Analysys hits back at criticism of ACCC wireless report

Stuart Corner
Wednesday, 19 July 2006 08:03

IT Industry - Strategy

Telecoms industry research company Analysys has refuted claims by another researcher, Network Strategies, that its study, prepared for the ACCC, comparing the costs to Telstra of delivering wireless and wired services was seriously flawed.
The primary aim of the Analysys study was to provide a high level estimate of the costs of alternative next-generation access networks to supply voice and data services in more rural areas, classified by Telstra as ULLS Bands 3 and 4, and an indicative costing for other exchange service areas.

Analysys concluded that, in rural areas, WiMAX may provide, for Telstra, a lower-cost alternative to wire line access solutions for voice and data services and that 3G and later-generation mobile technologies may also be cheaper than wire line solutions in some areas.
In a review  of the study, Network Strategies said its key conclusion of this study "are likely to be invalid, or at least questionable, due to weaknesses within the cost analysis methodology and assumptions." According to Network Strategies. "The problems we have identified are sufficiently substantial that they cast significant doubt on even the high level results of the model...We conclude that the Analysys results should not be interpreted as an accurate reflection of the comparative costs of wireless access technologies in Australia."

However, a spokesman for Analysys told iTWire that Analysys had checked its modelling work on wireless costing in light of Network Strategies' comments and had found that all the conclusions drawn in its report remained valid.
 
"Analysys acknowledges that access to more reliable Australia-specific information on voice traffic and business numbers would have assisted its modelling work. However, the results are not very sensitive to assumptions regarding voice traffic; the main demand driver is the broadband forecast, which Network Strategies has not brought into question. Even if we assume that Network Strategies' information on voice traffic is correct, the impact on our cost estimate per line for WiMAX in Bands 3 ands 4 would be less than two percent."
 
Network Strategies also claimed that: "The Analysys modelling does not estimate the costs of a realistic [wireless] network in the key areas of: voice service and demand to meet universal service requirements; WiMAX coverage and capacity restrictions; spectrum allocations and availability in Australia; real-life engineering of the coverage of wireless access systems; capacity and coverage of 3G/HSPDA systems."
 
The Analysys spokesman said: "In regard to issues such as the WiMAX and HSDPA capacity-coverage relationships, frequency re-use and spectrum availability there can be honest differences of opinion. However, we have never suggested that maximum channel bandwidth is available at maximum coverage. Our decision to model WiMAX at 3.5GHz was driven by access to more reliable data on unit costs but we were mindful of the availability of additional spectrum at 2.3 GHz, which also has better coverage properties."