Telstra defends 3G deal with Hutchison

August 12, 2004

Telstra fought back criticisms that it has overpaid for the 3G mobile phone infrastructure sharing deal with Hutchison Telecommunications. The firm announced earlier this month a deal worth A$450 million for a 50% stake in Hutchison's Australian 3G network.

Telstra said at the time of the deal that the sharing agreement is the most time and cost efficient way for Telstra to offer 3G services. If the firm decided to build their own 3G network it would cost between A$900 million to A$1 billion.

"We're absolutely convinced that doing the infrastructure sharing deal with Hutchison was a good move," said Telstra Corp chief executive Ziggy Switkowsktold. "It was good from a Telstra strategic and tactical point of view."

Telstra is aiming to launch the service in mid-2005 and hopefully before its rivals Vodafone and Optus.

Optus was one of those that criticised Telstra, saying it had overpaid in the deal with Hutchison. The company's incoming chief executive Paul O'Sullivan said Telstra looked like they have overpaid because Optus "could do a similar number of base stations for about half the price".

Hutchison is the only operator to have a commercial 3G network in Australia and has installed around 2,000 base stations. If the sharing deal between Telstra and Hutchison goes through, both companies will share the cost of expanding the network, but both companies will continue to market their own services.