Using Nortel Networks' CDMA2000 1X digital wireless technology Telstra is offering low-end 3G data rates to the corporate sector after trialling the service with 29 businesses in Melbourne and regional Victoria.
According to Steve Wood, Australia and New Zealand president for Nortel Networks, Telstra's CDMA2000 1X rollout has already been completed in greater Sydney, and Melbourne, with upgrades also underway for Canberra, Brisbane and the Gold Coast.
Gartner Dataquest analyst Geoff Johnson pointed out today's announcement enables Telstra to launch into the 3G market without the major capital expenditure associated with higher data rates.
"There is no way Telstra would scare the market at the moment by announcing a major capital expenditure, this way they can dip their toe in the 3G water and expand on the capital investment they already have in their CDMA network," Johnson said. "This kind of upgrade would have cost somewhere in the vicinity of AU$100 to AU$150 million, whereas a fully fledged 3G service would cost upwards of AU$1 billion."
While the service is being promoted as offering speeds upwards of 144Kpbs, Johnson believes it is more likely to operate at a speed somewhere in the vicinity of a dial-up modem.
Having rolled out similar infrastructure in the Americas and Asia, Nortel Networks is confident of continuing to grow its 3G market base despite the difficulties being experienced by the Telco sector.
"Our wireless data networking solutions have been well received around the world, because they allow the telecommunications providers to derive new revenue streams out of existing infrastructure through offering data services," Wood said. "Because the technology expands on existing infrastructure they can protect their initial capital investment, reduce operating costs and grow their business."
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