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Telstra ready to hold the line on mobile market

Canberra Times logo Canberra Times 25/05/2014 David Ramli
Ready to respond: Telstra's Gordon Ballantyne. © Tomasz Machnik Ready to respond: Telstra's Gordon Ballantyne.

Telstra retail group executive Gordon Ballantyne says the company ''is not concerned in the slightest'' by rival SingTel-Optus' move to ramp up network investments to $1.2 billion over the next 12 months.

Mr Ballantyne said Telstra would step up its own spending of $1.2 billion on the mobile network alone if any of its rivals seriously threatened its dominance of the mobile market.

''We're not concerned in the slightest,'' he said. ''I don't see any indications of that size and scale of ambition from other providers in the market place, and when we do see it we'll respond accordingly.''

SingTel-Optus recently said it was raising its fixed-line and mobile network investments to $1.2 billion over the next 12 months to expand its 4G network.

This was in preparation for it getting $649 million of the 700- megahertz spectrum, which is the valuable electronic airspace needed by broadcast technologies.

But Mr Ballantyne said Telstra was getting spectrum of its own and was not concerned by Optus' growing network investments.

''We're always very respectful of the competition and pay attention to that,'' he said. ''But 5 million mobile customers wouldn't have come back to Telstra over the last four years if we hadn't been really clear about the unique differentiator we have in our network superiority.''

Telstra last week unveiled a $100 million plan to roll out more than 2 million Wi-Fi hotspots throughout the country in what it claimed would become one of the world's biggest Wi-Fi networks.

Telstra chief executive David Thodey also said that acquiring an Asian mobile telecommunications provider was still an option despite its recent sale of Hong Kong provider CSL.

The company is aiming to make a third of its revenues from the region from 2020 and beyond - a goal many analysts have expressed doubts over unless Telstra makes a major acquisition in Asia.

''I don't think that just because SingTel is [in Asia] that it excludes us from doing stuff,'' Mr Thodey said. ''It'd have to be the right deal and it's got to be able to show good returns. But it's a very big market with Indonesia's 250 million people, Vietnam's 90 million and the Philippines' 90 million - just the scale provides enormous opportunity.''

He said CSL's sale was due to the projected rise in competition among mobile players in the Hong Kong market rather than a strategy of leaving mobile players alone.

''It is preferable but not mandatory [for Telstra to have control of any mobile telco it buys].''

Arnhem Investment Management partner Theo Maas warned that Asia's mobile telco players were hot property, with buyers coming from around the region and the world.

''Any mobile operator in Asia … has some of the most competitive bidding tension you'll ever see,'' he said. ''There are a handful of players that will be involved in bidding for any deal with SingTel as the obvious one and some of the Middle Eastern telcos as well as Telenor with an emerging markets portfolio.

''Every deal we've seen there … has had three, four or five very big bidders in there, so it's not an easy or obvious area for Telstra to get into.''

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