Paul McIntyre: Big wet clears room on telco's big day

Just after 11am yesterday morning, the biggest "good news" story Telstra had to tell in years copped an absolute bucketing - literally.

As Telstra's controversial chief executive Sol Trujillo stood in front of hundreds of market analysts and journalists yesterday at The Overseas Passenger Terminal in Sydney's Circular Quay, the emergency sprinkler system sprung to life, showering Trujillo and his audience for 10 minutes. Most fled the room.

Trujillo initially moved to the side of the stage, crossed his arms and looked stunned. This was supposed to be his big day; one in which the North Amercian telco import could return fire at all his critics with grunt, proclaiming Telstra's A$1 billion ($1.13 billion) national mobile broadband network - announced in January - was up and running three months ahead of schedule.

Before the downpour arrived, Trujillo had labelled Friday October 6 a "truly historic day".

The "Next G" broadband mobile network, as Telstra is calling it, was a surprise for most, being ahead of schedule and on budget. Then everything came to a grinding halt. Yesterday was supposed to be a ritzy and uninterrupted six-hour investor debriefing, just three days before the prospectus is out for the Federal Government's A$8 billion Telstra share sell-off.

But Telstra's big wet - and yes, already the jokes are circulating about its darling broadband division, BigPond - was a shocker for timing and focus. The company was scrambling through yesterday afternoon, rejigging venues and presentations.

But yesterday's storm aside, there is some big news to emerge out of Telstra's Next G announcement. First, if the network is now really up and running nationally like Telstra's top brass claimed yesterday, then Trujillo has proven a big lumbering monopolistic telco can move at a fair rate when it needs to.

Certainly Telstra predicts its initiative will catapult it to market leadership in the third generation, or 3G, market by May next year.

"From today almost every Australian is going to have access to nationwide, very high speed mobiles and internet," said Telstra group managing director, consumer and small business, David Moffatt. "For Telstra, 3G is the most significant target in the highest growth sector of the industry, so from our point of view, we aim for market leadership in that area by May of next year."

It's a big, bold claim and a rather handy one as the company seeks to lob A$8 billion worth of new shares at investors.

As of last month, Telstra had 420,000 3G customers, compared with around 1 million on the Hutchison 3 network and about 200,000 at Vodafone. Telstra's forecast means it will need to sign up around 100,000 customers a month starting now.

Trujillo is very upbeat about the prospects. "No one else, here or abroad, has built and launched such a far-reaching, high speed, wireless broadband network in less than a year. It is a versatile, high-capacity network with headroom for higher speeds in the months and years ahead."

Next G, which uses high-speed downlink packet technology (HSDPA), is up to 50 times faster than dial-up and up to five times faster than existing 3GSM networks - Telstra customers will have network download speeds averaging 550 kilobytes per second to 1.5 megabytes per second (Mbps), which will increase up to 14.4Mbps next year.

Of course Telstra still has its critics, such as independent telco analyst Paul Budde who said Next G was no replacement for a national high-speed broadband network - Telstra had pledged such a A$3 billion investment but withdrew after it could not get the Government to agree on Telstra's regulatory conditions.

"Yes, this is probably a bit faster than the existing 3G network but who is going to spend upwards of A$99 per month so they can make video calls over a mobile network?" Budde says. "What Australia really needs is a high speed broadband network."

Still, Trujillo says Next G plays a critical role in Telstra's transformation to a media and communication super group. "Customers can access Foxtel, Sensis search, BigPond content, music, email, photos, downloads, maps and My Account information," he said.

And more of the media and content strategy also emerged yesterday. Telstra has resigned the broadband and mobile TV and content rights to Aussie Rules and the V8 Supercars.