NBN’s viability threatened by 5G roll-out

Veteran Telecommunications analyst, Paul Budde, has challenged the notion that the roll-out of 5G mobile across Australia threatens the viability of the National Broadband Network (NBN):

First of all, anybody who has started to use video-based media over mobile networks seriously – beyond Facebook, YouTube and so forth – will have noticed that you will very quickly run out of the download capacity that is included in your mobile phone package and any serious video use over mobile networks will quickly run into hundreds of dollars per month.

Secondly, 5G as a viable commercial mass-market alternative might be 10 and possibly even 15 years away.

For starters, there is still not a 5G standard and this is essential for vendors to provide devices for mass markets in order to deliver an affordable device. Totally new handsets are needed to facilitate the multiple tiny antennas that are required for the device to operate over the high frequency necessary for 5G. No mass market will be achievable without a standard for such devices…

5G could require a hundred-fold increase in mobile base stations and most of them need to be linked to a fibre optic network.

For the service to deliver the promised quality to the end-users, a fibre optic connection to the 5G base station is needed within 100 metres of the where the actual 5G users are located…

5G has significant problems penetrating walls, foliage, water, even people. So, in order to provide 5G services in these places, multiple 5G antennas are needed within rooms to enable access to mobile services.

While Budde’s arguments are no doubt correct, 5G broadband could easily fill the needs of light users of internet services, thus taking away customers from the NBN. In fact, Budde acknowledges this very point:

…mobile broadband will increase its position at the bottom end of the market, for those people with very basic broadband access requirements. At most, this might be enough for around 15% of the market.

Indeed, the threat from 5G prompted former NBN Co CEO, Bill Morrow, to call for a levy on mobile broadband services to ensure the NBN remains competitive and makes a profit.

ACCC head, Rod Sims, also believes 5G is a genuine competitive threat to the NBN:

“With 5G we will see the first generation of mobile technology capable of delivering broadband services that are comparable to fixed services in terms of speed and capacity”…

“There is an opportunity for wireless operators to attract those consumers who don’t necessarily want the high speeds and unlimited data offered by fixed service providers. For consumers at lower price points, with small data needs, a wireless service might suit better than the NBN”…

While 5G will never be suitable for heavy users of internet data, it could poach profitable casual users. This would obviously smash the NBN’s profitability and ultimately drive an even bigger writedown for the federal budget.

Unconventional Economist
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Comments

  1. It’s kinda funny that ol’ Tone deaf was actually probably kinda right in the end.

    ‘Video entertainment system’ is the only ‘killer app’ for the 80% of the population required to make it profitable.

    • Telstra is positioning 5G as a business product, as a cheaper solution than rolling fibre now that nbn undercut the massive 70 percent profit margin Telstra was making on those business services.

      That tells me the capex on a mass 5G rollout is possibly not stacking up outside of high density areas and commercial precincts.

      The fact it don’t go through walls lends itself to a fixed line replacement with static and carefully positioned 5G router, rather than end users wandering around the house with a mobile getting dropout in half the rooms.

      Time will tell.

  2. Seriously Leith – you need to brush up on the technicals. Here’s a basic primer.

    Internet usage is exactly comparable to available bandwidth – this has been the case since the 1990’s. The amount of bandwidth available will be taken up. This is an unbroken ABSOLUTE.

    I have been working on the internet since the mid-1990’s. Developing software since the 1980’s, and first used the internet not long after it was even made by hacking into a NASA computer from North Melbourne in Australia.

    To make it clear – when we had 16kb/second people looked at emails – and not pictures. Then 32/kb came along and people looked at pictures, then we looked at gifs, then music started – I mean it took half an hour to download a song – yes one song – but who cares.

    The exact law applies today – and thinking people “looking at videos” will some how stay the same is beyond lacking fundamental understanding of the internet. People don’t have a garage to keep the horse in.

    Right now everything is failing with standard definition netflix – almost no one is using 4k except those with high end accounts. (The rest of the world of course does).

    But there’s the rub – already there are a plethora of technologies coming out which are using 4, 8 and even 16k.

    But who cares about that. People want to conference in holographic multi-user presence – why not, better than Skype and of course “email”.

    I want to be able to upload my hard drive to a few people, for storage, backup, cloud access – it currently stands at 3 terrabytes and I aint got all day – the idea that 5G can come anywhere CLOSE to this is risible.

    Fiber has a proven speed over being able to download THE ENTIRE INTERNET in less than one second – think about that – oh and its over 3,000 km, in rain, hail, bushfire, flood or anything else – its glass – no intermediate power required.

