But whether customers flock to 5G, a wireless technology theoretically
capable of 1 to 10 gigabits per second (Gbps), will depend on the cost and
performance of the national broadband network (NBN) when the nascent technology
is rolled out within the coming three years.
These are conclusions drawn by the Australian Competition and Consumer
Commission (ACCC) after a yearlong investigation published in a draft
report titled Communications sector market study.
The report, which makes 29 proposals intended to improve market conditions,
focuses largely on the national broadband network, noting the high cost of
its plans, the connection delays people face, and the
less-than-satisfactory performance of NBN services.
"5G will offer significant opportunities for industry and consumers," says
Rod Sims, chair of the ACCC. "It may also disrupt existing business models,
for example, increasing substitution from fixed internet services to
Turning away from the NBN and towards 5G internet
Almost half of the 6.2 million households and businesses eligible have
taken up an NBN connection, though expensive pricing has
resulted in 84% of them signing up to introductory plans with speeds of 12
to 25Mbps. This is compared to top-tier plans offering download speeds of
But retailers, such as Telstra and Optus, will have to pay more money to network wholesaler NbnTM if they want to give customers access to faster plans. NbnTM believes customers are prepared to have these costs
passed onto them, but retailers don't think that's the case.
The inflated pricing, lacklustre performance and long connection delays
makes mobile 5G internet a promising prospect for when it arrives in 2020 – the same year construction on the national broadband network is expected to finish.
"Technological evolution, particularly the advent of 5G, creates
considerable uncertainty for the telecommunications sector," the
report states. "This will enable greater competition, and therefore a reduction in
prices, improved quality of services, and greater consumer choice."
Already 20% of Australians rely on a mobile-only broadband service, data from 2016 shows, but this percentage is expected to rise again when 5G internet
becomes available, in a move that could snatch customers from the NBN and
contribute to the uncertainty around the largest infrastructure project in
What 5G will need to overcome
Mobile 5G connections will need to offer large data quotas at comparable prices if they're to become a substitute for fixed-line internet. Most Australians will use 285 gigabytes (GB) of data per month in five
years' time, according to estimates by NbnTM. Mobile data allowances will have
to hold their significant growth rate if they are to compete.
"There are signs that the growth in mobile quotas may be capable in
catching up to this rising demand," says the report. "Average mobile quotas
have grown by about 60% from 2012–13 to 2015–16.
"Should quotas sustain this growth rate, the average mobile plan may be
able to satisfy the median Australian download demand within the decade."
Only a handful of mobile internet plans offer data allowances of 95GB a
month, which the ACCC claims would meet the needs of half of the three
million customers currently connected to the NBN.
Australia currently has faster mobile internet than it does fixed line
broadband. Akamai's annual State of the internet report for 2017 ranked Australia 50th globally for internet speeds, with mobile connections
averaging 15.7Mbps and fixed connections averaging 11.1Mbps.
Consumer redress is wanting when it comes to the NBN
The number of people relying on mobile internet in the near future – or a combination of mobile and fixed internet, by using hybrid modems
that take a SIM card – will depend on how well NbnTM tends to the problems
currently undermining its network.
Earlier this month, the Telecommunications Industry Ombudsman (TIO)
revealed complaints regarding the NBN surged 159% to 27,195, for the
year ending June 2017. People complained most about connection delays, an issue the ACCC says leaves customers with little options for redress.
Then there's the advertising practices inherent to the broadband industry,
which markets the maximum speed of a service. But these speeds are
theoretical and can't be achieved in the real world.
"Advertising by RSPs [retail service providers] and consumer understanding
of new broadband plans as the rollout of the NBN progresses remains a
problem," says the ACCC.
Broadband providers were given three months to begin advertising plans with
minimum speeds, chair Rod Sims told CHOICE in August. The move was part of
the watchdog's revised industry guidance communication providers were told to adopt, and if they didn't they would be exposed to a public shaming, the prospect of government
regulation and court action.
Failing to address the issues with the NBN could result in taxpayers
covering the cost of the $49 billion network, chair Sims warns.
"In the medium term, if these issues persist, despite improved advertising
and pricing, the government should consider whether NBN Co [NbnTM] should continue
to be obliged to recover its full cost of investment through its prices."