How Telstra’s Growth Creates A Speed Hump

Telstra acquired another 338,000 contract mobile phone customers and 9.8 million prepaid mobile users in the last six months, along with 436,000 mobile broadband customers. It now has 6.4 million contract mobile customers, 3.3 million prepaid customers and 2.7 million mobile broadband users. That’s good news for Telstra shareholders, but it underlines a dilemma for consumers and the company: if Telstra doesn’t constantly keep installing new network equipment, speeds for everyone are going to keep getting slower over time.

Telstra certainly has an aggressive rollout policy, most evident recently in its rollout of LTE-based services with 4G branding. We’ve seen impressive results with those services, both on mobile broadband and the HTC Velocity handset. But both those tests were conducted when the services were new and had just a handful of subscribers. As more people sign up, the performance invariably slows, because there is only so much bandwidth to go around. We saw that with the dual-channel Ultimate services, and we’ll see that with LTE as well. With 100,000 4G dongles already sold, it might not take very long.

As long as successor networks keep getting lined up and coverage on existing services is enhanced, there shouldn’t be a major performance hit. But it’s always worth remembering: the mobile broadband speed you get today may not be the mobile broadband speed you get tomorrow. In that respect, fixed lines still have major advantages.