Malcolm T will love this: Vodafone Germany to replace DSL with LTE

Stuart Corner
Tuesday, 23 August 2011 10:00

Opinion and Analysis

Vodafone Germany is reported to be planning to abandon the use of copper for delivering broadband services and migrate four million broadband customers to its LTE network.

The main driver, according to the reports, is the high cost of getting access to Deutsche Telekom copper, with Vodafone paying Euro 500m annually for the privilege. I'm not sure what the per line cost is.

In Australia the only likely LTE operator reselling DSL services on Telstra copper is Optus. In March, the ACCC set an interim price of $16 per month for CBDs, metropolitan areas and regional areas. This was the same as the previous Band 2 (Metropolitan) pricing. However, it represented an increase of almost $10 to the former Band 1 (CBD) pricing and a decrease of just over $15 to the Band 3 (Regional) pricing.

Vodafone Germany is reported to be preparing a bundle of services aimed at tempting its existing DSL users to adopt LTE and to sell those that fail to migrate to another fixed broadband provider. Vodafone Germany's network is already said to cover some four million households.

It claims that capacity on its LTE network will be adequate to support this number of customers, but it is very much going against the accepted wisdom, which its that mobile operators will increasingly need to offload traffic to WiFi hotspots and femtocells, like the Optus 3G Home Zone which traditionally rely on fixed line backhaul over DSL services.

However there is no reason why a femtocell could not be backhauled over a fixed LTE link, which is exactly what Ericsson is providing for the NBN in rural Australia. This would still be a more economical use of spectrum than a blanket LTE network, because of the very low power and short range of the in-home femtocells.

Now what would happen if Telstra implemented a similar policy so that when the time came to migrate its fixed line customers to the NBN they had gone mobile? The great attraction of an LTE service, of course is that the provider can easily bundle fixed and mobile services, and mobility for data is clearly becoming nigh on essential.

Regardless of the practicality of the Vodafone Germany strategy and its exportability to other markets, the idea will fuel shadow communications minister Malcolm Turnbull's strident opposition to the NBN. I eagerly await the blog.