The jury is still out on the economics of HSDPA services

Stuart Corner
Friday, 13 July 2007 09:32

Opinion and Analysis

It's a shame that Australia's dominant fixed line carrier, Telstra, is also the largest mobile operator both by subscriber numbers and, more importantly, by coverage. Because this prevents us from seeing what might happen if a cellular network operator using HSDPA went head to head in competition with a fixed broadband operator.

This is happening in Europe where, earlier this year one 3G operator started offering all you-can-eat HSDPA data plans at 3.6Mbps downlink speeds for Euro20 per month. In just ten weeks, traffic on its network increased fourfold.

This story was recounted to me by Mikael Halen, director government and strategy with Ericsson in Sweden, who visited Australia recently to push the case for HSDPA and 3G wireless broadband against WiMAX, and particularly for appropriate spectrum allocations. (this was before the Opel deal was announced).

You may recall, as iTWire reported late last year, Ericsson recently abandoned work on WiMAX, saying it would concentrate instead on HSDPA and the next development, Long Term Evolution (LTE). According to Halen, the arguments in favour of HSDPA are overwhelming, due in part to its momentum in the market place.

"We have more than 100 HSDPA networks around the world, and in the fist half of this year the number of HSDPA devices more than doubled to over 250..."We are now at 3.6Mbps on the downlink and the first 7.2 networks are opening up. Early next year we will see the first 28Mbps networks and 40Mbsps at the end of next year... And just around the corner, in 2009 we will have LTE. This will take us way above 100Mbps.

This is all very well but nothing to get excited about if cost limits usage to power user 'road warriors' for whom connectedness and capacity are more important than cost.