Is TelstraClear's mobile network already built?

Yes, says a source: 'The yellow towers are ours'

As speculation mounts about an impending announcement regarding TelstraClear's mobile phone plans, Computerworld has been told by one insider that the company's new network is already largely built.

"Have a look in Manukau at the cellsites down there," the source says. "The yellow towers are ours."

Computerworld's source claims TelstraClear has already built out to beyond the 10% threshold as required by the Telecommunications Act, allowing it to seek regulated access to a competitor's network. He says TelstraClear has been negotiating with Vodafone to secure roaming access on the mobile operator's network, and may have already struck a deal.

In a further twist, another source also says TelstraClear has built its network and claims it will strike a deal with Telecom to let Telecom use its W-CDMA network. Telecom would launch a new mobile brand that would roam on the W-CDMA network built by TelstraClear and Vodafone, the source claims.

The source cast this scenario as a clever use of the regulatory environment by Telecom, although the telco would run the risk that regulators might see it as a cynical manipulation of the rules.

Politicians might also decide that if Telecom is given regulatory access to Vodafone’s network, that its hold on its own national wired network could justifiably be loosened.

Roaming on the W-CDMA network would allow Telecom to roam on more overseas networks than is possible with its existing 3G infrastructure. The telco also is a part-owner of Hutchison 3G Australia, which has its own W-CDMA network across the Tasman.

TelstraClear's chief executive, Allan Freeth, refused to comment on the company's mobile plans at last month's Conferenz Telecommunications and ICT Forum, except to say "watch this space". He did however say "issues" that had been holding up the process had been overcome in recent days.

"It's been tied up but we've dealt with that," Freeth said, without explaining just what had been dealt with.

Computerworld's source says Swedish telco equipment vendor Ericsson, which has the contract to build the Wideband CDMA (W-CDMA) network in Australia for Telstra, agreed to build the initial TelstraClear network as part of the larger Australian build, avoiding the need for Telstra to report the local project as a separate stock exchange announcement.

Ericsson Australia declined requests for an interview with its Telstra/TelstraClear key account manager, saying it did not comment on customers' projects without their consent. Ericsson is also the principal supplier to Hutchison 3G Australia.

TelstraClear's network is likely to be pitched at corporate customers in the first instance.

"You just look at the corporates we've got. We've got insurance, we've got banking, we've got government," says the TelstraClear source.

One local telco analyst, who does not wish to be named, says he would be surprised if TelstraClear had reached that level of network build at this stage.

"I know they've been acquiring sites but I'd be surprised if they have actually built yet."

The analyst does concede the claim sounds credible, however, adding that the European experience is showing the uptake of W-CDMA services is not as great as network operators had hoped. "Perhaps that means Vodafone is looking to wholesale as a possible revenue stream."

The Australian government is currently considering whether to sell off a third tranche of Telstra stock and the expectation has been that TelstraClear wouldn't announce any new plans until that had been settled. Not so, says Freeth. "If investments make sense, they make sense and we'll react accordingly."

Freeth says Telstra is fully supportive of TelstraClear's investment plans and there is no call to cut things back or put any projects on hold until Telstra's future ownership is decided.

Freeth is currently reviewing the company's entire structure and direction and expects to complete that task as quickly as possible, preferably by no later than mid-August.

"There's a need to balance dialogue with speed, but I'm an impatient man."

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