Telstra circles NBN

Telstra executive Nikos Katinakis says its 5G network now covers over 40% of the Australian population, with 75% coverage expected to be achieved by June 2021:

“We’re now in more than 2000 sites across the country, and in over 60 cities and towns, and 1400 suburbs that have 50 per cent coverage or more,” Mr Katinakis said. “We’ve reversed the typical trend from previous technologies, where we would wait for the devices to show up before we deploy the network.

“Data consumption is growing at 30 to 40 per cent every year, so if we don’t do something, people are going to get a terrible experience, and they’ll complain ‘my Netflix doesn’t work’ or ‘My WhatsApp is slow’.

“And for us, it’s been super important to get community support, and to get municipality and political support, because otherwise these things just don’t happen.”

This spells bad news for the National Broadband Network (NBN), given 5G offers the speeds and bandwidth to compete directly with fixed broadband.

Indeed, Telstra recently announced that it would launch a “5G Home Internet” product, delivered over its mobile network through a wireless modem, offering download speeds of between 50 and 300 megabits per second for $85 a month, with a monthly data allowance of 500GB.

Communications Minister Paul Fletcher also backed Telstra’s plan, confirming that its decision to compete directly with the NBN via 5G home broadband would not violate the non-compete agreement signed by the two parties.

So, after Telstra has received $11 billion in instalments from taxpayers in exchange for its fixed line customers migrating to the NBN, its is now actively stealing market share and wrecking the NBN’s profitability and market value via its 5G rollout.

The next move will be for Telstra to acquire the NBN’s wholesale network at a peppercorn price from the federal government.

Then the circle will be complete. Telstra will have succeeded in first offloading its wholesale network for $11 billion before purchasing it back from the NBN at a heavy discount.

You’ve gotta hand it to Telstra. It has played the federal government for fools on the NBN and has put itself in a position to win no matter the outcome.

Unconventional Economist

Comments

    • RanganutsMEMBER

      What is everyone’s thoughts on Starlink as a threat to Telstra, NBN and 5G? I own far too many Telstra shares, (yes I was one that jumped on the float bandwagon… now quite a perturbed shareholder), but am trying to figure out what Starlink will do to telecommunications networks around the world. Will latency be an issue for most users?

      Musk charges the world $10 a month for access and it becomes the Uber/Netflix of communications and internet access.

      • More homework required for you
        but here’s a spoiler,
        all those you mention have a very short life.

      • The problem with wireless technology like the “earth part” of starlink (and 5g) is interference. They tend to crap themselves as the density of transmissions in an area increases… like people trying to talk to each other in a nightclub.

        The “space part” of starlink (and fixed optical communication) doesn’t suffer this problem, in fact this is star links edge – because light travels faster in a vacuum. Star link should see lower latency… as long as you are using it from broken hill that is 🙂

      • Starlink is intended for remote areas where it costs too much to roll out terrestrial infrastructure, just as NBNCo’s SkyMuster satellite service already does.
        The difference with that though is that Starlink is a low-earth orbit constellation rather than a geostationary satellite, so not only is the latency lower, but there is much more total bandwidth available as each satellite acts like a mobile phone tower so there’ll be dozens to hundreds over Australia at any one time rather than the single NBNCo satellite.

    • Less Woke More BlokeMEMBER

      Been trying to catch them post launch when they’re all still together, no luck yet.

      • They launch at an equatorial inclination angle of about 49 degrees
        which means their first pass for this region is half way to the south pole
        If you look to the east or west just prior to sunset or sunrise you can often see the very bright flash of an Iridium satellite
        (took me a while to ensure I wasnt seeing things)

  1. > This spells bad news for the National Broadband Network (NBN), given 5G offers the speeds and bandwidth to compete directly with fixed broadband.

    Yes. And No.

    5g’s ultra fast modes rely on practically wifi distances to work well. Realistically, they were designed for stadiums and NYE type events where the congestion is so bad you can wait minutes for a text.

    However, if they push it closer to the home, it inevitably means one thing. More base stations. Millions of them. They’ll be connected to a fixed line. Which company now owns 90% of the fixed lines in the country with fibre a rough max of 200m from every metro house?

    Yep. NBN.
    What are the base stations going to connect to? You guessed it.

  2. 5G won’t replace NBN at that pricing, except for in the areas where NBN only offers fixed-wireless.

  3. DelraiserMEMBER

    Good ole Telstra got ya fooled again………….this analysis is extraordinarily shallow and overlooks the game being played here. 5G is essentially embryonic in the market so this is a “plant the flag” moment for the carriers. When 5G iPhones go on sale, Telstra will be able to tell everyone that the little 5G pops up in the top left hand corner of the screen more on their network. What they fail to add is they have primarily rolled out 5G for coverage on low band at the expense of capacity. The latest 4G phones will likely outperform 5G due to carrier aggregation ta this point in time. The big play will be when 3500Mhz spectrum is rolled out in anger and genuine bandwidth is available to users. Until then it’s just a card trick

    • Absolutely. Also agree with Bloke. It’s not a matter of one or the other, to have a decent broadband network we need both and Scummo’s 3.5bn is not enough to fix it.