UPDATED: Optus moves into 4G – buys vividwireless from Seven

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UPDATED: Seven Group Holdings (the people who own, obviously, Channel Seven) has sold its ownership of 4G mobile internet provider vividwireless to Optus in a deal worth $230 million. Optus has confirmed that the deal will kickstart their 4G plans, with the deal appearing to be a spectrum buy.

“This transaction is the most logical step forward for vividwireless as it allows the business to more rapidly deploy TD-LTE services than might otherwise have been the case,” Seven Group Holdings’ CEO Peter Gammel said in a statement.

“We are very proud of the achievements of vividwireless. For SGH, this sale recognises value for the investment in vividwireless and positions the business to grow with further investment from Optus.”

The deal includes the operating business; customers; and, the more important, spectrum licences that allow it to run its 4G network. Currently, its 4G footprint include Perth, and selected areas in Sydney, Melbourne, Adelaide, Brisbane and Canberra.

Optus will have access to 98MHz of spectrum in the 2.3GHz band, and will use it to build its “4G network using LTE-TDD technology”. Optus plans to integrate this with its 1800MHz band which it will use for 4G connectivity, which will be launched in Newcastle in April this year.

The only major telco that has a launched a 4G network is Telstra. It currently has the upper-hand with a 4G network covering all major capital cities and regional centres. Optus’ 4G network will cover most capital cities in the mainland, and one regional city – and should expand by the end of the year to somewhat compete (hopefully). Vodafone has not announced their plans yet.

Telstra is also using its 1800MHz network for LTE, but even that has problems. As noted by Alex Kidman on ABC Technology and Games’ website:

… the 1800MHz frequency that Telstra is using has poorer travel characteristics through solid objects (buildings. In other words). Plus, the rollout of the technology sits in a complimentary position to 3G – it’s not replacing it.

But the problem is (and thanks Jason Murray) that vividwireless is a WiMax service, not LTE. Optus has previously hinted that it will launch an LTE network in April. So, either Optus has changed their mind about how they will implement 4G, or they will do a costly switchover to LTE (a la Sprint in the United States, where it switched from WiMax to LTE).

Amendment: Optus has announced that it will be using the spectrum to build out a LTE-TDD network that will give speeds ranging from 25Mbps to 87Mbps, based on a trial conducted by vividwireless earlier in the year. According to Delimiter, it will migrate existing customers over to LTE.

The deal is subject to approval from the ACCC and the Foreign Investment Review Board (FIRB); and the spectrum licence renewal.

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