Telstra 4G data doubles every 3 months

Giant telecommunications company Telstra Corporation (ASX: TLS) says it is seeing a massive 23% growth in traffic on its 4G network – every Month, roughly doubling every three months.

While the 4G network is still fairly new – it was launched in 2011 – Telstra is taking steps to future protect its customers and market leading position through trialling new technologies. Today the company announced that it is the first mobile carrier in the world to trial LTE-Broadcast (LTE-B) live on a commercial network.

Many telco customers currently want the same content delivered to their mobile devices at the same time, such as TV program, a software update or a sports broadcast. Traditionally, if 100 people in a mobile network cell wanted this content, Telstra would send out 100 duplicate streams of data – which uses a lot of network capacity. This is where LTE-B comes in. The Telstra trial shows that it’s possible to use one stream of data to deliver the same content to multiple users – a similar concept to how TV networks broadcast to multiple televisions with one stream.

Should the technology become widely available, that should cut down data usage on the 4G network, and extend its useful life, before it needs to be upgraded or replaced.

At the same time Telstra boss David Thodey has told Financial Review Sunday that mobile device growth has not fully matured, despite mobile penetration at more than 100%. Today in Australia we have about 32 million mobile devices, but he expects over the next four of five years they will go to 100 million. Telstra has around 15.3 million mobile subscribers, or around 48% of the market, and sales from its mobile business make up around a third of the telco’s revenue at $9.2 billion.

With a surge in new consumer wearable devices such as Apple’s rumoured iWatch, Google Glasses and Samsung’s smart watch, it would be foolish (lowercase ‘f’) to dismiss Mr Thodey’s prediction as pie in the sky stuff.

The biggest risk to Telstra’s dominance of the mobile market is the resurgence of Optus – owned by Singapore Telecommunications (ASX: SGT) and Vodafone – partly owned by Hutchison Telecommunications (ASX: HTA). Both carriers have launched their own 4G networks, and generally offer more aggressively priced plans than Telstra.

Foolish takeaway

Data growth is exploding as more devices and more content is accessed. Telstra, as well as companies like Vocus Communications (ASX: VOC) and Amcom Telecommunications (ASX: AMM) are perfectly placed to take advantage of the trend.

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Motley Fool writer/analyst Mike King owns shares in Telstra, Vocus and Amcom.

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