Aborted mobile rollout leaves A$237m dent in TPG financials

TPG Telecom’s (ASX:TPM) aborted mobile network rollout plans have hit the telecommunications provider’s finances for the year to the tune of A$236.8 million.

The publicly-listed telco halted its mobile network rollout in January after the Australian Government banned the use of equipment made by Chinese telecommunications manufacturer Huawei – slated to be a key equipment supplier for the network – in Australian 5G networks.

In its preliminary financial report for the year ending July 2019, published on 5 September, TPG told shareholders that its decision to halt the rollout of its mobile network result in an impairment expense of $A236.8 million.

The scrapped rollout also led to an increase in amortisaton and interest expense related to mobile spectrum licences it bought to enable its mobile play, the company said.

The company’s results were also impacted by A$9 million in one-off transaction costs associated with its planned merger with Vodafone Hutchison Australia, which has been put on ice by the Australian competition watchdog.

On 30 August last year, TPG and Vodafone Hutchison Australia entered into an agreement to merge their two businesses and establish a combined entity that would boast both TPG’s fixed line infrastructure and Vodafone Australia’s mobile network.

However, the move was opposed by the Australian Competition and Consumer Commission (ACCC). TPG and Vodafone Australia subsequently launched legal proceedings in the Federal Court in a bid to have the decision reversed.

The case is set to be heard in the Federal Court from 10 September and wrap up within three weeks of that date. If the Court sides with TPG and Vodafone Australia, and the merger does eventually go ahead, the merged group will be listed on the Australian Securities Exchange (ASX) and renamed TPG Telecom Limited.

These factors, among others, contributed to a 56 percent tumble in TPG’s profit for the year, to A$175 million. The company’s preliminary reported earnings before interest, tax, depreciation and amortisation (EBITDA), meanwhile, came to $572.6 million, well short of the $A826.7 million it notched up the prior year.

However, TPG saw only a relatively minor 0.7 percent drop in revenue during the period, to nearly A$2.5 billion, although the company said that EBITDA continued to be adversely impacted by the loss of margin as DSL and home phone customers migrate to low margin National Broadband Network (NBN) services.

The effects of the NBN rollout are set to be felt for at least another year, with TPG telling shareholders that its 2020 financial year is expected to be the year that suffers the greatest impact from customer migration to the NBN. Indeed, the combined impact from residential DSL and home phone customers migrating to the NBN is expected to be around $85 million for the group.

TPG said that the annualisation of the deterioration of profitability of existing NBN customers experienced in the second half of the company’s 2019 financial year as a result of increased NBN wholesale cost per user is forecast to create a further NBN headwind for FY20 of approximately A$25 million.

It is anticipated that, by the end of FY20, TPG will have less than 15 percent of its residential broadband customer base remaining on ADSL, as more customers migrate to the NBN.

“Operating cost efficiency programs across the Group are expected to continue to deliver savings and another of growth is forecast for the Group’s Corporate Division but, in this peak year of NBN headwinds, organic growth for FY20 is not expected to be sufficient to offset the headwinds,” the company told shareholders.

Telstra to build ‘one of the world’s largest LTE underground networks’

Telstra’s Mining Services has flagged the development of an underground private 4G LTE network for South32’s Cannington mine in North West Queensland.

According to Telstra, the network, still in the pre-deployment stage, will initially be 6.5kms in length with the potential to expand further with subsequent stages. At full installation, it would be one of the largest underground mining LTE networks in the world using leaky feeder – a comms system used in underground mining and other tunnel environments – it added.

vSouth32’s Cannington mine is an underground silver, lead and zinc operation located 87 km south of McKinlay in North West Queensland. It is one of the world’s largest and lowest-cost single-mine producers of silver and lead.

“The push towards increasing mechanisation and automation of mining operations in Australia has driven greater demand for improved connectivity through all areas of mines and their processing facilities,” said Telstra Enterprise Group Executive Michael Ebeid. “These technologies – whether connecting staff, vehicles or sensors – require connections that are high throughput and low latency, and can ensure that critical control and monitoring systems can operate without interruption.”

“The network will deliver real-time operational data for operating transparency, condition monitoring and production improvements, ‘ he said.

A comprehensive evaluation and integration program has been developed as part of the deployment. This program accounts for the unique geology and composition of the South32 Cannington mine using LTE technology in a production-scale setting.

“Telstra will deploy the underground network using a private, virtualised core and LTE radio technologies distributed over leaky feeder cable using LTE-capable bi-directional amplifiers. Our analysis indicates this to be the most effective solution for underground miners, and is upgradeable to5G,” said Jeannette McGill, Head of Telstra Mining Services.

“Being private means that it will be a completely standalone mobile network,  independent from others such as Telstra’s public network. South32 Cannington will have its own equipment, SIM cards and unique network codes,” McGill added.

