Optus sizes up customer inaction leading into 3G shutdown

Optus has predicted that 100,000 or more customers may not act before its 3G network is shut down, leaving them impacted in some manner.

The comments came as Telstra, Optus and TPG Telecom jointly fronted a senate inquiry into the remaining closures of 3G networks, starting the end of next month.

While closure plans have existed for some time, it’s only this year that a potential hurdle emerged - with a number of mostly imported 4G handsets unable to make emergency calls except over 3G.

There are other customer cohorts impacted by the 3G shutdown as well: those with 3G-only or 4G non-VoLTE handsets.

In addition, some impact is anticipated for non-handset devices such as older wearables, internet dongles, medical alarms and IoT smart meters.

But it was the impact on consumer users that took precedence in discussions on Wednesday, and in particular, the number of customers that could be left “worse off” when the Telstra and Optus 3G networks are closed.

Both Telstra and Optus indicated they are trying to minimise the impact, including by providing free devices to some customers. Telstra has given away “over 12,000” phones and Optus some 20,000, representatives for both telcos said.

Optus is also offering postpaid customers a $400 credit to encourage them to upgrade; the amount, head of new products Harvey Wright said, could go a long way towards subsidising a new handset.

“If they want an entry-level smartphone, they can get that pretty much at zero cost in terms of that $400 can fully subsidise a handset in the lower end of the range,” Wright said.

However, despite these efforts, both Optus and Telstra said that past experiences - for example, with the 2G shutdown - showed that a proportion of customers would simply not act before the 3G shutdown began.

Optus’ Wright put a size on that: “We’re still reducing the number of customers obviously, but it could be in the order of 100,000 to 150,000 customers,” he said.

Telstra’s chief sustainability officer Justine Rowe said that despite “almost five years” of customer engagement, Telstra similarly expected that “some customers won’t take action.” 

“We don’t have an estimate of the numbers that will actually be left on our network at the moment, because we are planning to get that as close to zero as possible - but we know it won’t be zero,” she said.

“There will be customers that choose not to take action, and we’re here to support them. 

“So, we have a post-closure support plan in place and that is part of our broader preparation strategy.”

Wright concurred, noting Optus’ “experience in these types of mass-migration and shutdown processes in the past.” 

“We obviously shut down the 2G network and migrated customers successfully off that; we shut down the Virgin Mobile business; and in fact we also shut down the 2100MHz portion of our 3G network, so we’ve got some good lessons as it relates to how to manage customers, both prior to and following the shutdown. 

“What we found from that experience is you can absolutely move a portion of customers ahead of the shutdown through communication, awareness building, and incentives and offers. 

“But the nature of these types of migrations is that there’ll always be a certain portion of customers that don’t act, even if they are aware. It’s just human nature.”

By the numbers

The government last week indicated that the number of 4G handsets in circulation that would lose access to Triple Zero when 3G networks are shut down has reduced to 102,000.

The number now appears to be around 65,000 - comprising 25,611 devices on Optus, 9000 on Telstra and 30,114 on TPG Telecom.

Each telco provided sets of statistics on other impacted device cohorts.

Telstra

Telstra, for example, indicated there are 40,000 3G-only handsets in use; 186,000 4G non-VoLTE handsets that use 3G for voice; and the 9000 4G VoLTE handsets that use 3G for emergency calling.

Of the 3G-only handsets, 26,000 are with consumers, 3000 with business, 4000 on enterprise accounts, and 6000 via Telstra MVNO or wholesale arrangements.

On the non-handset front, there are 399,000 3G-capable IoT devices = such as water and electricity meters - in use, alongside 63,000 smart watches that do not support 4G, and 45,000 “wireless broadband [dongles] or tablets”, according to general manager of network DevOps Gerard Tracey.

Telstra is intending to shut down its 3G network at the end of August.

Optus

Optus provided an overall figure of 176,000 mobile handsets being at risk of disconnection, which it said was down 34 percent since May.

It offered to provide a breakdown of this overall number after the hearing.

On the non-handset front, Optus has about 100,000 “data devices” in circulation, which it said were “predominantly enterprise” in nature.

Optus indicated it would begin to shut its 3G network in phases, starting September 1.

TPG Telecom

TPG Telecom is in a slightly different space, having already shut down its own 3G network last year.

Still, head of government relations Ross Mitchell said there are still 228 3G-only devices on its network - “customers primarily in regional areas relying on [an] Optus 3G roaming arrangement” that TPG had, but that would be impacted by closure.

In addition, TPG had 7978 4G non-VoLTE handsets and 30,014 “4G VoLTE capable phones that rely on the 3G network to make an emergency call”, Mitchell said.

TPG also has another cohort of around 16,500 handouts that it is “still seeking to understand the device capability … to determine whether those can make an emergency call on the 4G VoLTE system,” Mitchell said.

The number of 3G-using wearables and data devices in use is 1329.