Optus buys Vividwireless to secure 4G capacity
SingTel's Australian arm snaps up former WiMAX player from Seven Group to support TD-LTE while Softbank goes live with 4G too
Published: 20 February, 2012
READ MORE: M&A | Australia | Infrastructure | LTE
Some of the WiMAX pioneers are finding a role close to the heart of larger operators' strategies as the mobile data overload mounts. UQ supports offload and new services for KDDI, Clearwire for Sprint, and now Australian carrier Optus has acquired WiMAX firm Vividwireless to boost its broadband capacity.
Vividwireless has had a turbulent history, beginning life as Unwired Australia, which was well ahead of the curve in mobile broadband in pre-WiMAX days. It was subsequently bought by broadcast group Seven, and has been migrating from WiMAX to TD-LTE.
Optus - a subsidiary of SingTel - will pay Au$230m in cash for its new unit, gaining up to 98MHz of TDD spectrum in the 2.3GHz band, which will support an LTE network to provide broadband and offload services, to complement the carrier's FD-LTE roll-out in 1.8GHz, This will kick off in April in two regions of New South Wales.
There are various conditions to the deal, notably the reissue of Vividwireless' 2.3GHz licence and approval from regulators.
"The acquisition of Vividwireless will give Optus a significant increase in network capacity to address the next wave of data growth that is just around the corner," said the cellco's CEO Paul O'Sullivan. "By integrating it with our current 4G roll-out, we will be able to provide increased mobile speeds to our customers in metropolitan Australia."
Ownership by a parent more heavily focused on mobile broadband than Seven will help accelerate Vivid's TD-LTE roll-out. It has WiMAX bases and the beginnings of LTE in metropolitan markets in Sydney, Melbourne, Adelaide, Brisbane and Canberra, but its main TD-LTE services are in Perth.
"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," said Seven Group's CEO Peter Gammell. At one time, Seven was said to have ambitious plans to harness TD-LTE for video services and a quad play, but it wanted an investor to help shoulder the burden of rolling out the network. After 18 months of searching, it has failed to secure a partner, partly because of uncertainty over the cost of the spectrum licence renewal.
This will be a less urgent consideration for Optus, which - like most cellcos in developed countries - will need to gain more spectrum capacity at almost any price, and needs to respond to the advanced HSPA+ and LTE strategies of incumbent Telstra.
Also turning a former WiMAX outfit to new users is Softbank in Japan, which promises speeds up to 100Mbps with a new service launching this week. In 2010, Softbank acquired part of the business of established operator Willcom, which had been awarded a 2.3GHz licence to support AXGP, an OFDM-based upgrade for its legacy PHS technology.
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