“Our goal is to establish an effective network that will assist South32 Cannington in driving safety, productivity and efficiency initiatives.”

Telstra said the combination of Ericsson mobile network equipment, its own radio spectrum, and leaky feeder solutions from specialist manufacturer METStech delivered a
key capability that has made extending LTE underground a more commercially realistic and safer prospect.

ACMA takes aim at 5G innovation with class licensing updates

The Australian Communications and Media Authority (ACMA) hopes to support new innovative technologies and wireless data communications systems, including those underpinning 5G, with a range of fresh updates to the country’s class licensing arrangements.

The ACMA’s proposed variation to Australia’s Radiocommunications (Low Interference Potential Devices) Class Licence came into effect on 19 August, with the new licensing arrangements expected to support new technology applications and “bring Australia into line with international arrangements”.

Among the changes, which are contained in the Radiocommunications (Low Interference Potential Devices) Class Licence Variation 2019 (No. 1), are new arrangements for ‘all transmitters’ in the 57–64 GHz band aimed at supporting new interactive motion sensing technology that operates in this particular frequency range and can be used to enable touchless control of device functions or features.

Other changes include an expansion of frequency range for 60 GHz (57–66 GHz) data communication systems to now cover 57–71 GHz, for both indoor and outdoor usage, which the ACMA suggests will support wireless gigabit systems with applications such as backhaul for 5G and Wi-Fi.

The updates also saw the revision of arrangements for underground transmitters in certain bands, a move designed to support fixed and mobile services from 70–520 MHz to provide improved support for underground activities, such as mining.

Additionally, the new class licensing variation includes a revision of arrangements for radars in the 76–77 GHz frequency band in order to provide support for radar use in rail crossing and road safety applications.

There are also new arrangements for ground and wall penetration radar (30–12,400 MHz) to facilitate the usage of applications across a variety of industry sectors, such as agriculture, railways and underground pipe detection in the telecommunication industry.

Some of the new changes also work to align existing arrangements for ultra-wideband devices with United States and European arrangements for generic, indoor and outdoor devices operating in 3,100–3,400 MHz and 8,500–9,000 MHz ranges, along with aircraft applications (6,000–8,500 MHz), aimed at further supporting the use of such devices in Australia.

The ACMA first put the call out to industry for comment and feedback on its proposed updates to class licensing arrangements in December 2018. The updates were to be implemented by varying the Radiocommunications (Low Interference Potential Devices) Class Licence 2015 (LIPD Class Licence).

Now that the updates are in effect, the ACMA invites further suggestions from industry and individuals on devices and technologies for “possible future updates” to class licensing arrangements of the Low Interference Potential Devices Class Licence. 

Telstra flicks on PNG’s first private 4G LTE net at Newcrest goldmine

Telstra Mining Services and Mebourne-based mining corporation Newcrest have rolled out what is billed as Papua New Guinea’s first private 4G LTE (Long-Term Evolution) mobile network at Newcrest’s Lihir goldmine.

According to Telstra – which collaborated on the design, staging, site deployment and testing of the network – the wireless communications platform will allow for greater levels of safety, remote operation and automation.

Dr Jeannette McGill, Head of Telstra Mining Services, said Newcrest’s decision to invest in private LTE tech further validates it as a reliable, scalable networking platform for the mining industry.

“We’ve provided Newcrest with a tailored platform that will underpin its safety and digital mining ambitions and will help improve productivity and deliver new value and efficiencies to the business. They’ll be using it to further modernise the mine site to enable the use of current and future mining applications, including tele-remote and autonomous systems, more extensively,” she said.

ACCC fixes software glitch behind early TPG-VHA merger rejection announcement

Australia’s competition watchdog has patched its website content management system (CMS) and apologised, after publishing its decision on TPG’s proposed merger with Vodafone Hutchison Australia (VHA) before it was meant to be made public.

In a somewhat unprecedented move, the Australian Competition and Consumer Commission (ACCC) released a statement on 16 May explaining how it accidentally published its rejection of the proposed TPG-VHA Australia merger a day before it was expected to reveal its decision.

“We apologise unreservedly for this unfortunate and serious incident,” ACCC chief operating officer Rayne de Gruchy said.

“We have thoroughly reviewed all of the processes and information technology systems that led to this error, and we want to assure our stakeholders this incident will not be repeated,” she said.

The publication of the decision to reject the merger sent the share price of both TPG and VHA’s 50 percent stakeholder Hutchison Telecommunications tumbling.

The ACCC said it had conducted a full investigation into the incident and claims that a fault in its website CMS, which has now been rectified thanks to a software patch, was to blame.

According to the regulator, when the information relating to the merger was being put into the back end of the mergers register, a third-party user was trying to access the existing webpage at the same moment as it was being updated.

“Instead of the new information being treated as draft content requiring internal approval, the flaw meant the content was live for eight minutes,” the ACCC said in its statement.

