Voodoo Goes It Alone

Vodafone Australia's efforts to team up with rival carriers to roll out a 3G network have ended in failure, with the operator pointing the finger at the inability of other carriers "to keep up with the speed of the company’s proposed rollout."

In August the Australian subsidiary of wireless behemoth Vodafone Group plc (NYSE: VOD) admitted it was in advanced partnership talks with all the major telcos in Australia (see Vodafone Cozies Up Down Under).

Managing director Grahame Maher commented at the time that a partnership would be the most effective way for the carrier to deliver W-CDMA services, due to "the sheer scale, geography, and nature of the Australian market."

The W-CDMA air interface is part of the Universal Mobile Telecommunications Standard (UMTS), which has already been adopted as the European 3G standard. Used with existing Global System for Mobile Communications (GSM) core networks, the theory goes that W-CDMA-compliant handsets and basestations can increase wireless data transfer rates to a maximum of 2 Mbit/s.

The carrier today abandoned early thoughts of network sharing, announcing that it will commence planning for the initial deployment of a 3G network in Australia as "a Vodafone-only initiative," with a vague launch date of 2005.

"Despite our will to enter into a network partnering agreement, at this stage we are not satisfied that this approach would meet the collective needs of our customers, our shareholders, the broader community, or our business," says Maher in an email statement to Unstrung.

According to Dow Jones Newswires, the carrier has held discussions with both Telstra Corp. and Singapore Telecommunications Ltd. (SingTel). "Those are the two we were talking to," says Maher. "We have been unable to get a partnership structure, mainly because of time."

Vodafone trails both players in terms of market share. Telstra and SingTel together control more than 80 percent of the Australian market for mobile services, while Vodafone has a market share of about 18 percent.

Maher is refusing to rule out a possible future tie-up, though. "The door will be kept open for other operators to join us in the future, although no firm commitment has been made at this point. 3G is the future for Vodafone, and quite simply we need to get going."

The carrier was unable to specify exactly how much cash had been earmarked for the 3G rollout, putting the figure at "hundreds of millions of dollars."

Vodafone's failure to find a suitable partner contrasts with European approval earlier this year for 3G network sharing, a move expected to save mmO2 plc and T-Mobile International AG billions of dollars in infrastructure costs (see Vodafone Cozies Up Down Under).

— Justin Springham, Senior Editor, Europe, Unstrung

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