Vividwireless: a big boost for Optus mobile

The move by Optus to acquire vividwireless from the Seven Group (operating the Seven TV network) is certainly a most interesting development.

It is a very strategic move by Optus and will enable it to begin to recapture market momentum in what is for it the critical mobile broadband market. Over the last few years Telstra had taken the lead from Optus in this market and obviously Optus couldn’t let that go unchallenged.

Spectrum access is a key issue in the mobile broadband market and Optus was prepared to pay a premium ($230 million) to vividwireless to acquire this valuable asset. However, viewed in the context of the $5 billion that the mobile operators will invest in spectrum over the next few years, this is a relatively small sum.

This acquisition will allow the company to spearhead its 4G/LTE activities in the market. Vividwireless had previously also incorporated the Unwired assets and further spectrum was bought in 2008 – altogether that covered 98MHz of spectrum in the 2.3GHz band.

Over the years Unwired/vividwireless had either commenced or planned operations inAdelaide,Brisbane,Canberra,Melbourne,SydneyandPerth. The vividwireless network used a different (4G) technology from Unwired, but the spectrum available in all these cities will now allow Optus to build a new 4G network using LTE-TDD technology.

This new network will deliver wireless broadband to households and businesses in metropolitanAustralia, with typical download speeds ranging from 25Mb/s to 87Mb/s. It will be integrated with Optus’s 1800MHz 4G network, which will be launched inNewcastleand the Hunter region ofNew South Walesin April 2012.

This is also good financial news for the Seven Group. BuddeComm has always argued that vividwireless would not be able to succeed on its own in competition with the other mobile operators, and that it would be yet another of the telecoms failures the company has experienced. This time they did receive a premium price for the asset, but if one looks at all the Unwired/vividwireless investment made by the Seven Group it is questionable whether it has broken even on this.

Paul Budde

For more on vividwireless see also: Australia – Mobile Broadband – Major Operators

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