March 7, 2007

The State of 3G in Australia

Australians are well known for their appetite for new technology. Yet four years ago when 3G (third-generation) finally arrived here we sat on the sidelines and scratched our heads. We already had phones that were really useful for making voice calls and sending SMS messages. Now, here were the phone companies trying to tell us that we should also use our handsets to watch TV, download music and take the Internet with us wherever we went.

Four years later the 'killer application' is still voice and SMS but with pricing of data services finally becoming competitive, and with the advent of 'call caps' (where you pay a set monthly fee and receive a generous allowance of call credits) 3G is here to stay. Some data is still too expensive (like $4.95 music downloads over Next G) but slowly the carriers are reducing the prices of data on their networks as they see usage increase.

The Telstra 'Next G' network is the biggest 3G network in Australia and covers 98.8% of the population with it's latest technology based on the HSPDA standard (High Speed Packet Data Access). Next G offers true broadband speeds (up to 14.4Mbps) to mobile devices including phones and laptops. Other providers like Vodafone, Optus and 3 have also recently launched their own HSDPA products. HSDPA's primary benefit is broadband speed but it also offers other advantages like better long distance coverage and building penetration. That means less call drop-outs in elevators.

The 'killer application' for mobile phones is still voice - it's still what most people use their phones for most often. But over the last four years, since 3 switched on its network consumers have been steadily increasing their appetite for mobile content. For example, over 70% of 3's customers have accessed some form of content on Planet 3 (3's mobile Internet) while their 24/7 cricket channel recently passed the million view mark.

All of 3's customers (one million) are on the 3G network already but for Vodafone, Telstra and Optus 3G adoption has been slower. Vodafone and Optus recently passed the 250,000 customer mark while Telstra has signed up over 400,000 customers to Next G since its October 2006 launch. The driving force behind 3G adoption is handset upgrades (these occur every 2-3 years) rather than customer demand for new data services. However with recent changes to data pricing uptake for 3G services is increasing.

Content is king on 3G phones with all the telcos looking to squeeze more money out of you by offering additional data services. When choosing a 3G provider it's important to pay attention to pricing and content availability. For example, if you are in to the cricket 3's network will be most attractive to you with their 24/7 cricket station. If you like music you should consider Vodafone Live with the largest range of tracks to choose from (over half a million). If Mobile TV is your thing you can't go past Telstra's Foxtel offering where you can access 12 stations for $12/month.

If you are looking for mobile broadband (to use on your computer) the choices are equally confusing. All providers offer 'data' bundles and access to high speed networks. If you are confined to inner city check out 3's and Vodafone's new range of data cards. Both offer access to HSDPA at a reasonable monthly fee. If you live outside the city choose Telstra's Next G network as it offers the largest coverage in Australia.

You'll also need to invest in a new handset to take advantage of 3G features. The Motorola Motorazr V6 maxx ($729) is a great looking phone that works superbly on the Next G network. It is easy to use, sits well in the hand and eats multimedia for breakfast. Streaming Foxtel is truly watchable and it's camera works well. If you are into music choose the newly released Sony Ericsson W880i - the latest line of 'Walkman' branded phones. It's 3G enabled and comes with 1GB memory card that means you'll be able to store hundreds of songs in your pocket. Best of all it's super thin and weighs only 71 grams.

The carriers are quickly realising that data is becoming an important part of their business. For true take-up of 3G data services need to be cheaper. Consumers shouldn't have to worry about the cost to access 3G content. Alongside this change manufacturers like Sony Ericsson and Nokia need to keep producing phones that are easier to use while adding additional functionality. When both these changes occur 3G services will move from 'nice to have' to 'can't live without' and will become a reason to upgrade, not just an extra perk.