Australian "3 CDMA" customers have 90 days to move to 3G

May 9, 2006

Hutchison, the company which operates the "3" mobile network in Australia has announced that it's 2G CDMA customers will have 90 days to migrate to their UMTS based 3G mobile telephone network or be without service. Hutchison said that customers who were under contract and wished to leave would be able to do so without penalty.

In February, Hutchison rebranded their CDMA service from Orange to 3 CDMA to coincide with its 3G network's company name. Hutchison has been offering their CDMA customers special deals to tempt them into moving to their 3G network and has so far migrated around 200,000 users voluntarily.

It is believed that the migration will cost AU$145 million but will save the company around AU$70 million per year by not having to operate two separate networks.

Kevin Russell, CEO of Hutchison said that customers are looking to get more from their mobile telephone and that customer demand for 3G services is strong. "Customer demand to move to 3G has been very strong," he said.

"It is clear that customers want more from their mobile service,"

"With a critical mass of our 2G customers now using our 3G service, the time is right to commence plans to close our 2G network" said Mr Russell.

Paul Budde, an independent telecommunications analyst said that some customers might not wish to migrate because of the inferiority of 3G handsets to those used on the CDMA network.

Another hurdle may be that UMTS 3G networks have similar coverage to GSM network cells (base stations), which have around 35 km range of coverage. CDMA by comparison has a 90 km range.

Hutchison was the first telecommunications company to launch a 3G network in Australia, however it only operates in Sydney, Melbourne, Brisbane, The Gold Coast, Adelaide, Perth and Canberra. If users go outside these areas they roam onto Telstra's 2G GSM network.

Telstra has announced plans to build a AU$1 billion 3G network nationwide and will decommission its CDMA service around 2008. At present Telstra has entered into a sharing deal with Hutchison to use the "3" network while its network is rolled out.

Optus and Vodafone have also announced plans to build a 3G network in co-operation with each other nationwide.