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Telstra wary of 3G role
SYDNEY, Australia (CNN) -- Telstra has downplayed the financial importance of third-generation mobile phone technology in Australia, a day after a 3G launch by smaller rival Hutchison Telecommunications. Delivering Telstra's third-quarter results on Wednesday, CEO Ziggy Switkowski said the company had seen nothing to change its thinking on the financial impact of 3G services, which promise high-speed Internet access and video calls. "In my view, 3G is unlikely to be an issue for us in calendar year 03 or 04," he told an analysts' briefing. Telstra, the dominant phone company in Australia, launched a new high-speed mobile service last month, based on what is known as 2.5G technology. It was followed on Tuesday by Hutchison's "3" service, which promises video calls on mobile phones. In a bid to attract customers, Hutchison -- the No. 4 player in Australia -- surprised the market with lower than expected prices for its full third-generation offering, which is based on wideband CDMA technology. Hutchison CEO Kevin Russell said he wanted to price "3" to encourage usage. Third-ranked Vodafone will launch its own "next generation" service next week, using 2.5G technology. SingTel's Optus, the No. 2 telephone company in Australia, already has picture content services, but not video calls. Hutchison is backed by Hong Kong conglomerate Hutchison Whampoa, which is controlled by the billionaire tycoon Li Ka-shing. Telstra's Switkowski said the third-quarter result of Aust. $5.026 billion ($3.05 billion) in total revenue --including its New Zealand TelstraClear operation -- was "pleasing", but stressed that the company needed to "string together two or three good quarters". He said Telstra was not changing its guidance for the 2002-03 full year of "flattish" revenue and earnings before interest and tax. Last August, Telstra reported a drop of almost 10 percent in earnings to A$3.66 billion on underlying revenue of A$18.8 billion in the 2001-02 year.
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