Australian WiMAX: A Disagreement

Australia’s first WiMAX operator has branded the technology as a “miserable failure” and has decided to close its WiMAX network which they described as a “disaster,” says NowWeAreTalking.com, a website sponsored by Telstra, Australia’s incumbant telephone and broadband provider.

Head of Public Policy & Communication for Telstra, Dr Phil Burgess has called on the government “to finally terminate the failed $1 billion OPEL give-away”, a nation-wide WiMAX program.

“Today’s revelation is another nail in the coffin of Opel, providing even more compelling evidence that the government needs to terminate the $1 billion give-away of Australian taxpayers’ money to the failed Optus/Opel consortium.” Dr Phil Burgess said.

Buzz Broadband CEO Garth Freeman “slammed the technology” at an international WiMAX conference in Bangkok. The CEO also said that WiMAX was “mired in opportunistic hype.” Buzz Broadband was the first operator to use the WiMAX technology in Australia. Buzz used 3.5GHz for customer access, 5.8 for backhaul.

Dr Burgess went on to say, “We have been telling this story for months. It’s time to wake-up. The wireless community understands the truth. The market understands the truth. Consumers are learning the truth. The technology community understands the truth. The truth is that WiMAX does not work; a truth that is widely recognised around the world.

Buzz Broadband, which competes against Telstra, used Airspan’s AS.MAX solution to deliver WiMAX service across a 30,000 square kilometer region in Queensland, where they hold 3.4GHz licenses. Buzz says indoor penetration of the fixed (802.16d) system was poor as was reliability and is now moving towards a 1.9 GHz (TD-CDMA) system and trying a “wireless cable modem” technology with a mesh architecture to reach the last mile.

Optus was created to provide competition to then government owned telecommunications company Telecom Australia; now known as Telstra. In June 2007, a joint venture subsidiary of Optus, called OPEL Networks was the sole successful bidder of the government’s plan to bring broadband to large parts of Australia. OPEL Networks received $600 million under the program. The Howard Government later decided to allocate a further $358 million to extend broadband to 99 per cent of Australians (pdf).

Telstra is the largest provider of both local and long distance telephone services in Australia, and provides mobile phone services, dialup, wireless, DSL and cable internet access.

Optus, Australia’s 2nd largest communication company, has brought competition to Australia’s Telstra since the late 1980s.

Telstra claims that Optus WiMAX wrong-headedly duplicates Telstra’s 3G network with an incompatible WiMAX network and is unfairly subsidized by taxpayers. Optus disagrees. It says it provides competition and services that monopolist Telstra doesn’t.

On 18 June 2007 Australian Prime Minister, John Howard announced OPEL, a joint venture between Optus and Elders, and secured $958 million in funding from the Australian Government under the Australia Connected programme.

OPEL is intended to deliver affordable broadband services to rural and regional Australians at metro comparable prices. The OPEL joint-venture paid US$65 million to acquire Austar’s 2.3GHz and 3.5GHz spectrum to set up its national WiMAX voice and internet service.

TellTheTruthTelstra.com, a website sponsored by supporters of the WiMAX-enabled broadband vision say; “Telstra has claimed that any operational or functional split in the company would destroy its share price, hold back infrastructure investments, cost consumers more in the long run, and simply could not be done.”

“Telstra is clearly fearful of losing its monopoly through splitting up the company, and is once again pushing outdated propaganda to persuade the public it can’t be done.”

Start-ups like Personal Broadband (using Arraycomm) and Unwired (using Navini), made early moves in Australian cities like Sydney, pioneering mobile broadband data services before many operators had found a viable business model in other countries, explains Caroline Gabriel. New Zealand’s Woosh Wireless uses the TD-CDMA standard promoted by IP Wireless (now NextWave Wireless).

Now consolidation is taking hold.

Unwired became a takeover target for TV and telephony service provider Seven Network. It was widely expected that the company would also acquire the WiMAX licenses and activities of pay TV operator Austar, which has a spectrum partnership with Unwired. However, Austar instead sold its interests to Opel Ventures, a joint venture of Optus and rural service provider Elders, for AUD 65 million ($568m).