Businesses swiftly adopt 4G in Australia: analysts

Australian enterprises are quickly adopting 4G services and show no signs of slowing, according to telecom analysts.

With Vodafone launching its LTE network last month, all three of Australia’s top telcos now offer 4G services for business. The latest generation mobile technology provides faster speeds and makes more efficient use of wireless spectrum capacity.

Telsyte analyst Foad Fadaghi said 13 per cent of all mobile connections in Australian—including consumer, business and M2M—are 4G, and the percentage specific to business penetration is likely consistent.

While 13 per cent may not appear large at first, it shows rapid adoption considering that Telstra has only had a 4G network for 18 months, Optus for only 12 months, and Vodafone has just launched, Fadaghi said.

Business adoption rates of 4G should be high because 4G provides more for your money, said IBRS analyst Guy Cranswick. “Value equation makes it attractive.”

Fadaghi concurred: “It makes no sense for a 3G business customer not to upgrade to 4G when a contract is up, especially when the pricing is the same and the devices are backwardly compatible with 3G networks.”

It would not make business sense for mobile operators to discourage 4G adoption by charging a premium compared to 3G services, added independent telecom analyst Chris Coughlan.

It’s better for telcos to have customers on 4G because it is more efficient and provides more capacity, the analyst said. Also, with the 4G coverage footprint much smaller than 3G, it would be difficult to charge a premium, he said.

The analysts said the main constraint to business adoption of 4G is actually an organisation’s upgrade cycle.

“As all telcos have switched on their 4G networks, business uptake is driven by 4G handset and device penetration,” Fadaghi explained. “Device penetration is in turn driven by a regular upgrade cycle, typically the two-year contracted period.”

“Those that have not upgraded are likely out of the purchase cycle, but inevitably they will upgrade.”

Cranswick noted that the trend towards bring your own device (BYOD) could affect adoption of 4G devices in the workplace. “BYOD is significant here as users make a choice on devices and when depending on contracts,” he said.

Some additional barriers may remain for certain types of businesses, said Fadaghi.

Possible fees to upgrade dongles and Wi-Fi hotspot devices could be a barrier to 4G adoption, “especially if a business does not mainly operate in 4G coverage areas and sees no value in making the investment in 4G dongles/MiFis”, he said.

Another barrier could be a lack of 4G service offerings from mobile virtual network operators (MVNOs) for business customers, he said.

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