Last week it was revealed that telecommunications entrepreneur, David Teoh, was planning to use the $15 billion merger between TPG and Vodafone to launch a 5G mobile product to undercut the National Broadband Network’s (NBN) fixed-line offerings.
This followed Telstra’s CEO, Andy Penn, who last month signaled it would offer a competing fixed wireless 5G alternative to the NBN.
Now, Telstra chairman, John Mullen has vowed to compete head on with the NBN for customers in lucrative city areas, warning it would steal 10% to 30% of NBN customers:
Mr Mullen told The Australian Financial Review Business Summit in Sydney that he believed up to 30 per cent of the market could ditch fixed-line internet connections…
“Telstra by the arcane nature of the various agreements that we entered into during the formation of the NBN, is not allowed to advertise 5G fixed wireless as an alternative to the NBN. But we are certainly allowed to build that capability,” Mr Mullen said…
“There is no doubt that the fixed wireless alternative will take share from the traditional fixed-line operators, it’s happening all around the world…
“[NBN] is going to have a tough time, I feel for them. It is going to be a migration of somewhere between 10 and 30 per cent probably.”
Telstra’s declaration of war comes amid further complaints that the NBN is not up to operational standards:
The number of outages experienced by TPG customers connected to the NBN via hybrid fibre-coaxial (HFC) surged from 72,000 in September to 130,000 in February, the telco revealed to industry publication CommsDay…
“HFC remains a large concern,” TPG boss Craig Levy told CommsDay on Monday.
The amount of outages going on in the network compared to other access technologies suggests it’s not up to operational standards.”
HFC is expected to service approximately 1.6 million of the seven million premises that will be connected to the NBN by its June 30 completion deadline.
TPG’s revelations follow a shock move by Telstra last month, with the telco announcing that it would halve the speed of its fastest broadband internet plan available to NBN users connected via three of the seven access technologies because “a number of our customers on FTTN/B/C do not have connections that are capable of achieving 100Mbps”.
NBN Co’s corporate plan initially forecast that around 20% of households would use mobile-only internet. However, if competition from 5G heats up, and the technology delivers as promised, then mobile’s market share could rise significantly, thereby eating into NBN Co’s subscription numbers and revenue base.
If true, NBN Co would also fail to meet its revenue targets, thus forcing the federal government into a bigger writedown for the federal budget.
The situation facing the NBN would be even worse had the Senate last month not approved a $7.10 a month broadband tax for residential and business users of non-NBN services. This tax has been specifically designed to stifle competition and prevent NBN Co from bleeding customers and revenue.
