Issue: 02/08

CDMA Opinion

January 23, 2008

This week’s ATUG Opinion is a summary of the latest developments and recommendations for users in regard to the
Minister’s decision that the CDMA mobile network closure be postponed beyond 28 January 2008.

On 18 September 2007, a licence condition took effect that requires Telstra to keep the CDMA network open until
the Next G network provides equivalent or better coverage and services.

Under the terms of the licence condition, the Minister for Broadband, Communications and the Digital Economy was
required to notify Telstra by 21 January 2008 whether he was satisfied that Telstra’s Next G network was providing
equivalent or better coverage and retail services when compared with its CDMA network.

The Minister’s decision was that the CDMA mobile network closure be postponed beyond 28 January 2008.

The Minister for Broadband, Communications and the Digital Economy, Senator Stephen Conroy is urging
consumers to make their necessary arrangements to migrate as quickly as possible.

The Minister has decided “that at this point in time I am not in a position to declare equivalence between the Next
G™ network and the CDMA networks.”

Telstra will provide the Minister with advice within two weeks on how they will address the issues that have been
identified, and report on the rectification to enable the Minister to reconsider this matter.

Telstra’s view is that the rectification can be done by 28 April.

The Minister regards this reasonable, subject to receiving a report that comprehensively addresses concerns. The
Minister advises consumers should work on the basis that the CDMA network will be switched off.

Consumers having difficulties with their Next G™ equipment and services should contact Telstra as a matter of
urgency to have their problems addressed. The Telstra Hotline is 1800 888 888.

A key factor in the Minister’s decision was a report by the Australian Communications and Media Authority
(ACMA) on the coverage of the two networks. Some parts of the report have been blacked out at Telstra’s
request as the material was provided on a confidential basis.

ATUG has attached a highlighted summary of the report for members use. In particular members should inquire
about the list of handsets mentioned as likely to provide less coverage in Finding 7.3 on page 5 of the report.
Users with Remote operations should check the “areas of engineered coverage deficiency with Telstra as at
Finding 8.4 on page 6.

In summary ACMA’s view (page 8, para 2) is that the Next G network provides coverage ‘equivalent to or
better than’ the coverage provided by Telstra’s CDMA network that was is place as at 1 June 2007, when
Next G handsets are used in connection with an external aerial.

ACMA’s report outlines the important issue of Coverage in Handheld Mode at pages 8-9 concluding:

“ In summary and turning to whether the Next G network meets the standards in subclause 15(1)a) of the
carrier licence condition, although there is strong evidence of equivalence of coverage for users of Next G
handsets when used in connection with an external aerial, because equivalent handheld coverage has not been
achieved for customers using the least sensitive Next G mobile phones, ACMA considers overall that the Next
G and CDMA networks are not equivalent within the meaning of clause 15 (1) (a) of the carrier licence condition.”

The Minister summarises:

“ ACMA found, and I agree, that the Next G™ footprint is equivalent to the CDMA network. ACMA also found
that the Next G™ coverage using an external aerial was equivalent; however issues were identified with handheld
coverage, which I have asked Telstra to address.”

The critical issue then becomes the right handset decision.

The Minister says,

“ I have made it clear to Telstra that it should continue to do everything possible to ensure that customers are using
the correct Next G™ equipment. This should include replacing handsets at no financial penalty in genuine cases.”

The Department of Broadband, Communications and the Digital Economy has published the results of a survey
which indicates that some customers have not received the most appropriate advice for their needs.

The specific objectives of the Survey were:

• To test the availability of Next G phones suitable for rural/regional use
(particularly those phones identified with a Blue Tick).
• To ascertain the advice given to people who should be directed to Blue Tick phones because of their particular
profile of use and circumstances.

The survey findings indicate:
Telstra Next G Coverage:

Approximately half of the staff members surveyed provided shoppers with reasonable information about Telstra
Next G coverage in regional/rural or remote areas; 21% did not provide any useful information to shoppers about
coverage.

Telstra Next G Blue Tick phones:

• 83% of stores had immediate availability of Blue Tick handsets; 17% of stores could order in Blue Tick handsets
for shoppers with a wait of between 2 days and 2 weeks.

• Over half of all staff members (59%) explained the details of Telstra Next G Blue Tick mobile phones to shoppers.

• Less than half of staff members (41%) fully endorsed and recommended Blue Tick phones.

• Around 20% of shoppers stated that they did not receive any information about Blue Tick phones, even after
prompting the staff member.

• A small proportion of staff members (2%) actually advised shoppers against Blue Tick phones. Staff members
giving this kind of advice in both cases were significantly more likely to be from Other stores than Telstra stores.

Overall Summary
Telstra Next G Car Kit/ Aerial:

Less than half of shoppers (44%) felt that they received the right advice about car kits or aerials to maximise
coverage.

Overall Customer Experience:

A significantly higher proportion of Telstra staff members were able to accurately determine the shoppers’ needs and
guide shoppers to appropriate phones.

Subgroup Comparison Summary

The final issues addressed by the Minister are:

• a number of customers have depended on the CDMA network to provide their home phones through CDMA
Wireless Local Loop,
• many essential service providers, farmers and agricultural companies use CDMA telemetry systems for remote
data communications.

The Minister has asked Telstra to confirm in its report that this equipment is available to enable the migration, and
that these customers have been given every opportunity to migrate and to provide a further report once the needs of
these customers for an equivalent service have been addressed.

Contact numbers

Telstra Next G handset options

If you are in regional Australia, contact details for your local Telstra Country Wide area general manager can be
found on the countrywide section of Telstra's website.

Telstra Assistance Line: 125 111

Telstra Next G Hotline: 1800 888 888

Department of Broadband, Communications and the Digital Economy
Hotline Next G Customer Support Line: 1800 883 488

Customers who are not satisfied with Telstra's response can also visit the
Telecommunications Industry Ombudsman (TIO) or phone 1800 062 058. The TIO is an office of last resort that
provides free and independent dispute resolution for complaints made by residential and small business consumers
of telecommunications services.

For corporate users, ATUG’s advice is to:

• Qualify the types of services CDMA is being used for - voice calls or monitoring devices
• Be careful with the handset decision – try before you buy
• Put some people behind this task.
• Talk with Telstra and have them provide you with reporting about devices, handset options.
• Buy units outright – don’t lock into contracts, when contracts are up for renewal you can make further decisions.

For all users:

• Be careful and prepared for a rush on blue tick phones, anticipate a shortage.
• Work to the assumption the CDMA will be switched off on the 28th April.

ATUG is interested in member feedback on their experience in migrating to Next G. We will post information to our
Home Page for the benefit of other users. Please email lauren.mcginley@atug.org.au with your comments and
suggestions.