Telstra predicts 5G boost to wireless-only households

Telstra’s CEO, Andy Penn, says that the telco believes 5G could potentially boost by 10-15 percentage points the proportion of Australian households choosing to go wireless-only. Currently around 15 per cent of homes have no fixed broadband services, the CEO today told a Telstra strategy update briefing.

“We already have a number of offerings in the market for our customers who choose to have a wireless-only solution, as do the other mobile operators,” Penn said.

“But 5G will open up new opportunities and new markets in this regard and we have rolled out significant core capacity to support this and we will have the products and services to support these customers as we compete in the mobile sector.”

Penn said that Telstra will roll out the next-generation wireless technology in three phases. Currently it is in the middle of phase one. 5G-capable smartphones are unlikely to hit the mainstream until late 2019 or early 2020, and in the meantime 5G will see use in other offerings such as fixed wireless, he said.

Optus has announced plans to begin offering a 5G-based fixed wireless service beginning in January 2019. During the Commonwealth Games earlier this year, Telstra offered visitors to the Gold Coast access to 5G-enabled Wi-Fi hot spots.

When it comes to cost reduction, 5G offers “another step up” from 4G — which has already reduced the cost of per bit of network traffic by 80 per cent, Telstra chief operating officer Robyn Denholm said. “The capacity you can deliver is 10x that of 4G,” she told the briefing.

The low latency characteristics of 5G open up a host of new business opportunities , the Telstra executive added.

Earlier this year Telstra launched its 5G Innovation Centre on the Gold Coast, which Denholm said was an effort to help “create the ecosystem between device manufacturers and our network capabilities”.

She noted that late last year Telstra and Ericsson partnered to make the first call over mmWave spectrum.

“We will have a network that is 5G ready in the first half of FY19,” Denholm said. “Our 5G commercial launch will be in FY20.”

“We will have a national commercial deployment of 5G in major cities and all high-demand regional centres in FY 20,” she added.

Penn reiterated Telstra’s view that the new technology will not replace fixed-line NBN services.

“The volumes of data on fixed networks exceed those on mobile by more than 50 times and whilst 5G will create a number of options for customers who choose to go wireless, it will not be for everyone,” the CEO said.

The second phase of the 5G rollout will see mainstream availability of compatible smartphones. Penn said the telco plans to roll 5G out “fast and extensively”.

The third phase will “comprise the longer term opportunities for growth, many of which have not even been identified yet,” the CEO said.

“We have already laid substantial foundations in the Internet of Things and connected solutions which are the early use cases that we have already deployed on 3G and 4G. These are the precursors for the long-term growth opportunities that will exist.”

The telco intends hold a 5G strategy day later in 2018.

The big news out of today's briefing was Telstra's plan to slash thousands of jobs as well its move to set up a new business unit, InfraCo, that could potentially be spun out into an independent company.