Telstra launches NEXT G network

Telstra has launched its new "NEXT G" 3G network with much fanfare today, promising real world speeds of between 550Kbit/s and 1.5Mbit/s to customers nationwide.

"No one else, here or abroad, has built and launched such a far-reaching, high speed, wireless broadband network in less than a year", said Telstra CEO Sol Trujillo. "It is a versatile, high capacity network with head room for higher speeds in the months and years ahead".

Like its competitor Vodafone, Telstra is using High Speed Downlink Packet Access (HSDPA), with theoretical maximum download speeds of 3.6Mbit/s. Telstra claims that in March next year it will be able to offer peak speeds of up to 14.4Mbit/s and in 2009 up to 40Mbit/s. But based on existing disparity between claimed and actual speeds for wireless networks, the real world performance for the end user is likely to be much lower. Telstra admitted that users will initially see speeds of between 550Kbit/s and 1.5Mbit/s.

The emphasis in Telstra's briefing today was on two things — coverage and content. In terms of coverage, Telstra says its network is larger than all the other 3G networks combined, and will reach up to 98% of the population.

In terms of content, Telstra touted all of the traditional mobile products — video calls, mobile TV and music downloads. These are already available from competitors, but Telstra will be hoping that the breadth of its content will be attractive to potential customers.

To use the service for broadband data access, Telstra is offering a "NEXT G turbo card". But pricing looks to be extremely expensive, with initial plans offering 1GB for a whopping $109.95/month.

But there was no mention of ADSL2+ or Fibre to the Node, which was the big news at a similar briefing 12 months ago. AFR claimed yesterday that Telstra will not roll out ADSL2+ until it can get a guarantee "that no competitors will be granted wholesale access to the service...except on what it considers to be commercial terms."

LINKS
Telsta Media Release (Telstra, 6 Oct 2006)
Mobile data pricing plans

Vendor Market Share: Sony Ericsson the World's Fastest-Growing Mobile Vendor in Q3 2006

Summary

An all-time record 256 million mobile phones were shipped worldwide in Q3 2006, up 22% from a year earlier. Amid further signs that `Razr mania' has peaked, Motorola lost its crown as the world's fastest-growing top-six vendor for the first time since Q1 2005. High demand for the Walkman and CyberShot ranges helped Sony Ericsson to grow quickest, at 43% annually, compared with a slightly lower 39% from Motorola. Meanwhile, Nokia reached its highest mark for 3 years, registering 89 million units for a 35% share. Samsung gained sequentially one point of market share, due to healthy sales of its new Ultra Edition portfolio of slimphones. In contrast, despite the wildly popular Chocolate family, LG registered just 6% annual growth; its slowest rate since our records began. BenQ-Siemens continues its seemingly unstoppable slide toward market exit. Following 716 million units shipped in total globally during the first 9 months, Strategy Analytics maintains its forecast of 1.00 billion units / +22% YoY for the full-year 2006.

Analysis

Nokia surged to 35% global market share, its highest level since Q4 2003. Sales have been driven by soaring demand for entry-tier devices in emerging markets such as Africa. Nokia has, for yet another quarter, impressively continued to hold off ambitious competitors such as Motorola and Sony Ericsson. Following 242M shipments in the first 3 quarters of 2006, Nokia is well on its way to surpassing a record 340M units for the full-year.

Motorola grew shipments at a healthy 39% annual rate during Q3 2006, due in part to stronger sales across major developing markets such as India and China. However, there are emerging signs that `Razr mania' has peaked.
First, Motorola's total shipments were growing at a peak 2.6 times the worldwide industry average in Q3 2005 -- this ratio had slipped to just 1.0 times by Q3 2006. Second, Motorola (39%) has lost its crown to Sony Ericsson (43%) as the world's fastest-growing top-six vendor for the first time since Q1 2005 -- this is illustrated in Exhibit 3. Third, the competition is offering up many alternative choices for mid-range or high-end GSM consumers -- Samsung has an improved slimphone portfolio (e.g. Ultra Edition), while LG has the Chocolate family and Sony Ericsson offers the popular Walkman range. Finally, a recent survey by Strategy Analytics' Advanced Wireless Laboratory (AWL) service in Western Europe and North America found that some end-user segments may be tiring of ultra-slim designs and `just being thin' is no longer a strong selling point. Clearly, the ball is back in Motorola's court and the pressure is growing for it to replace the unique, blockbuster Razr model which has driven its stellar performance over the last 2 years.

Samsung registered a below-average 15% annual growth rate in Q3 2006. However, this was up markedly on the weak 8% rate of Q2 2006, due to surging demand for its range of Ultra Edition slimphones. Samsung sold globally 3 million handsets under the Ultra Edition sub-brand, representing almost 10% of total volumes during the quarter. The 12.9mm D600 slider proved by far the most popular model, accounting for roughly half of all Ultra Edition sales.
Sony Ericsson overtook Motorola as the world's fastest-growing (and most profitable) top-tier brand in Q3 2006.

High demand for the Walkman (5M units sold) and CyberShot (2M units sold) ranges helped Sony Ericsson to grow at 43% annually, compared with a slightly lower 39% from Motorola. Interestingly, Sony Ericsson is also the world's most profitable top-tier vendor -- at 15% operating margin, it now outstrips even Nokia (13%), Motorola (12%), Samsung (11%) and LG (4%). An increasingly confident Sony Ericsson is talking openly about moving eventually into the number three position currently held by Samsung. However, we think this goal is a bit of a stretch in the near-term, given the 55% gap in present volumes (20M vs. 31M).
LG increased volume by a below-average 6% rate year-over-year during Q3 2006. This was its slowest growth rate since our records began. Nonetheless, healthy global demand for its high-end Chocolate range helped operating margins return to a more respectable 4%, from a weak 0% during Q2 2006.

BenQ-Siemens shipped an estimated 6 million units globally during Q3 2006. Testing delays of new products in part held back total volumes. Despite an encouraging pipeline of improved models, such as the EF91, BenQ has opted to withdraw financial support and the outlook for the loss-making Siemens division appears bleak, although its recent major staff cutbacks should help to better balance the firm's supply with its potential demand.

Following 716 million units / +25% YoY in the first 9 months, Strategy Analytics maintains its forecast for 1.00 billion units / +22% YoY over the full-year 2006. None of the top OEMs reported noticeable inventory-build across key markets during the quarter.

Exhibit 1: 2006 Global Sell-In and Market Share Estimates - Top 6 Vendors 1
Exhibit 2: Annual Global Handset Sell-In Growth 2003 - 2006
Exhibit 3: Annual Global Handset Shipment Growth by Vendor in 2005 - 2006
Exhibit 3 illustrates how Sony Ericsson has expanded steadily during the last 2 years, eventually becoming the world's fastest-growing top-tier brand in Q3 2006.
Exhibit 4: Top 3 Megavendors Dominate Global Market 2
Exhibit 5: Motorola Slowing Down... Nokia Speeding Up in Q3 2006