Telstra aces LTE market
Morgan Stanley predicts Big T has 500k 4G customers already
Telstra has nailed first mover advantage in the LTE market, with a new report forecasting that the carrier will reveal it has captured in excess of 500,000 subscribers in its full year results next week.
Analysts at Morgan Stanley claim that Telstra will report annualized growth of 900% on LTE growth despite only having 200,000 LTE customers in May.
The new report from Morgan Stanley claims that Telstra’s aggressive LTE rollout strategy has sealed its spot as the dominant mobile carrier worked and estimates that Telstra has spent AUD $200 million on its LTE rollout since May 2011. The carrier has yet to confirm its capex on the LTE deployment.
The total upgrade of network to 4G is expected to cost of $400-500 million and the network deployment is currently around 40% complete.
The report claims that challengers Optus and Vodafone, have invested around $60 million each, on their respective LTE rollouts and may struggle to match the network gains that Telstra has already made.
The report found that Telstra has also maintained a 15% price advantage compared to an average of Optus and Vodafone over March 2011 to May 2012.
It claims that Telstra’s superior network (particularly in the face of Vodafone's poor network performance) has enabled it to increase its postpaid prices recently, including a 10% increase in call rates, connection/Flag rates up from 35c to 40c, and data allowance falling by 500MB per month.
“We believe TLS has the premium mobile network in Australia and a clear first mover advantage in 4G ... Telstra’s network advantage is predominantly a story of investing ahead of the curve, first in its 3G roll-out and now in its LTE 1800 MHz roll-out, although it has been helped by Vodafone Australia’s network problems,” the Morgan Stanley report said.
The analyst claim that the LTE strategy has given Telstra a marker boost with faster addition of new subs, lower churn rates than competitors and sustained premium pricing.
The report claims that globally carriers such as Vodafone are trying to emulate the Telstra LTE strategy.®