Telstra vs Optus: iPhone 3G, revenues and you

Alex Zaharov-Reutt
Saturday, 14 June 2008 11:41

Your IT - Mobility

Telstra’s legal letter to Optus shows that Telstra hates losing, and until Telstra announces it has the iPhone 3G too, it’s the big loser in the iPhone 3G stakes. What are the facts on coverage issues?

Aside from being one of the coolest tech toys of the 21st century, why do telecommunications carriers want the iPhone 3G?

Well, it’s very simple. Apple is cool, and telcos are hoping some of that cool rubs off on them – and with it comes monthly revenues and the chance to churn some customers away from the competition.

In the Australian market where Telstra has millions of customers, anything Optus and Vodafone can do to get more customers is worth doing, short of losing money which helps no-one.

Because Telstra hasn’t yet announced that it too will sell the iPhone, we can only assume, for now, that it won’t, sad though that will be for Telstra customers – especially those in rural and regional Australia – that were hoping to get the iPhone 3G and use it as a broadband speed device.

Telstra has also sent a legal letter to Optus saying that it refers to “Optus' press release on 7 May 2008 in which Optus announced that the planned expansion of its 3G network would be achieve using the 900 Megahertz (MHz) spectrum utilising High Speed Pack Access (HSPA) wireless broadband technology.”

In this press release, Telstra notes that “Optus states that it would “embark on an investment program to expand its nationwide mobile network beyond 96 per cent population coverage to reach 98 per cent”.”

Telstra notes that Optus’ 3G expansion will include 900MHz 3.5G equipment, which not all 3G devices are compatible with. While Telstra doesn’t mention the iPhone 3G, it seems obvious they are referring to it when Telstra’ letter notes: “Telstra is concerned that Optus may represent to customers that they can enjoy a range of 3G features and services with Optus using a 3G device and that they will be able to access those services in more places as Optus expands its network. However, in fact those features and services will not be available if the 3G device is incompatible with Optus’ 3G 900 Mhz network.”

Telstra’s letter stated it believed Optus might be engaging in “misleading or deceptive conduct”, that it would “continue to monitor Optus’ claims in relation to use of 3G devices on its 3G 900MHz network, and will not hesitate to take such action as is appropriate” and that it reserved its rights.

Wow. Heavy stuff. So, what’s the true position of Optus and Vodafone on the topic, as far as I can tell? Why did Apple not include a 900MHz chip in the iPhone? How did Telstra end up in this mess? Don't stop here - please read on to page 2.