The information went live just before 3PM, giving the ACCC the opportunity to quickly issue a statement confirming the merger decision to both the Australian Securities Exchange (ASX) before the end of the trading day.

The ACCC’s rejection of the merger, which could effectively put an end to TPG’s ongoing efforts to become a major player in the country’s mobile telco market, saw VHA and TPG move to launch legal action against the regulator over the decision.

VHA CEO Iñaki Berroeta said on 9 May that the company remains firmly committed to the merger.

“VHA respects the ACCC process, but we believe the merger with TPG will bring very real benefits to consumers.  We have therefore decided that VHA should, together with TPG, pursue approval of the merger through the Federal Court,” said Berroeta.

The merger agreement between VHA and TPG has been extended to 31 August 2020 to allow the legal proceedings to run their course before the proposed deal lapses.

Which major Aussie city suffers from the slowest mobile download speeds?

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Of Australia’s five largest cities, Sydney experienced the slowest average mobile download speeds across the country’s three big wireless network providers, Telstra, Optus and Vodafone, during the three months ending 31 March, new research shows.

In Sydney, the average mobile download speed experience across all three of the major mobile operators during the three-month period was 40.3 megabits per second (Mbps), based on figures in new analysis by mobile analytics firm Opensignal.

The 40.3 Mbps download scorecard for Sydney was drawn from an average mobile download rate of 48.6 Mbps for Telstra, 39.1 Mbps for Optus and 33.3 Mbps from Vodafone, as outlined in Opensignal’s latest Australia Mobile Network Experience Report, which took in over 489 million measurements from some 110,000 devices during the period.

For Melbourne, the average download speed across the three mobile network providers came to 41.2 Mbps, with Telstra in the lead at an average of 48.8 Mbps during the period, followed by Vodafone with 38.5 Mbps and Optus, which claimed an average of 36.3 Mbps.

Meanwhile, Perth saw an average download speed experience of 50.6 Mbps from Telstra, 38.6 Mbps from Optus and 35.8 Mbps from Vodafone, equating to an average download speed of 41.7 Mbps across all providers during the period.

According to the research, Telstra scored an average download speed experience of 55.7 Mbps in Brisbane, with Optus and Vodafone trailing with 38.9 Mbps and 34.9 Mbps, respectively — equating to an average of 43.2 Mbps across all three providers.

Adelaide enjoyed the fastest speed overall, compared to the other major cities, seeing an average download speed during the period of 47.6 Mbps across all three providers, with Telstra, Optus and Vodafone claiming 63.2 Mbps, 43 Mbps and 36.7 Mbps, respectively.

Opensignal’s research also revealed that, across the country, Telstra claimed an average download speed experience of 41.1 Mbps, putting it in top place in terms of download speed, followed by Optus and Vodafone, both of which claimed average download speeds of over 30 Mbps — 36.4 Mbps and 32.8 Mbps, respectively.

Additionally, the report revealed that, on a national scale, Optus claims the highest 4G availability rating, with an availability score of 91.9 percent, followed by Vodafone with a score of 90.3 percent and Telstra with a score of 89.4 percent.

Meanwhile, Optus and Vodafone drew in terms of latency, with Optus claiming an average latency experience of 34.6 milliseconds (ms), compared to Vodafone’s 34.4 ms. For its part, Telstra’s average latency experience over the period was 41.8 ms, according to the report.

Telstra scores big on 4G upload speeds: OpenSignal

Telstra is leading the pack for 4G upload speeds in Australia, according to OpenSignal’s latest data – averaging 10.6 Mbps, followed by Vodafone with 7.8 Mbps and Optus on 6.8 Mbps.

“Telstra’s victory is impressive since Vodafone dominated our download speed awards in our latest Australia report,” an OpenSignal spokesperson told Telecom Times.

The London-based mobile coverage mapping specialist explained that LTE upload and download are typically linked to total network capacity, “meaning we would expect operators with faster download speeds to have faster upload speed.”

The firm also noted that upload speeds are becoming an increasingly important metric as mobile internet trends move away from downloading and consuming to uploading and creating content.

“While operator upload and download speeds aren’t dependent on each other, they’re both linked to a network’s total capacity, so we would generally expect to see a correlation,” OpenSignal added.

Opensignal said upload speeds were typically slower than download speeds, as current mobile broadband technologies tend to be focused on providing the best possible download speed for users consuming content.

Its latest Mobile Networks Update report on  Australia found that all three national operators averaged more than 33 Mbps on 4G download speeds.

“Australia’s national average 4G download speed of 36.1 Mbps is among the top 10 of the countries we analysed, and over double the global average in our measurements,” the spokesperson said.

“Telstra was only a couple of megabits behind Vodafone’s average 4G download speed in our last report, and has significantly beat its rival in 4G upload,” she said.