In his role as Telstra's chief executive, Sol Trujillo is the most talked about and controversial telecommunications executive in Australia. ZDNet.com.au sister site CNET News.com sat down with Trujillo during a recent trip to the US to quiz him about wireless and handsets.
Telstra CEO Sol Trujillo
(Credit: Telstra)
Telstra claims it has the fastest cellular data network with downlink transmission speeds up to 21Mbps. How is the 3G network you've built different from what people experience in the US?
Anyone can deploy anything on paper. And a lot of companies say they have deployed HSPA. But if you go to Australia and use services, you will get higher throughput wherever you go, no matter what city you are in or if you're in the bush.
How were you able to do that?
Building a network is more than just ensuring there is a connection between the device and the cell tower. There's also backhaul. And the chipsets in devices need to be able to handle things like the one button, one click to enable customers to get to a store. That is all part of the experience. What is the difference between 14Mbps and 21Mbps? The 21Mbps is more real time. It's all about the experience.
And how is the experience you've created in Australia different from what people get in the US with 3G wireless networks?
We made a big bet to roll out a 3G network nationwide to more than 2 million square kilometers in 10 months. We turned the whole network up on one day. I got criticised when we announced we'd do this. NTT had rolled out 3G and it was a big yawner. And the difference in ARPU (average revenue per user) between 2G and 3G services for carriers in Europe was only about 1 or 2 euros. People weren't spending more money on the new network. And people said, "Why the hell are you spending this kind of money to build this network?" And I said, "Watch. We will create a new experience."
The difference in ARPU for us between 2G and 3G is $20 a month. Over 50 per cent of our subscribers are on the 3G network. In the US, the 3G experience is spotty. It works well in some places. But if you commute, you probably get dropped calls the whole ride to work. This is unacceptable, especially when you are surfing the web on your phone. You go to a web site and the connection drops. To reconnect you have to start all over. It's not a pleasant experience. And people aren't going to spend money on a service if they don't think it's worth it.
In Australia, people will spend money if they think they are getting a good quality service. Our data pack consumers, the ones using a data card for their laptops, are generating $90 per month in revenue per user. It's all about the experience and making sure the service works wherever you are. If you know you can count on it, you start using it more. If you aren't sure whether it will work in some places, or if you think it will have slower speeds, you won't use the service and you'll just wait until you get some place where you know you'll have consistent service.
How much faster do you think you can scale this 3G network with current technology?
We'll be able to take this HSPA Plus technology to 100Mbps between now and 2010 or 2011. But the determining factor will be how much more bandwidth consumers really need. LTE is probably the next step for 4G technology, but we haven't made any announcements yet. But 4G is a long way off, probably not until 2015.
What is the plan in terms of rolling out the 21Mbps service?
We went to 21Mbps at the end of last year. And we're offering wireless laptop data cards in the first quarter. We'll be announcing some handsets in Barcelona at Mobile World Congress that can use the 21Mbps network. They will go on sale by the middle of this year.
What's the primary focus or strategy for Telstra?
We want to make communication easy. You have to make it about one click. There are many phones and services out there that people don't use because there are too many clicks to access them.
Do you think that Apple with its iPhone has done a good job in making it easy to access new applications and surf the Internet from a cell phone?
Yes, they have done a good job. But Telstra gives consumers that, plus choice. Apple has its view. Research In Motion has its view. And Microsoft has its view. Our job is to give consumers choices, but also give them the simplicity of that one-button, one-click experience. And we don't offer this simplicity on just one phone. We offer it on all our phones, including flip phones and slider phones. The button that says BigPond or Foxtel for cable TV is right there on the phone, so users can access the broadband portal or watch TV right from their phones.
That brings up another interesting topic: Mobile TV. Foxtel is Telstra's cable TV service, as you mentioned. Do you see a lot of subscribers interested in watching TV on their phones?
People like snacking on mobile TV. They like to watch the news or they watch a big breaking news event, like what was unfolding in Mumbai last year. They want to find out what happened. And they want the latest news. They also want the latest scores for the sports matches, or they're checking the financial markets.
Here in the US, mobile TV hasn't yet taken off. What kind of uptake are you seeing in Australia?
Right now, it's building. Phones with better screen resolution are coming out and devices with better latency. One of the big things that Apple did was optimise its software operating system to reduce latency so that they could do a lot more with the phone in terms of video. "How I interact with my employees at work is different from how I interact with my children at home. The key to this market is understanding that people are multi-model and multi-environment."
What kind of subscribership does Telstra have for Mobile TV?
I'd say that that a little under 5 per cent of our Next G subscribers are viewing TV on their phones. It is growing, but I don't think it's going to be something that 50 per cent of our subscribers will be doing in the next five years. But I think we can get to between 15 and 20 per cent of our customer base to start watching TV. But when that happens it will be significant. We make about $10 and $11 ARPU on TV watchers.
6%
2%
''But the reality is that when something goes wrong with your phone or an application, everyone points to the carrier.''
Thats because the carrier is almost always the people that sold you the phone Sol.
'' We are looking at it. But the platform isn't at the stage where it's really robust. We are looking at what's being said about it in the blogosphere, and we're looking at testing it. But it's still in evolution right now.It's very Google-centric. And there are limitations. We are hopeful that it will be more open, because it offers a great alternative operating platform. But it's not there today.''
Is that how Telstra bases it's purchasing decisions... the blogosphere! From your answer it seems as if you have no idea of what your talking about when it come's to Android. But hey, I really appreciate all the buzzwords, they certainly make you sound like you do! I would _love_ to see what the clauses are in that iPhone contract...