Telstra sidelines videophone option for now

By RICHARD BRADDELL

MELBOURNE - While the potential for full-stream video offered by third-generation mobile services is the buzz of telecommunications, Australia's telecommunications giant, Telstra, has no intention of going there soon.

Vendors such as Nokia and Ericsson commonly produce mobile videophones as examples of what the next generation holds, but Telstra regards that as unlikely, instead seeing the development of the so-called third-generation (3G) cellular as a response to the intense demands on finite spectrum resources as voice traffic soars in high-density markets in Europe and Japan.

The promise of 3G is that it will provide more capacity - perhaps three times as much - for less cost over a given amount of spectrum, according to Garth Price, the general manager of mobility and wireless at Telstra's Melbourne research laboratories.

"What 3G does is raise the ceiling of use fantastically," he said. "In Japan and parts of Europe, they are desperate for spectrum and they are desperate for spectrum for voice, not data."

That is not the case in Australia, where relatively low population densities place spectrum under less pressure. The same is true for New Zealand, too, where the auction of 2GHz spectrum earmarked by the International Telecommunications Union for third-generation services is set to kick off.

While estimates of the likely sale price have ranged into the hundreds of millions of dollars, there is strong expectation that the whole lot could go for less than $100 million, particularly after the new Government's decision to cap individual ownership so that at least four competitors will get a slice.

Another issue is the affordability of 3G, for consumers as well as networks, given that both Vodafone, and now Telecom, have heavy investment in second-generation services.

"In Australia, we have a lot of spectrum for voice and we are not pressed for voice and we are driven by the data paradigm alone," Mr Price said.

Because Telstra was not troubled by spectrum scarcity, it was instead looking to develop what he called 2.5G services that would extend data capabilities on existing GSM and CDMA digital networks.

In common with Vodafone in Australia and New Zealand, Telstra is trialling GPRS, a packet switched technology that extends the capability of GSM from 9.6 kbp/s to as much as 144 kbp/s.

Next year, it will begin work on 1XITT, a packet switching add-on that offers similar near-3G benefits for its new second-generation CDMA network.

"Once you go from circuit to packet, you can be extremely efficient with your spectrum. But more importantly, from a customer perspective, you offer a service which is totally different," Mr Price said.

Instead of a mobile internet user having to dial in every time, users will have a service where the phone can be left on without incurring horrendous airtime charges. "It's like having a LAN [local area network] and walking around with the LAN always on," Mr Price said.

Telstra expects to tap the potential of the two fastest-growing areas of telecommunications - mobile and the internet - and demand is expected to be stellar, particularly since trialling of relatively sophisticated, if slow, systems in Japan has gone so well.