Telstra CMDA network

24 Apr, 2002 10:00 PM


A SCHEME to use the CDMA mobile network for home phones will be rolled-out by Telstra Country Wide (TCW) later this year, after trials of the service proved successful in test areas.

The CDMA wireless local loop service allows Telstra to scrap the costly installation of physical phone lines in hard to reach areas when customers request a new or additional service, and will also help prevent line problems in lightning prone areas.

Installation is also much quicker than constructing a new line, as it only requires the installation of a small CDMA receiver box in the home, which enables the customer to use their home phone as normal, despite the absence of a fixed line. Billing is the same as a fixed line rental.

TCW has trialled the service on both King Island and around Toowoomba, Qld, with promising results, prompting it to proceed towards a commercial roll-out.

Depending on an area's topography, the CDMA wireless local loop service can be installed in homes up to 30 kilometres away from a CDMA base station.

The system is currently being modified to increase its data, both fax and internet, capabilities, which would delay its commercialisation until the second half of this year, TCW marketing manager Brett Riley said.

Mr Riley claims the development of this service, and others like it such as Premium

Weather (see accompanying story), vindicates the separation of TCW from the main Telstra business.

As a result of the split, TCW was able to tailor services for its customers in rural and regional areas, he said.

When TCW was launched in June 2000, its new chief executive officer Doug Campbell promised the hived-off company would turn a profit for day one, and would match a top 20 Australian company in size.

Aggressive growth targets were set, and so far Telstra had met those targets, Mr Riley said.

Actual figures are hard to find though, as separate TCW figures aren't available in the Telstra annual report.

However, the rural division has outpaced the parent company in terms of revenue growth, which means revenue growth in excess of 2pc so far this year.

Admittedly, the Telstra parent company's growth of 2pc isn't a huge hurdle to leap.

TCW had achieved its growth targets in its first year of operation, and according to Mr Riley, is exceeding them in the second.

He credits the buoyant rural economy for part of that growth, but also TCW's ability to concentrate on rural areas to grow its business through better services and a better understanding of its customers through its decentralised management structure.

"When we set up we set ourselves some fairly aggressive growth targets because we were convinced if we put people out in regional and rural Australia they would be be closer to our customers and would be able to assess their needs better," Mr Riley said.

The recent growth has come from three main areas.

First is an improvement in customer churn rates, the term used to describe the number of customers switching from one carrier to another.

According to Mr Riley, the greater service provided by the local teams is prompting consumers to remain with, or switch back to Telstra.

Second is strong growth in internet usage and take-up.

Until last year many rural customers snubbed the Telstra Big Pond service, and its STD dial-up rates, in favour local Internet Service Providers (ISPs) who offered internet access for the cost of a local call. As a result TCW lost both the STD revenue and the ISP revenue.

Now TCW can match the local call service, and provide bundled billing, it is winning some of those customers back, Mr Riley said.

Third is growing take-up of the CDMA mobile network, which is now two years old.

Early on the CDMA network attracted much criticism for its inferior coverage to the widely used and mature analogue network it replaced.

But there are now more 520,000 retail CDMA customers on the network - a 32 per cent increase on the previous year.

By comparison, the Telstra GSM network had 230,000 customers in its first two years in 1995

The addition of extra base stations is also giving greater access, and therefore revenue, as well as a greater incentive for customers in rural areas to buy a mobile phone.

TCW recently surveyed 1200 CDMA customers on the network's performance, with 80 rating it as excellent, very good or good.

After spending the first year getting its management structure in place, and the second developing and commercialising targeted rural products, Mr Riley nominated the speed and quality of on-the-ground service as the company's key objective for its third year of operation.

That aim was already in place before a Telstra bungle contributed to the death of a young boy in north-east Victoria, when his mother couldn't ring for an ambulance during an asthma attack, despite reporting the fault to her service and its importance given the health of her son.

Already a new system is being put in place prioritising repairs according to need, Mr Riley said, and TCW also hoped to make its network more reliable, its installation of new lines speedier and fault repairs quicker.

"It won't give us increased revenue...and will take some some capital investment... but it will probably save us a lot of costs," Mr Riley said.

Other product developments which maybe rolled in the next year or two, include an online business analysis and decision support tool with a beef module, and possibly a "never busy" voice network which means callers may never hear the "engaged" tone again.

The "never busy" network, which is currently being trialled, allows a caller to either leave a number or get their phone to ring when the would-be receiver complete his/her initial call.

TCW is also hopeful of commercialising its telemetry services, such as the bore pump switch highlighted in one of its television advertising campaigns.



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