CDMA Network Closure Set To Be Approved
0Overall Score

Communications and IT Minister Helen Coonan appears to have backed away from a warning to Telstra that it would breach its operating licence if it shuts down its CDMA digital mobile phone network early.

Earlier this month Coonan told a Senate committee that Telstra would breach its operating licence conditions if it dumped its CDMA network to introduce a high-tech 3G mobile service

She said Telstra was obliged under its licence to supply a digital mobile network and have digital mobile coverage equivalent to the old analogue service.

But yesterday, after Telstra CEO Sol Trujillo outlined plans to do just what she had warned against – phase out CDMA, and replace it with a national 3G GSM HDSA network – Coonan had changed her tune.

In a media release, she “welcomed Telstra’s announcement that it will invest in a new nationwide 3G wireless network and that it will upgrade its core network to support delivery of high speed integrated services to all customers.”

“The Government welcomes new investment in telecommunications infrastructure in Australia, particularly investment that will see people living in rural and regional Australia get access to next-generation telecommunications services,” the Minister said.

She added that Telstra had promised to continue to operate the existing CDMA network until this new network provides equivalent or better coverage. Licensing conditions did not get a mention in the Minister’s press release.

Not everyone was so sanguine yesterday. Former Deputy PM Tim Fisher, now an adviser to the CDMA Development Group, told Sol Trujillo – via ABC-TV News – “Not so fast, Sol!”

He said there was $400 million of public money invested in the CDMA network – introduced to offer better mobile coverage to rural areas after Telstra’s analogue mobile network was dropped – and urged it to keep the network.

 Sell it to us: CCC

In an article posted on The Australian IT Web site last week, Fisher wrote: “Those in the know rightly point out that a CDMA shutdown would be a breach of Telstra’s licence conditions. As nearly half of this network was built with public funds, a safeguard _ requires Telstra to operate the network for 10 years.”

Meanwhile, the Competitive Carriers’ Coalition – which represents rival telcos including Primus, Macquarie and Hutchison – has suggested Telstra should sell the CDMA network to one of their number.

“Telstra shareholders must be wondering why the company is trashing equipment so recently bought, rather than trying to recover some sort of return on it by selling what appears to be a perfectly acceptable network,” CCC executive director David Forman said.

“And taxpayers should be asking why Telstra has been using their money to subsidise rolling out a network that is now being junked.”