update Optus chief executive Paul O’Sullivan this afternoon said his company wasn’t yet seeing consumer demand for the next ‘fourth generation’ (4G) of mobile networks and devices, adding that plans to deploy the standard by rivals like Telstra were little more than “bragging rights”.

All three of Australia’s major mobile telcos — Telstra, Optus and Vodafone — have over the past year announced plans to trial the incoming generation of 4G services using the Long-Term Evolution or LTE standard. The standard offers dramatically faster mobile broadband services to consumers, as well as allowing telcos the chance to use capacity more efficiently on their networks.

4G services are increasingly being launched internationally — especially in the US, where a number of major telcos are pushing the new standard heavily at the moment.

Only Telstra, however, has confirmed plans to actually launch a 4G/LTE service in the market — revealing in February that by the end of the year, it would upgrade its flagship Next G mobile network in central business districts around the nation to use the LTE standard by the end of 2011, with the 1800MHz frequency also being used by the Optus and Vodafone LTE trials.

However, in a teleconference associated with Optus’ financial results today, O’Sullivan didn’t appear wholly positive about the potential for the technology in Australia, noting the telco didn’t currently see the “consumer demand” for 4G services.

O’Sullivan said that the current 1800Mhz deployments allowed telcos to have “bragging rights” — “people want to be able to say they have it, and that they can provide it to a small number of customers”.

However, he said, major 4G rollouts in Australia would have to await access to the 700Mhz wireless spectrum, which will be released as part of the ‘digital dividend’ when the nation finally switches as a whole to digital television and stops broadcasting analogue signals. “That’s the stage at which you are going to see major widespread consumer demand and acceptance,” O’Sullivan said.

The key driver for Optus deploying 4G, the executive said, was in fact the availability of end user devices (such as mobile broadband dongles and smartphones supporting the standard), which are not yet widely available.

Despite the comments, O’Sullivan noted he did see 4G/LTE as being “very important”, adding that Optus’ parent Singtel was trialling the upcoming standard across its wider operations. “We will launch 4G soon, and we’ll do it when the market is ready,” he said.

In addition, Optus was also constantly investing in its existing 3G network, the chief executive said — it had invested half a billion dollars in that network every year for the past five years, and was on track to do the same this year, with fibre backbone connections now having been laid to some 80 percent of metropolitan base stations, new spectrum holdings being purchased and an “aggressive” metropolitan buildout adding base stations and capacity.

Telstra happy with Optus’ approach

A spokesperson for Telstra said in a statement responding to O’Sullivan’s comments this afternoon (Vodafone has also been asked to respond) that its own recent figures around mobile broadband subscriber growth indicated interest in mobility remained “strong” and that customers were “more and more interested in reliable and consistently fast mobile connectivity”.

“From Telstra’s perspective, we see strong interest from our customers in reliable, fast mobile connectivity, and the integration of LTE technology into the Next G network is a way to continue to deliver high quality services and meet growing customer demand,” the spokesperson said. “LTE will enable Telstra to continue to deliver a superior end-user experience — high speed, high quality, reliable connections — for existing and future Next G customers.”

Regarding spectrum, the Telstra spokesperson said it would be “some years” before the 2.5GHz and 700MHz bands became available for use by mobile operators. “In the meantime, we’re making use of the allocations we have today,” they added, “so that we can start providing these services to our customers earlier than waiting for the other spectrum bands to become available.”

“Very happy to see Optus sitting on their hands though, while we work on delivering a better mobile experience to our customers.”

Vodafone’s reaction

A spokesperson for Vodafone highlighted the company’s “successful” LTE trials in the 1800MHz band with Huawei, noting that results had shown download speeds of up to 73Mbps, “paving the way for the evolution to even higher data speeds” for the company’s customers.

“In February, we announced plans to replace around 5,800 existing 2G and 3G base station sites with Huawei’s SingleRAN solution, which is capable of delivering 2G, 3G and, later, 4G or Long Term Evolution (LTE) from a single base station site,” the company added. “We’ll also install the new Huawei network equipment at more than 2,200 new base station sites that it will be added to our network over the next 18 months.”

“When this radio equipment project is complete, we will have a very straightforward and flexible upgrade path to LTE, once the right devices are there to support the right customer experience.”

Image credit: Delimiter