Wideband CDMA, here we come

Is it all a bluff or are we actually going to get two competing wideband CDMA networks from TelstraClear and Vodafone (and the chance of a third when and if Telecom jumps into the fray)?

Is it all a bluff or are we actually going to get two competing wideband CDMA networks from TelstraClear and Vodafone (and the chance of a third when and if Telecom jumps into the fray)?

For me, it's a bit of a dilemma. On the one hand I'd love to finally see true industrial-strength cellular competition in New Zealand, but on the other hand the financial outlay of building two practically identical networks is surely prohibitive. Costs will inevitably be revisited on to customers.

Neither TelstraClear nor Vodafone have yet confirmed what shape their networks will take, nor their likely budgets, but they have to run into lots of millions of dollars each. Telecom's CDMA network set the company back around $200 million in the last century, and that didn't include the upgrade to 1xRTT that brought the top speed to a pleasant and balmy 155Kbit/s.

W-CDMA tops out at 384Kbit/s, which, on a pleasant day with a headwind, pans out to around 200Kbit/s. Not too shabby, you might say, and you'd be right. Except there's a catch.

Both Vodafone and TelstraClear are talking about building networks that start off as urban-centric, CBD kinds of thing. Think Islands in the Stream without Kenny Rogers and Dolly Parton and you're halfway there. By the end of next year they'll both be on their way to offering a service, but only for those living in the main centres. Will the network rollout expand to all parts of New Zealand? Who knows?

And where does that leave Telecom in all of this? Sitting quite pretty, I would think.

Telecom already has a national network. It's only just begin promoting Mobile JetStream and Go 27 in a big way and users are only just beginning to take up these fast data services. There's no real need for Telecom to spend another couple of hundred million just at the moment, so it's not going to. It's sitting tight, watching the market and taking its time over the next step. Telecom has an agreement with Hutchison, which runs the 3G network called "3" in Australia, and is pondering a network of Wi-Fi hotspots to take the heat out of W-CDMA's speed advantage when it does arrive.

If it's aggressive in its Mobile JetStream plans Telecom has a good chance of taking over a huge chunk of the mobile data market. After all, who wants to sign up to the promise of 200Kbit/s in the city centres in 18 months' time when you can have 100Kbit/s almost anywhere today?

It would make more sense to me if TelstraClear and Vodafone worked together on a W-CDMA network, and I think that's probably the plan when all the dust settles.

TelstraClear already has a reseller arrangement with Vodafone which it's been trying to extend this in recent months. The problem for TelstraClear is that its relationship with the Vodafone network is similar to its relationship with Telecom's local loop -- namely that it's a reseller of services and nothing more. TelstraClear wants to be able to offer its own services at its own price points, and to do that it needs to either build its own network or control the application layer of the network it uses. Chief executive Rosemary Howard has expressed a preference for buy over build in the past, and it seems to me that the lack of a contractual agreement with Vodafone is all that stands between TelstraClear and such a deal using GSM/GPRS.

Whatever the case, the battle of three titans in the mobile marketplace over the next 18 months or so must be good news for customers. Cheaper mobile data, here we come.

Brislen is IDGNet’s reporter. Send letters for publication in Computerworld to Computerworld Letters.

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