Telecommunications entrepreneur, David Teoh, is seeking to steal subscribers from the National Broadband Network (NBN) via a 5G mobile product that would undercut the NBN’s fixed-line offerings:
The technical and other engineering issues that have affected NBN Co’s fixed-line products presents an unusual opportunity for mobile providers offering 5G. At its best, 5G will offer extraordinary download speeds and low latency, which means a capacity to handle large amounts of data.
This perfectly suits Teoh, who built a $2.4 billion fortune by selling disruptive and innovative fixed-line broadband plans through TPG Telecom and its subsidiaries iiNet and internode…
Thanks to this week’s approval from the competition regulator for TPG’s $15 billion merger with Vodafone, Teoh is excited about disrupting the mobile market while targeting people dissatisfied with NBN Co’s service.
In an interview with Chanticleer on Friday, Teoh says the combination of Vodafone’s towers and mobile users with TPG’s fibre back-haul and small cell network will result in a 5G product with high download speeds…
Teoh is confident he can bring his disruptive, consumer-friendly strategies to 5G.
Teoh’s case was strengthened last month when Telstra CEO, Andy Penn, announced that it would no longer offer NBN customers with fibre to the kerb and fibre to the node connections 100mbps plans. Penn admitted that most of those connections are not capable of handling faster speeds and signaled that Telstra would instead offer a competing fixed wireless 5G alternative to the NBN.
Indeed, competition from 5G mobile is ramping up, with Telstra, Optus and Vodafone each gradually rolling-out 5G across Australia:
Telstra and Optus’ 5G rollouts are gradually extending across the country, with Vodafone scheduled to join them this month…
Along with providing 5G coverage to mobile phones, Optus is also using 5G to deliver fixed-wireless home broadband as a substitute for the NBN. In the future, mmWave 5G might also be used by Australia’s telcos to deliver fixed-wireless home broadband, reliant on an outdoor antenna, with the ability to offer gigabit download speeds 10 times faster than the typical fibre NBN connection.
While Telstra will begin consumer mmWave trails in the middle of this year, wide adoption is still several years away. The 26GHz mmWave spectrum won’t be auctioned by Australia’s telecommunications regulator until next year, with Telstra bidding against rivals including Optus and the newly merged TPG/Vodafone.
NBN Co’s corporate plan originally estimated around 20% of Australian households would use mobile-only internet. However, if 5G delivers as promised, mobile’s share could increase significantly, eating into NBN Co’s subscription numbers and revenue.
In turn, NBN Co would be unable to meet its revenue targets, thus driving an even bigger writedown for the federal budget.
The threat from 5G helps to explain why the Senate last month approved a $7.10 a month broadband tax for residential and business users of non-NBN services. It is seeking to stifle competition in a bid to prevent NBN Co from bleeding customers.
