4G LTE to help Telstra cut network costs

4G LTE to help Telstra cut network costs

LTE to provide better download speeds to mobile broadband customers and bring down network operational costs.

Telstra's 4G LTE network will not only improve mobile data download speeds but bring down operational costs as well, according to the telco.

The company revealed it was to introduce a 4G LTE network back in February which would bring significantly faster download speeds to customers compared to 3G networks. Telstra will use existing 1800MHz spectrum for LTE which will be integrated with its 850MHz HSPA+ service.

At the time, the telco claimed rapid growth in mobile data consumption as the impetus for the network upgrade.

LTE would bring obvious market differentiation in 3G dominated mobile market, but at the Telstra full year results meeting in Melbourne today, the company cited reduced operational cost as another benefit of the new network.

“On LTE, cost per bit is significantly lower than HSPA+ networks so its all about structural efficiency of carrying data on the network,” Telstra CEO, David Thodey, said. “LTE is just a far more efficient technology in terms of your cost base.”

Lowering costs within the company is now vital since it decided to become more competitive in the market. While Telstra has successfully gained market share by bring out better value mobile and broadband plans, this has pushed down its net profit as well as its average revenue per user.

LTE is part of the solution.

“For us to be able to maintain margins in the market, we need to be driving cost down on our network,” Thodey said. He also saw LTE as a great proposition for more customers to join the Telstra network.

“It does take a long time for people to catch up when you [make an] enormous capital investment in a very large network,” Thodey said.

Having already counted LTE upgrade cost into its financial year 2011 capital expenditure budget, the lot of money Telstra would have to spend on the network involves securing more spectrum for 4G. That will occur during the telco’s 2013 financial year.

Telstra is running an LTE pilot on business customers from August 29 with commercial availability of the network slated for later this year.

For Telstra’s full year financial results, click here.

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