Telstra home and enterprise broadband users will be able to access 2 million Wi-Fi hotspots around Australia in five years if they agree to share their own connection, under part of a $100 million strategy announced today by Telstra CEO David Thodey.
Telstra said it plans to launch the network in early 2015. In addition to the shared home and business connections, Telstra plans to build about 8000 new Wi-Fi public hotspots around Australia, Thodey said.
In addition, Telstra plans to work with thousands of small businesses including cafes and shops, and partner with councils, business enterprises and governments to bring more hotspots to parks, stadiums and public buildings, he said.
Telstra customers will also be able to access 12 million international hotspots as part of an exclusive deal with Wi-Fi provider Fon, he said.
Once Telstra broadband users opt in to sharing a portion of their connection on the public Wi-Fi network, they can access all other hotspots shared on the network for no additional service cost. Data used on the public hotspots will be deducted from the customer’s broadband plan.
Initially, only Telstra's nearly 3 million home and business broadband customers can opt in, but Thodey said Telstra may allow its mobile customers to participate in the future.
Non-Telstra customers will also be able to access the public Wi-Fi network for a “small daily fee,” Thodey said.
While the service is free for Telstra customers, they must have a modem capable of sharing a portion of the bandwidth with other users. Thodey said new customers will get the new modem for free.
Depending on the age of the customer’s Wi-Fi modem, they can either get a free software upgrade or must buy a new modem from Telstra for $210.
Besides the sharing capability, the new modem announced today provides better in-home coverage and speeds, said Telstra executive director of mobile business, Warwick Bray.
Bray estimated that 500,000 existing Telstra routers will be able to be upgraded through a software update when the public hotspot network becomes available.
The hotspots will rely on Wi-Fi 802.11ac technology and can be used on ADSL, cable or – potentially in the future – 4G connections. Telstra executives said customers will not see a slowdown in their home connections if they opt in to sharing, because the modems run a test that ensures sharing is active only when the user has capacity to spare.
In addition, the current iteration of the modems are only able to share connections to up to three visitors at any one time, said Mike Wright, Telstra group managing director of networks. That number is in addition to however many devices the modem owner wants to connect.
Users with devices containing SIM cards and Wi-Fi chips will be able to switch between their mobile network and Telstra Wi-Fi networks at will, Telstra said.
The pause in switching between the networks will be the same length as switching between mobile and a home Wi-Fi network, said Wright. The same goes for switching between two different Telstra Wi-Fi hotspots when on the go, he said.
Smart cities and enhanced rural connectivity
Thodey said the network could fuel development of Australia’s urban areas into smart cities in which connected sensors are used for parking, waste management, transportation, energy metering and more.
“All these new applications need a different type of wireless network and so we think this will be the foundation of that,” said Thodey.
The Wi-Fi network opens up several new business models for Telstra, he said. For example, Telstra has already started to roll out a Wi-Fi network in ANZ Stadium in partnership with the stadium owners.
Telstra could enter into revenue sharing or advertising-based models, depending on the partnership, he said.
Regional Australia also stands to benefit, said Thodey.
“Often they don’t get access to new technologies, so we’re going to try and roll out this capability to a large number of regional towns as well.”
Thodey downplayed analyst statements that another key benefit of the Wi-Fi network is to offload data from Telstra’s cellular network and reduce congestion.
“It’s not that actually,” he said. “The cellular network is great if you’re on the move, but if you’re sitting down watching a few videos, it’s a different type of access that you want.” Thodey said he doesn’t expect current mobile broadband customers will cancel service once the public Wi-Fi network comes online. That is despite the fact that a Telsyte report released this week found that an abundance of Wi-Fi hotspots in Australia was one reason telcos are struggling to grow their mobile broadband customer base.
“The fact is that the demand for access and content has grown so quickly, we don’t think there will be substitution,” Thodey said. “We still think the cellular mobile network will have a great future and we think people will use [the Wi-Fi network] as well.”