    Now back to the MAGIC of 5G – its a wavelength which has been massively “divided” – to keep it simple – so fundamentally to have 5G with the coverage of 4G we will need roughly ten times the base stations – twenty times that of 3G – this is the basic problem with it and why it will only EVER be practical in highly dense capital cities.

    EVEN THEN – and heres what almost no one really understands – because its so weak – you MUST have direct line of site. Most people who are using it are doing so with almost perfect conditions – as soon as this is no longer the case – a wooden wall – it stops.

    Worse – its congestion limits due to its “division” means that while we will not only require ten times more towers – each tower is severely curtailed in its capacity to meet users. Therefore towers will become congested at a much faster rate – and bandwidth will be well below 4G with only a comparatively few users.

    It really is the same argument as FTTP vs FTTN being peddled by people with absolutely no clue all over again. We have the total disaster that is FTTN because people just heard stupid catch phrases without understanding any of the technology – not one scrap, nonetheless people were willing to make all kinds of technical predictions based on their almost zero understanding.

    And here we are again.

    No – for the 50 millionth time – 5G can never, ever, ever EVER EVER,EVER,EVER, replace fiber.

    • Entire internet in 1 second?? Sweet.

      If we lay 2 strands of fibre side by side, can we download the whole internet in 0.5 seconds?

      Are you sure that you were there in the 90s?

      Pretty sure that we didn’t have 16kb or 32kb. Closest we had was 14.4 and 33.6…. and 28.8, in between.

    • “People want to conference in holographic multi-user presence” – that sounds like a vision for future Weekend Links.

      • False.

        BY far most of the internet is Fiber already. When you add up the side by side internets (backhaul, telcos, mobile towers, private banking, dark fiber, government, military) – the copper to peoples homes is almost nothing comparatively speaking.

        Further 90% of the country is now connected or something – not sure of the exact stat – your point is entirely moot.

    • > No – for the 50 millionth time – 5G can never, ever, ever EVER EVER,EVER,EVER, replace fiber.

      It’s not about replacing.
      You don’t replace a truck with a car.
      But most people don’t need a truck. Most people can get by with a car if they choose to.

      If greater than 20% of the houses in Australia decide that 5g (the car) is ‘good enough’, and don’t buy the truck, the whole project becomes unprofitable.

      Think it’s impossible for 25% of the country to decide 5g is good enough for their needs?

      • The 20pct who consider 5g is good enough … if they are only lightweight users, what money are they paying for their service? Bet they are on minimum chips. In which case I dont understand why Nbn cant be profitable without them. If they are high paying low volume users, such publicly spirited folk would be a loss. Let me know if you find one.

          • You’re not thinking right.

            It works at 60% too. If we first increase population by 33% from what was modelled.

            There is nothing (no awful business) that more population can’t fix.

      • Interesting point. If only a small uptake for 5g services can it be economically viable given the vastly increased infrastructure requirements?

      • Please actually read what I wrote.

        The most concrete law of the internet is that take up and usage is directly comparable to bandwidth. Its one of the most accepted laws in the industry.

        Again – people were happy with email only, then images, then mp3’s – people will take up what is on offer.

        No one is happy will be happy with “email only NBN 33 down and 5 up ” when the rest of the planet is complaining about gigabit internet being too slow.

      • Many older users will probably do just fine with 5G. I know plenty of younger people (less than 45) who also have quite low internet needs, and would probably also do quite well on 5G.

      • I had an issue with mine. I contacted the provider, Mate, and they changed the port, or some voodoo like that, and now it runs consistently at the speeds I am paying for.

    • kiwikarynMEMBER

      I distinctly remember people saying that 4G mobile will replace home broadband. How did that work out?

      • Been operating my home business off 4G internet the last 6 months

        1000GB/month data (2x500G Optus business accounts)

        It’s actually not too bad during the day
        Just goes to crap when everyone gets on Netflix/vidya/porn in the evening

    • Just to add to Thin Lizzy’s post, as the internet of the rest of the world moves further ahead of Australia’s they will develop uses for it that we will want here. It is not about what can be done now, it is about preparing for what will be done in the future. FTTN coupled with the NBN’s high access costs means that it is another area where we fall behind the rest of the world.

      • This.

        Stuff that we’ll pay for from OS providers and will never have had a chance to develop and complete locally. And further behind we go.

    • Just to add to Thin Lizzy and add a few points.

      Biggest short coming of 5g is that fails miserably in the rain.

      Yeah – think about that when you claim its going to replace Fiber – doesn’t….work….in…..the…..rain.

      Cool.

    • +1 simple, why is the world connected by undersea fibre optic.
      AUSTRALIA blew it when they went to copper shamozzle…
      It’s all about bandwidth.

