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Telstra Says 4G Plan Won't Conflict with Australian Network

Australia's largest phone company teams with Ericsson to build high-speed wireless network

(Bloomberg) — Telstra Corp.'s plans for a fourth- generation wireless broadband system don't conflict with the rollout of Australia's fixed-line National Broadband Network, Chief Executive Officer David Thodey said.

Telstra, Australia's largest phone company, announced plans yesterday to build the 4G network with Ericsson AB. It sees the two plans "as truly complementary, and we're going to keep pushing it that way," Thodey said in an interview in Barcelona today. "We're more focused on driving both wireless takeup and fixed takeup; we really do honestly believe they can co-exist."

Telstra reached a preliminary agreement with the government in June to hand over its fixed-line network to the state-backed NBN in exchange for A$11 billion ($11 billion) in compensation. The planned A$43 billion government-owned network is a source of political disagreement, with the opposition Liberal-National coalition pledging in last year's parliamentary elections to scrap the plan in favor of a scaled-down version.

The spread of increasingly rapid mobile connections—which could reach 42 megabits per second in some areas under Telstra's 4G plan—could have "significant long-term implications" for the success of the NBN if large numbers of users forgo fixed connections, consulting company Greenhill Caliburn said in a report for the government published yesterday.

Still, even the fastest wireless networks "will never be the speed of fiber," which will limit the number of mobile-only households, Thodey said.

Telstra will have to join rivals in leasing access to infrastructure from the NBN once it transfers control of its fixed-line network to the government. The national network plans to connect to 93 percent of Australia's population by 2018.

Melbourne-based Telstra has been cutting prices for wireless broadband to tap demand for Internet access through Apple Inc. iPads and other tablet computers.

Campbell is a reporter for Bloomberg News. Fenner is a reporter for Bloomberg News.

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