5G to cut NBN’s subscription lunch

Telstra this week announced that it will no longer sell 100mbps plans to consumers with fibre to the kerb and fibre to the node connections to the NBN. CEO Andy Penn says most of those connections are not capable of handling such speeds, and has signaled that Telstra may instead offer a fixed wireless 5G alternative to the NBN, even though it has signed a non-compete agreement with NBN Co:

“I think it’s entirely appropriate for us to provide the best technology for the customers and compete in the markets as they develop,” Mr Penn said.

“The data that people typically use in their fixed network at home is substantially more than is typically used in mobile, and so one needs to be thoughtful about which customers might be appropriate for fixed wireless. But absolutely we can provide it where it is an appropriate technology for those customers”…

If Telstra claims NBN can not deliver 100 Mbps speeds to people on FTTC and FTTN connections, then offering them a 100 Mbps fixed wireless product might not be considered competing.

Asked whether this was the reason for the decision to stop selling the 100 Mbps plans, Mr Penn said: “There is nothing stopping us providing fixed wireless to customers”…

5G fixed wireless has the potential to provide far superior speeds than NBN’s current standard plans, but it is only likely to become a real threat to the NBN when the “millimetre wave band” spectrum is available.

5G broadband could easily fill the needs of light users of internet services, thus taking away customers from the NBN. Veteran telecommunications analyst, Paul Budde, believes 5G could compete for up to 15% of the market:

…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 is the key reason why the Senate this month approved a $7.10 a month broadband tax for residential and business users of non-NBN services.

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”…

Thus, 5G is emerging as a genuine competitive threat to the NBN for casual users with light data needs.

Its emergence risks stealing NBN subscriptions, reducing profitability and ultimately driving an even bigger writedown for the federal budget.

Leith van Onselen
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Comments

    • That’s why we’ll all be paying a $7.10/month 5G and broadband tax to stop any competition to the NBN.

      • Telstra can just label this as 5g mobile not 5g broadband. You
        Just need the SIM card and you are set to get your own device.

  1. But you and everyone on this blog told me that wireless was inadequate and would always be inadequate

    You mean to tell me we didn’t need to deliver fibre optic cable to every bumfuk suburb and town in the country so they can watch porn and play vidya games

    • fibre should still be better than 5g but yes with sufficient 5G infrastructure its perfectly fine for the average household, in areas that utilise the internet to its maximum or need a constant stable connection they will still want fibre.

      • The big issue will be data. If you are a family that is streaming a lot across different devices the costs could blow out very quickly.

        • definitely but i was pretty sure that those prices are only so high because of their connection to when phones first became internet capable and it was seen as a premium or luxury so thats why they made the price as high as it is for so little data.

        • then maybe you, as a family, should pay for the pointless indulgence of streaming entertainment on to multiple devices

          Rather than having the nation subsidise your pointless and brainless activities?

          • As a healthy, single and gainfully employed PAYGer that doesn’t pursue tax minimization I’m contributing above and beyond my call of duty.

      • So what about 6G? It has to be in the pipeline. Fibre might still connect the masts, but in the not too distant future, it will all be wireless.
        Fibre, let alone ADSL, will go the way of the telegraph.

        • Fibre, let alone ADSL, will go the way of the telegraph

          Only if you somehow defy the laws of physics. .

          • the laws of physics have been thrown out the window many times before, so why would you think they wont be thrown out again?

            Relativity, dark matter, quantum particles etc

        • Fibre, as a dedicated point-to-point wave guide will always provide greater throughput than a shared broadcast service.

          just sayin’

          • that’s a helluva saying for “just.
            and as obviously correct as it can be.

            5G will be good mostly… But…
            fibre can deliver secure, reliable and steady speeds equivalent of 10G wireless (exaggerating to make a point)

  2. A masterclass from Telstra here:
    – get paid squillions for handing a crappy copper network to NBN for decomm.
    – assist in the sabotaging of the NBN as FTTP
    – exit the high bandwidth NBN market as ploy to sidestep the non-compete
    – decimate the NBN via shaving large chunks of demand with 5G

    Next step is probably to argue that NBNCo can’t be trusted to fix this debacle and it should all be given back to Telstra! And they get back to where they always wanted to be – the monopoly owner/operator of the next 50/100yr national comms asset.

    • Telstra are not the only company building 5G, one Optus and the TPG/Voda group get in on the act it will be anyones game if data is cheap enough and coverage is sufficient. NBN is already looking at a potential death spiral IF 5G can handle the load of a fixed network.

      • What everyone is missing is the poor penetration of 5G. The lower the wavelength, the poorer the transmission. Sure, it might be great for those that live in skykennels, but if you think there will be a 5G tower on every street corner in wider suburbia to make it work properly, then I think you might be disappointed. Also, if you need a fibre connection to every tower on every street, then you might as well do fttp. Which was the original plan until the fvckwit cvnts that are the LNP totally sabotaged it.

        • BoomToBustMEMBER

          I’d be using an external antenna on a roof mounted pole, take care of any penetration issues. But I agree, many more towers will be needed to achieve the necessary coverage. Don’t get me started about the lack of IPv4 addresses.

    • And this… Same deal with gas, electricity & water. Oh for the good old days when a monopoly was a govt monopoly and we still paid through the nose and did not have to endure the indignity of smoke and mirrors feel good marketing
      And Bull $ hit plans: SEC Telecom

    • You can add to the list the cohort of non-performing managers that left Telstra to manage the NBN

  3. Nice theory. But if you take a look at how Telstra makes its money (or increasingly lack thereof) you’ll find that Telstra is simply a mobile phone network. An overpriced and dud business model, with an unskilled and untalented management team. If you’re looking to point the corruption finger somewhere.. Telstra is not even competent to receive that.

  4. You’ll find that if 5G becomes a serious threat, if it takes 15% of the market, that $7 tax will quickly become a $30 a month tax.

  5. Hmmnn reading between the lines. Telstra is positioning 5G as more of a fixed line alternative in high density business precincts rather than a replacement for the 4G mobile network.

    Rolling out 5G to cover large areas requires massive capex due to significantly higher cell density required. I wonder if the business case on a mass rollout of 5G ain’t looking so good.

    Competition and choice is great so I think it’s healthy for our teleco industry anyway, but I doubt many people will soon have the choice to get their house hooked up to 5G