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SingTel Tests Fixed-Wireless Networks in Australia

Singtel1

Telecommunications operator SingTel’s (SGX: Z74) wholly-owned Australian subsidiary Optus is testing a fixed-wireless service amongst its staff in the country, which, if successful, could set it free of Telstra’s whole sale costs.

Unlike in Singapore, where SingTel reigns supreme over its local competitors Starhub (SGX: CC3) and M1 (SGX: B2F), Optus is number two behind Telstra in Australia.

Telstra, which has control of the infrastructure needed for fixed line services like modems, home phones and internet, charges a wholesale rate to carriers. Over the years, this has provided Australia’s number one telco with lucrative margins and allowed it to dominate the market.

This might change however, as Optus’ new plan will enable it to use its 4G network to provide “comparable” ADSL2+ speeds to users who are unable to receive a fixed broadband connection in Australia, according to The Australian.

This would save Optus millions of dollars in operational costs because it would “bypass” Telstra’s wholesale services. Given the increasing importance of Optus’ results to SingTel, it’s a development that investors in Singapore’s telco giant should take note of.

Australia’s number two telco is giving a number of its workers the device, which connects wirelessly to the internet, in order to test its signal strength and reliability. Although a mobile signal can be patchy, having the device in a fixed location can allow the carrier to provide a better connection.

The National Broadband Network in Australia, which is responsible for providing not only the fixed fibre network to metropolitan and semi-rural cities but also a remote service to households further away, provides a similar service to Optus’ fixed-wireless.

Although this technology may be nothing new to many who use wireless dongles for laptops or portable WiFi hotspots, enabling a more reliable internet connection without the hassles of installation and cables is likely to be well received by customers.

The service will not require an existing phone line, but will need an Optus Home Wireless Broadband device to connect to the internet.

In Australia, a number of analysts have become more concerned about Optus’ ability to maintain its market share since its number of mobile customers has not grown in recent year. It will require innovative products and superior customer service if it is to grow its share of both the fixed broadband and mobile markets.

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The information provided is for general information purposes only and is not intended to be personalised investment or financial advice. This article was written by Owen Raskiewicz and first published on fool.com.au. It has been edited for fool.sg.