Telstra plans $100m user-driven Wi-Fi network

Telstra has announced a $100 million project to build one of the world’s largest Wi-Fi networks, with the goal of having two million domestic hotspots active nationwide within five years.

The network, which Telstra aims to launch in early 2015, will use its broadband customers’ own Wi-Fi modems for the bulk of domestic connectivity. It will also encompass access to around 12 million overseas hotspots operated by Wi-Fi provider Fon.

Telstra plans to offer access to the network for both its home broadband subscribers and to non-customers. The company will spend around half the budget building out 8000 Wi-Fi hotspots in cities and towns.

Home broadband customers will be given the option of turning their residences into impromptu Wi-Fi hotspots, sharing a portion of their bandwidth with other Telstra Wi-Fi users, in exchange for the opportunity to use their broadband quota at other hotspots.

To take part in the sharing, Telstra broadband customers will need a Wi-Fi modem capable of sharing bandwidth. Customers with newer modems will require just a software upgrade, or the company will be selling compatible modems for $210. Non-customers will be able to access the network for “a small charge” using day passes.

Telstra said it plans to offer customers seamless access to the Wi-Fi network, providing automatic log-in wherever it is available.

CEO David Thodey said Telstra plans to partner with local councils, small businesses, enterprises and governments to help build out the network.

“We want Australia to be a truly connected country, and as part of our plan, we are keen to work in partnership with local councils and enterprises to grow our Wi-Fi network in Australia’s largest cities and regional centres,” he said.

He said these partners will be able to use the network to offer connectivity in public places as well as cafes, shops and waiting rooms.

“The opportunities go beyond connecting people,” Thodey said. “The city-wide availability of Wi-Fi coupled with the growth in the internet of things can help us improve the way we live in cities. Town planning, sustainability, traffic management, maintenance, public safety and the provision of government services are just some of the challenges that can be tackled.”

Adrian Ho, Ovum principal analyst for enterprise telecoms, called the Wi-Fi project “a good initiative ... in the sense that it makes it easier to stay connected everywhere, and secondly it does help offload mobile traffic off the mobile networks”.

But he commented that if Telstra is serious about building a digital country, it should consider being more generous with access, perhaps offering the service for free for the first 30 minutes of usage.

In an article for Crikey, tech writer Stilgherrian pointed out that Wi-Fi is increasingly being used for marketing purposes, including using the network to track the names, ages and genders of users. “If Telstra is planning something similar - and given that this is increasingly the way things are done, I suspect it’s likely - then this could be the start of one of the most comprehensive consumer tracking databases in the country,” he said.

But during an interview with Fairfax Media, Telstra Retail Group Executive Gordon Ballantyne appeared to rule out such a move. He asserted that the company has “made a firm decision to be pro-privacy” with the Wi-Fi service. Businesses hoping to use the network to collect information on smartphone owners will have to get users’ explicit permission to gather the data, he said.

The Register’s Richard Chirgwin commented that by announcing the Wi-Fi project, “Telstra has accidentally skewered the argument that fixed networks are obsolete.” He pointed out that the average Australian fixed broadband user consumes 46 GB per month, compared to just 1.97 GB for the average wireless broadband user.

“The Wi-Fi announcement is evidence that even with Australia’s frugal mobile download habits, Telstra’s capacity planners see a spectrum crunch on the way - and at $100 million, this network’s a lot cheaper than (for example) doubling the number of base stations,” he said.

Fairfax business columnist Elizabeth Knight noted that while other Australian companies have had little commercial success with Wi-Fi hotspots, Telstra’s sheer scale means such a project makes more success for the company.

“The only hitch is that from a financial perspective it will involve some cannibalisation of its own mobile data usage service. Telstra charges far more to use mobile phone data on its 3G and 4G networks than its competitors do,” she wrote. “It would appear that the overarching strategy is a preparedness to sacrifice a bit of margin in order to differentiate itself from the rival telco companies.”

Image: Telstra CEO David Thodey at the media launch for the project.