Back to the future indeed

I was expecting a Top
Gun “the need for speed” or “take my breath away” marketing campaign but
Vodafone surprised me by going with Back
to the Future and the De Lorean instead. Either way, the announcement that
it was turning on a 4G LTE network wasn’t too much of a surprise seeing how
many people had spotted it being tested in the wild.

For a $10 premium over your existing plan (unless you’re
corporate in which case it’s already priced in), on account customers can
upgrade their software and connect to the LTE network.

Vodafone is deploying an 1800MHz network with plans to use
700MHz should it win a chunk in the spectrum auction at the end of the year.

For now that means the footprint is central Auckland (around
30% of the population is covered today) with plans for expansions within the
city, but also extending it to include Christchurch (in May), Wellington (July
or August) and then on to cover 40% of the population by the end of the year.

Currently there are six devices that can access Vodafone’s
LTE network – the latest iPhone, iPad and iPad mini, some of the Samsung Galaxy
SIII devices that have LTE written on the box, one of the Samsung tablets and
an HTC Windows phone. More are coming down the pipe and by Christmas there will
be around a dozen.

Also launched later this year will be category four devices.
The current crop of phones and tablets are only category three – the next ones
will be even faster.

So how fast is it? At the launch with a dozen users all on
the one cellsite we regularly saw speed tests of 50Mbit/s down, 25Mbit/s up.
Latency of around 25ms is to be expected at Vodafone’s head office, but the
speeds are astonishing. The Speed Test app graphical display only goes up to
20Mbit/s so you get to watch the needle swing round to flat line, then do it
again for upload and the report is complete in the time it takes my HSPA+ phone
to get a connection to run the app.

Today Vodafone says it has 65,000 handsets in use that are
able to make the jump to warp speed and they’ll be proactively calling every
one of them to tell them. By the year’s end they expect to see more than
100,000 users on the network.

This move raises two very interesting issues. From a user
perspective it’s great. Not only do we have access to a network that is very
fast, with devices already able to be used on it but we have a technology foot
race in play that should see the other two network operators look closely at
their rollout plans. Telecom had said it was trialling 4G but wasn’t going to
deploy a commercial launch this year. I imagine that will change quite quickly,
and NBR is reporting that Telecom is already talking about a commercial launch
this year. At the latest financial announcement there was no sign of the capex
needed to deploy 4G in Telecom’s network but given Simon Moutter’s view that
mobile is a core proposition for Telecom, I’m sure that will be forthcoming.

Which leaves 2Degrees in an interesting position as well. It
has the ability to upgrade to 4G quite quickly – it has the spectrum and the
network is new enough that I’m told it’s a software/card swap scenario rather
than redeploying kit to every celltower. Could 2Degrees beat Telecom to a
launch? Anything’s possible which is great news for us users. In the meantime
both Telecom and 2Degrees will have to do something to  keep customers happy and that’s likely to
involve pulling the price-point lever. I wouldn’t sign any long-term contracts
just at the moment – it’s all going to get rather interesting.

The other issue this raises is what will the government’s
response be? Given the government’s apparent view that copper is a competitor
to its fibre deployment, what will it make of LTE? If copper, offering speeds
of 15Mbit/s down and 1Mbit/s up is a danger that must be dealt with, what will
the response be to a technology that can do 100Mbit/s and 50Mbit/s up?

Today, with the right iPad, I could be getting speeds at least
on par with the speeds I’ll get from fibre when that finally becomes available
in my area in five years’ time. If copper must be regulated to keep the price
high in order to drive customers to fibre, surely products and services like
Vodafone’s new network will also throw a spanner in the works and if the
government doesn’t see fit to get involved, what does that say about its real
motivation for keeping Chorus’s copper price artificially high?

The government has chosen to keep prices for consumers high while supporting one telco over and above all others. If that’s not back to the future, I don’t know what is.