John Linton
.....so why has there been 'bad press' concerning the performance of the Optus 3G network?
Over 100 of the early users of the HSPA/Optus service have now 'reported back' regarding their early experiences and impressions of using HSPA in every State capital city, the ACT and more than 40 regional locations (mainly in NSW and QLD but at least one in every other State). With 3 exceptions (two of which turned out to be 'configuration' issues) all report that the service performs at or above, in 22 cases well above, their expectations.
All but 4 stated the set up was extremely simple and required little more than plugging the modem in or following the instructions for mobile handset activations. All but one user said that VoIP using a mobile handset (either Exetel's or another providers) was of excellent quality (several said better than a mobile call) and some users said they actually achieved speeds in excess of 3 mbps.
It's very early days of course and these 'early adopters' are likely to be above average technically and phone competent. However I have to say I'm more than pleased that the 'horror stories' reported so gleefully by the anti-Optus press have been conspicuous by their absence. My own limited testing of the HSPA service was 100% positive in several locations in Sydney (including the alleged 'dark hole' in St Leonards) and I've seen/heard nothing since we shipped the first sims and modems to change that cautiously optimistic view.
I am encouraged by these early results and will continue to monitor the service performance closely over the coming weeks. Tonight we will 'turn on' the direct feeds in Melbourne and Sydney and move from the full Optus 'platform' we have been using to the full Layer 2 service we have based the current offerings on. A nervous night for a few of us here and at Optus.
Obviously I read what the carriers are doing with their 3G offerings and, to some extent, what companies who buy Layer 3 services (iPrimus, Dodo) are doing with the 'standard' carrier plans they buy from the carriers. The price per gb war seems to have run its course, at least until the 'buy now for Christmas' activities commence though the recent flurry of decreases/increases in the "pre-paid" offers I found strange. I read this brief report on Vodafone's latest pricing:
http://www.itnews.com.au/News/86271,vodafone-struggles-with-mobile-broadband-pricing.aspx
and you may remember this report on Optus' price increases from last week:
http://www.itwire.com/content/view/21036/1103/
So what do you make of it?
Vodafone effectively positing that the retail price of a gb of HSPA traffic is $A8.00 and Optus saying it has a cost of $A30.00. (meanwhile iPrimus, who resells an Optus HSPA Layer 2 'bundle' says the price of 1 gb is $6.50. Telstra, of course, says that the price of 1 gb is $A60.00 because it is better data that goes faster in more places - but then Telstra doesn't really figure in this situation for all of the usual reasons.
When I was in London in early August investigating what possibilities might exist for Exetel to operate an HSPA business in the UK/EU I learned a great deal (at least from a zero knowledge base it seemed to be a great deal) about buying wholesale HSPA data. At realistic levels (100,000 users a year) the prices quoted by three carriers were almost identical - the equivalent of $A0.006 per megabyte plus VAT. This would make the COST price to a buyer around 1 Australian cent including the network components of delivering the data in usable form to the end user - meaning 1 gb of data would COST $A10.00 without adding anything for a profit margin.
Personally I can't see that the Australian carriers have any better economies of scale that their UK counterparts (I would think the reverse would be the case). So I'm truly puzzled at how iPrimus buys wholesale from Optus yet then sells at 40% below the cost of the raw data in the UK. The answer is, of course, that Optus don't charge iPrimus per gb of data but, as it's a Layer 3 offering, they charge them for an Optus plan minus a discount. Which, of course, makes it even more puzzling that Optus is able to accommodate a price of $A6.00 per gb minus a wholesale margin and minus their own margin. Some magic has been done after crossing the equator apparently as the much larger UK carriers don't seem to be inclined to offer that sort of pricing - and I don't mean to Exetel - I mean to a wholesale customer doing 10,000 sign ups a month.
And then you add in to this mix the recent increase by Optus of their pre-paid service that sets a retail price of around $A30.00 per gb which seems just a touch too high? I have no idea what it all means.
So, having been pleasantly surprised about how well the actual performance of the Optus HSPA/3G network has 'turned out' our major concern is to establish a profitable price point at which we can sell a realistic HSPA service - and I'm 100% certain that $A6.00 per gb could only result in a massive loss at the rates we buy at - which I thought at the time were pretty reasonable for the coming six months. I really must back away from commercial negotiation - I'm obviously past my use by date if iPrimus can buy at one third of what Exetel buy at!
Then again..... Optus, Optus/Virgin and iPrimus HSPA/Optus users apparently have a different experience than the few early Exetel users which must mean.........
......it's all beyond me........because it can't mean what the obvious explanation a non-technical network person like me would conclude it meant.