Fran Foo | August 19, 2008
VODAFONE and Optus yesterday simultaneously unveiled new mobile broadband offerings that could sound the death knell of wireless internet service provider Unwired, owned by the Seven Group.
Five major telecommunications players are jostling for mobile broadband supremacy
Both telcos are banking on internet-enabled USB keys to connect subscribers to the web on their 3G/HSPA networks.
Vodafone claims it can provide up to 7.2Mbps in connection speeds compared with Optus's maximum 3.6Mbps for mobile broadband.
Now, Australian consumers have more choice than ever, with the five major telecommunications players jostling for mobile broadband supremacy in a market that's tipped to close in on $2 billion in four years.
Vodafone will offer various plans for existing customers and non-subscribers over a 24-month period.
For 1GB, Vodafone users without a voice plan will pay $34.95, including $5 monthly for the USB key.
It will cost $29.95 for those with a contract.
Vodafone will charge 10 cents per megabyte, or $100 a gigabyte, for additional data usage.
Optus already has a post-paid mobile broadband product but is hoping the new prepaid plan will attract both local and foreign wireless broadband users.
The country's second-largest telco announced a special offer of $199, including USB key (with SIM card) and 2GB of data, to kick off its prepaid mobile broadband push.
The deal will last for two months and Optus is not revealing pricing plans thereafter.
"The current offer will be available until November 2008. However, as outlined in the terms and conditions, the offer may expire or be withdrawn at any time," an Optus spokesperson said.
"We don't currently have a pricing plan available on any replacement offer."
The company said recharge vouchers could be purchased on its website or from retail outlets including 7-Eleven, Woolworths, Target, Coles, Dick Smith and Video Ezy.
Leading analysts said Unwired's days were numbered, as Optus and Vodafone levelled the playing field.
"This has really hammered the nail in Unwired's coffin," Gartner Asia-Pacific research director Robin Simpson said.
Telsyte research director Warren Chaisatien said the next few months would be "interesting" for Unwired.
"With Commander going belly-up, having purchased wireless broadband player iBurst recently, I don't see how Unwired can survive," Mr Chaisatien said.
"Unwired's services uses WiMax technology and it's unfortunate that WiMax is not going anywhere," he said.
Unwired spokesman Richard Bean laughed at naysayers and dismissed its rivals' products.
"These products have no particular impact on our business. We welcome the fact that they're doing this and educating the market on wireless broadband.
"It will be interesting to see if Vodafone and Optus can deliver on their network coverage promises. We have a vastly superior network infrastructure," Mr Bean said.
Commercial services for Unwired national metropolitan WiMax network have experienced numerous delays.
Since early last year Unwired has been planning to expand its network beyond metropolitan Sydney and Melbourne and into other major cities but the work could take another year or two to come to fruition. Despite the setback, Unwired says it has a viable business model and will continue to exist over the next 12-24 months.
"We're absolutely confident we'll still be around," Mr Bean said.
An Australian Communications and Media Authority report notes that between 2005 and 2007 the wireless broadband industry increased from 2 per cent to 9 per cent to reach about 480,000 subscribers.
In its latest earnings announcement Seven did not reveal Unwired's latest subscriber numbers but in late 2007 the latter listed 70,000 customers as its base.
According to Telsyte, Australia's consumer mobile broadband spending will double from $160 million in 2008 to $320 million in 2012.
"Overall mobile broadband spending - consumer and business - will more than double from $750 million in 2008 to $1.7 billion in 2012," Mr Chaisatien said.
Telstra continues to lead the pack with 63 per cent market share in the 3G mobile data market, he said, followed by 3 Mobile (24 per cent), Optus (10 per cent) and Vodafone (3 per cent).
Mr Chaisatien expected wireless broadband prices to dramatically dip in two years.
"In about 24 months we could see pricing halve to $29 for 5GB," he said.
However, both Mr Chaisatien and Mr Simpson believe Telstra will not decrease its prices as a result of competition.
"Telstra knows it has very good coverage for its 3G network compared with the others and businesses and consumers will pay for that premium," Mr Simpson said.
Both analysts agree that despite high interest rates and fuel costs, coupled with other household spending pressures, the timing is right for truly wireless broadband to take off.
Meanwhile, Optus Consumer data products general manager, Jeremiah De La Cruz, said its offering was better compared with Vodafone's, as people do not go overboard with data downloads.
"With prepaid, we stop you once you've used up your data allowance," Mr De La Cruz said.
"There're no extra usage charges and they can plan and budget accordingly."
He said overseas visitors could purchase Optus prepaid cards for mobile broadband much like they would for mobile phones.
"If they have the right hardware ... the USB modem, then all they have to do is buy these cards and they can start getting online," Mr De La Cruz said.