1. ▶
EBR #3 2012 • 25
«« Handling broadband«« Strategy
▶ NETWORK QUALITY HAS always been at the heart
of Telstra’s strategy as it competes in Australia’s
mobile market, which saw the user base grow by
1.7 million to 30.2 million users between 2011 and
2012. During that period, Telstra’s subscriber
numbers grew from 12.2 million to 13.8 million:
about 95 percent of all new subscriber additions
in the country. Telstra’s market share rose by 3
percentage points, and it maintained a clear lead
in the all-important smartphone and mobile-da-
ta segments, while enjoying the highest profita-
bility of any operator in the Australian market.
One of Telstra’s key strategies following the
2006 launch of its Next G WCDMA network was
a concerted effort to move 2G users to the new
network. Many factors lay behind this strategy,
including network rationalization, coherent
branding and operational efficiency. To provide
incentives for users to move to 3G, Telstra relied
on a variety of options, such as free handset up-
grades and attractive “no premium” pricing plans.
As users moved to more advanced technology,
they became more likely to adopt new services.
But perhaps the most significant outcome was
Telstra’s ability to “empty” its 2G network and re-
farm the 1800MHz spectrum to launch Austral-
ia’s first LTE network in September 2011.
FORCED TO ACT FAST
Since the Next G network launch, the volume of
traffic in Telstra’s mobile network has doubled
every year. In late 2010, through a capacity mod-
eling tool, the operator forecast that the Next G
network capacity would run out before the new
700MHz spectrum – primed for LTE – became
available. So something had to be done – and
fast.
Spectrum refarming was not new to Telstra. It
had already successfully introduced WCDMA on
refarmed 850MHz and built a healthy ecosystem
in the process. In pioneering a global 1800MHz
LTE ecosystem, Telstra took the same approach,
playing an active role by working in conjunction
with infrastructure suppliers, device and chipset
manufacturers and industry bodies. Today,
1800MHz has become the most popular LTE band
worldwide. During the 2013 Mobile World Con-
gress, Telstra announced that it would also refarm
some of its 900MHz, another 2G spectrum band,
for LTE.
When Telstra launched the nation’s first LTE net-
work, it was seen by industry observers as a six-
month headstart on competitors that could con-
solidate the company’s already dominant position.
The launch was as much a result of Telstra’s engi-
neering strategy as of its business strategy.
Also marketed under the Next G brand, Tel-
stra’s LTE network currently covers more than 40
percent of the Australian population – more than
double the coverage of other LTE networks – and
serves over 1.5 million users. In 2012, Telstra’s
Next G network was recognized by marketing
Boosting network capacity to meet increasing demand is no easy task. Network
growth requires long-term planning – and demand can be erratic. The
history of the Australian operator Telstra’s Next G network provides lessons in
the importance of capacity planning and having a proactive spectrum policy.
Telstra’s network strategy:
Growing without pain
▶
“WhenTelstra
launched the nation’s
first LTE network, it
was seen by indu-
stry observers as a
six-month headstart
on competitors that
could consolidate the
company’s already
dominant position.”

2. 26 • EBR #3 2012
formation services firm JD Power and Associates
as Australia’s best-quality wireless network.
DECOUPLING CAPACITY AND COST
Despite the rapid rise in mobile traffic, Telstra has
been able to reduce its network cost per mega-
byte of data delivered, thanks to a continual up-
grade, over a number of years, to more advanced
radio, transmission and core technologies. In fact,
the operator’s network cost per megabyte of data
decreased by more than 70 percent between 2008
and 2011, including a reduction of 40 percent in
2011 alone as the effect of the LTE rollout began
to kick in. Telstra’s estimates show that it should
be able to further reduce this cost by one-third
between 2012 and 2014 as LTE coverage gradu-
ally expands.
In 2011, Telstra implemented a triple-access
Evolved Packet Core, allowing 2G, 3G and LTE
traffic to be pooled on the same core network.
This radical network-architecture simplification
enables the operator to handle highly dynamic
demand patterns as loads from the three genera-
tions of access networks are automatically bal-
anced. Traffic pooling on a shared core also al-
lows network maintenance to be carried out any
time during the day or night, without service in-
terruptions or revenue losses.
The deployment of a common core network
has enabled Telstra to significantly reduce the
number of nodes required to support the growth
of its mobile business. Between 2010 and 2011,
the number of core network nodes decreased by
30 percent, with an additional 10 percent reduc-
tion realized in 2012. In 2012, Telstra became the
world’s first operator to deploy a next-generation
IP packet gateway, further boosting network ca-
pacity and introducing the network intelligence
required to deliver the country’s best mobile-
phone user experience.
Telstra’s solid position in the Australian mobile
market is the result of a successful combination
of technological and commercial foresight. The
company’s transition from 3G to LTE provides a
lesson on the importance of close links between
engineering and business, as well as between the
technology solution provider and operator. ●
AUTHOR
▶WARREN CHAISATIEN is a
Strategic Marketing Manager for
Ericsson’s Region South East Asia
and Oceania, in charge of
positioning the company for
market, technology and thought
leadership across the region. He is also a Networked
Society evangelist, advancing Ericsson’s vision of a world
with 50 billion connected devices. Chaisatien joined
Ericsson in 2010, bringing with him more than 15 years of
international ICT industry experience in sales, marketing
and strategy, spanning North America, Europe and Asia-
Pacific. He holds an M.Sc. in engineering management
from the University of Technology, Sydney, Australia. (warren.
chaisatien@ericsson.com)
Telstra's unit costs per MByte (Hybrid HSPA+ and LTE)
FY09 FY10 FY11 FY12 FY13 FY14FY08
100
75
50
25
0
Index
Index based on Telstra derived network unit costs per MByte (excluding OSS/BSS)
Source: Telstra
Network rationalization paying off
“The deployment of a
common core network
has enabledTelstra to
significantly reduce
the number of nodes
required to support
the growth of its
mobile business. ”
Strategy «« Handling broadband ««