      Always will be.

      5G right now is a war about the IOT and plugging into ALL devices globally.

      Your all missing the bigger picture, if you own the internet devices you own the data.

      8ts not about usability it’s about Surveillance hence the USA try to shutdown China and Huawei…

      My five cents.

  3. reusachtigeMEMBER

    Like all things in technology it’s often better to wait until the next version so I’m not going to worry about upgrading until 6G.

    • Don’t forget you pay a $7.10 “Regional Broadband Levy” on each month’s NBN bill so that Nationals voters get cheap satellite Internet.

      Putting a levy on 5G will help keep HFC and VDSL NBN competitive.

  4. kiwikarynMEMBER

    Applications for bandwidth will arrive once its cost effective and ubiquitious. The example that springs to mind is security cameras. The video quality of these at present is appalling. Imagine those cameras are capable of uploading constant streams of 4K (or higher) video to the cloud so that should someone break into your place, you have a great close up photo of them, instead of the blurry shots we currently get shown on Facebook by the cops looking to identify someone. Quality good enough to run through facial recognition software so you don’t even have to go looking for the criminal.

    • What you’re describing is one of the many endless business opportunities we cannot take and make a go of here in Australia because of this utter corruption of the NBN.

      I’d love to have a 4k real time video call with my relatives in the Eastern States and OS so we can see each other, the kids, and just have a good chat, but I can’t see that being a viable thing till we get FTTP as standard. Technology to bring us closer indeed, but we’re so far away.

      • Do you even have a 4k webcam? Many laptop ones are still 720p. And in reality what does a 4k call give you that 1080p HD doesnt? Seems a lot of expense for very marginal improvement. Do you really need to see the mother in law in that much detail?

        • Having recently upgraded to a 4k screen I now find it hard to go to work and put up with lower resolution. At 8K I reckon I’ll not be able to discern pixels at all, and that’s probably at the limits I’ll ever need. Don’t have a webcam. No point. Everyone’s internet is too crap to bother so I just call on the standard mobile network; no data required.

      • Home security is something I take seriously. Between Alexa’s capabilities and decent video footage, our homes should be able to be secured far better than they are currently. I look forward to the day when Alexa guards the house, knows when people are in it, can compare the people on a camera video stream to known household members, and then can contact police if its an intruder.

  5. I admit to the above guru’s I know shyte about how the Internet works & nothing about 5G. But right now I have NBN (FTTP) & it’s the worst overpriced product I have ever had the misfortune to purchase. It is the equivalent of big fees for no service.
    I thank God that 4G works.

  6. You won’t be able to effectively tax mobile broadband because people can hotspot from their phones.

  7. Won’t 5G run on the nbn’s fibre network? Or will the mobile carriers put their own fibre backbone in place?

  8. There’s two main reasons we need the NBN. Netflix (et al) and that mysterious “future use case” that nobody can ever identify.

  9. Told you so. Telstra laughing all the way to the bank!
    Everybody poo-poo’d the idea of mobile data being a threat. Reality is very few peole need 100/100Mbps fibre.

    Look to NZ, which should have been the deployment model used for improvement to ADSL2+ for the majority, then demand based VDSL2 and Fibre via Hybrid cabinets that support all three. Instead Kevin thought he could roll out fibre past everyone’s house starting with politically favoured electorates.

    • NZ has rolled out FTTP so not sure why you think its a model for the deployment of copper based technology? VDSL was rolled out first but only as a temporary upgrade to heavily populated urban areas while FTTP was in the planning stage. Fibre is now available to 80% of New Zealanders. 100 Mbps is the basic plan, 1Gbps is the upgrade plan.

  10. codeazureMEMBER

    Several commenters have mentioned the cost of high data usage on 5G as an issue. This is true with Telstra, but look at Optus’s 5G home plan. $70/month for unlimited data. They guarantee minimum 50Mbps or you can cancel. Many people are getting 200-400Mbps.
    One point made was that once it becomes popular then there will be a bottleneck of the shared bandwidth, which is probably true, but at this stage we don’t have evidence how bad this will be. 4G is pretty widely used and works well in most locations for most people.

    I also looked into the question about whether rain affects 5G. There are comments from users of this service on Whirlpool who benchmarked during rain and saw minimal difference. One commenter said “Thats because in australia we only have midband 3.6 Ghz 5G at the moment. The rain impacting scenario was touted for the much higher frequency of mm wave.”

    I see this service as having the potential to be a viable alternative to NBN. I’m going to try at my home – if it doesn’t work out, I can swap to NBN. But it’s worth a go.