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Vodafone Reveals Antipodean 3G Plans

August 14, 2003 - source: BWCS

Vodafone’s subsidiaries in New Zealand and Australia have revealed contrasting approaches to the rollout of 3G services. In New Zealand the company has announced that it is investing hundreds of millions of dollars in deploying W-CDMA services within the next 18 months. The first trial services are expected to be up and running within six months and Vodafone New Zealand has already garnered interest in the 3G offering among its business users.

Across the Tasman Sea, Vodafone’s Australian operation is taking a much more conservative approach to 3G. The company has stated that it is not looking to launch any 3G services before mid-2005. In addition Vodafone is seeking partners to cooperate in a nationwide network rollout in an effort to reduce costs.

The differing 3G stances of Vodafone’s two antipodean businesses is a consequence of both their relative market positions and the huge difference in the scale of the countries they operate in. Over the past twelve months Vodafone New Zealand has successfully overhauled incumbent operator Telecom New Zealand to become the number one mobile carrier with a 52% market share. Vodafone Australia is the country’s third largest mobile network with a steady market share of around 18%.

In terms of raw subscriber numbers Vodafone Australia controls 2.59 million subscribers as compared to the 1.35 million signed up by its New Zealand affiliate. Although this indicates that the former has more to gain from the introduction of 3G services in terms of revenues, it is faced with the cost of covering a market 30 times the size that of New Zealand – hence the need for a joint network rollout.

This highlights one of the key challenges that Vodafone faces as it tries to standardise its operations around the globe. In order to coordinate the launch of 3G services on a global or even regional basis its timing must be dictated to some extent by the market with the slowest pace of deployment. In reality the company will be looking to launch W-CDMA across all its markets within a 6-12 month window but given the complexities and cost of 3G even that would seem a Herculean task right now.

 


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