NetGuide NZ - Why Telecom’s 4G hype is likely to backfire

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Why Telecom’s 4G hype is likely to backfire

This week Telecom announced plans to trial LTE (Long Term Evolution), a ‘4G’ technology widely accepted as the next mainstream development for mobile around the world.

It’s good news that one of the major local mobile network operators is embracing LTE. Demand for fast mobile broadband is exploding, meaning customers are demanding the type of services a local LTE network will be capable of delivering.

To some extend Telecom is playing catch-up with rival Vodafone, which carried out a closed LTE trial in Wellington last year.

Both telcos are schooling up on LTE ahead of the Government’s sell-off of the so-called ‘digital dividend’ – the 700MHz spectrum which will become available as a platform for 4G mobile as analogue television signals are shut down over the next year and a half.

Telecom has followed up its LTE announcement with a major marketing campaign. TV ads have begun appearing declaring the company is ‘building a 4G future on Telecom’s smartphone network’.

The company is also promoting its 4G plans on its website.

Promoting 4G when the service isn’t even being trialled yet seems like a recipe for disaster. A basic rule of technology marketing is don’t over-hype what hasn’t been proven to work.

Telecom has fallen into the hype trap before. In 2004 it was criticised over its ‘T3G’ brand, the marketing vehicle for its mobile broadband service at the time, which critics said was actually only a 2.5G offering.

The XT mobile network’s much-hyped launch in 2009 came unstuck when it was plagued with technical glitches. These were fixed and XT has since proven to be solid, with the ‘smartphone network’ marketing line working effectively for Telecom.

The company’s marketer’s temptation to move on from XT is understandable. There’s a constant arms race going on between Telecom and Vodafone over whose network is offering the fastest mobile broadband as the rivals continue to tweak their technologies.

Vodafone got the most recent edge, rolling out dual carrier HSPA+ which has given it a performance advantage on some devices.

But it is very early for Telecom to play the LTE card in response. As CEO Paul Reynolds admitted when announcing the 4G trials this week, the Government hasn’t even outlined its 700MHz plans yet. This means planning a network around the spectrum remains risky.

Also this week we saw Apple get into trouble over LTE labelling in another example of how hyping new technologies can backfire.

Telecom needs to keep its feet on the ground and remember customers are impressed by services delivered today more than future promises.

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