That decision gives Telecom roaming customers a reprieve from either borrowing a handset when travelling to Australia or moving to a dual mode phone such as Telecom's new Okta.
Shadow communications minister Bruce Billson said he agreed with the government's veto of the CDMA switch-off but said customers should not be rushed into leaving CDMA.
Telstra has launched a cash rebate as an incentive for CDMA customers to connect to the Next G network, alongside a customer service facility to assist Next G users with reception problems or those users who were sold inappropriate handsets.
Conflict flared between the Australian Communications and Media Authority (ACMA), charged with evaluating the readiness of Next G, and Telstra over how it should evaluate what Conroy called an "appropriate [Next G] handset".
ACMA hit back at Telstra claims that it should not have included standard Next G phones in its report handed to Conroy, arguing that regional Australians have poor network connectivity on non-Blue Tick phones.
"It introduced [the Blue Tick] in mid 2007, which is nearly nine months after the Next G network was launched and phones were first sold," it said.
"By the end of November 2007 Telstra's Next G network had more than two million customers. By December 27, Telstra had nearly 30 devices on the Next G network but only seven with the Blue Tick.
"Handsets which do not have a Blue Tick label have continued to be sold to consumers in rural and regional areas."
The ACMA believes Next G was not up to scratch in several parts of regional Australian including along the Queensland border, and towards Bourke.
Telstra labelled the ACMA report "flawed", "overstated" and based on "rudimentary data", arguing that "appropriate" handsets are those suitable to a region.
"Even if the proportion of handsets falling short of the [connectivity] threshold is accepted, ACMA has not provided any evidence of the extent to which these handsets are actually used in fringe coverage areas rather than metropolitan and large regional centers," it said.
However Telstra communications and policy managing director Phil Burgess welcomed the government's decision and the three-month CDMA extension.
"We are also pleased that the minister has provided clear direction to Telstra and to consumers about how to proceed to make sure this transition is completed: Telstra has to fix remaining problems and consumers have to make the transition."
The ACMA, according to its report, had to consider "the extent to which a signal emitted from a base station is of sufficient strength to enable the connection and maintenance of voice calls using only an appropriate handheld mobile phone handset".
Telecommunications analyst Paul Budde said while scuffle is an indication of positive industry reform, the kinks in Next G will take longer than three months to iron out.
"Next G won't be solved in three months because the core of the problem is that it is built on 850MHz technology which is not standard 3G in the rest of the world," Budde said.
"There won't ever be a mass market for these non-standard phones and consequently there will be little incentive for mass production."
Budde said Telstra will need to build more towers around regional black spots as well as replacing affected customers' standard phones with Blue Tick mobiles.
He agreed with the ACMA statement that people in Next G black spots will need to sacrifice "stylish more portable" phones for larger Blue Tick devices because of signal processing strength.
Telstra spokesman Peter Taylor said signal strengths are variable in all cellular networks and said call drop-out rates are the same as CDMA and 2G.
"Next G call drop-outs are no different than other mobile networks like CDMA and 2G," Taylor said.
"A small number of customers have the wrong handset for their area which affects drop-outs."