VHA moves in on Next G territory

VHA, Telstra signal 2100MHz split as hybrid telco pours funds into competitive network

Vodafone Hutchison Australia (ASX:VHA) has flagged intentions to move in on Telstra's Next G network, with plans to erect a total of 1500 base stations nationally for a new 850MHz network.

The ASX-listed telco already has 350 operational, but plans to "turn on' another 50 before the end of November.

The move comes as Telstra (ASX:TLS) and VHA signalled the conclusion of the joint venture agreement for the shared 2100MHz 3G network in 2012. The agreement, created in 2004 before Telstra launched its 850MHz Next G network, will ultimately see customers of the respective carriers roam on separate networks in the spectrum band.

Telstra chief marketing officer, Kate McKenzie, claimed the end of the ageement would bring no change for customers in both regional and rural Australia, noting the agreement’s exit would go unnoticed by customers still using the 3G network as their handsets would switch automatically to the GSM network for voice calls and SMS.

VHA chief executive, Nigel Dews, said the company was looking to expand its coverage and had to date invested $550 million in its networks. The company plans to create an additional 1400 sites on its existing 3G network, with 900 located in capital cities and an extra 500 new regional sites.

Telstra declined to comment on whether it would be investing in its 3G services in the future, however advised all customers on the 2100MHz spectrum to upgrade to Next G before 2010.

“The coverage, speeds and services available on the Telstra Next G network are far superior to the 2100MHz network so it made little sense to continue investing in the joint venture,” McKenzie said in a statement.

When the agreement comes to an end in 31 August 2012, affected Telstra customers with handsets that only work on the 2100MHz spectrum will be unable to use 3G services while mobile browsing speeds are expected to slow in metropolitan areas. However, Telstra reassured in a statement that the changes would likely only affect a small proportion of customers.

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