Optus shows the money in bid to overtake Telstra

No. 2 carrier plans to spend $2 billion over two years, according to report

Optus plans to spend $2 billion over the next two years on 4G services in an effort to take on Telstra. A SingTel official revealed the plan in an interview with The Australian Financial Review.

“Optus’s purchase of vividwireless is an important first step in our aim to deliver the best performing network in Australia,” SingTel country chief for Australia, Paul O’Sullivan, told the newspaper. “And we have the [SingTel] board’s backing for that.” SingTel didn’t confirm or deny the $2 billion-over-two-years claim in a statement responding to the article. Instead, the Optus parent said Optus’ capital spending in Australia for the next financial year, FY 2013, would be about $1.1 billion.

Optus just completed a $230 million acquisition of the Vividwireless Group from Seven Group Holdings. The deal gives Optus access to 98MHz of spectrum in the 2.3GHz band for its LTE-TDD (LTE division duplex) 4G network. The No. 2 carrier also recently announced an agreement with Vodafone Hutchison Australia to share infrastructure.

The carrier has announced to build two major LTE-TDD testing facilities in Sydney to prepare for the rollout of its 4G network in 2013. Optus also plans to participate in the April 2013 Digital Dividend auction for 4G-capable spectrum.

Telstra had a market share of 42 per cent as of June 2011, according to the Australian Communications and Media Authority’s 2010-2011 Communications Report. Optus had 31 per cent market share, while Vodafone Hutchison had 27 per cent.

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