Telstra says 5G will not supersede NBN

Simone Ziaziaris
(Australian Associated Press)

 

Telstra boss Andy Penn expects many of the telco’s customers to switch over to mobile from fixed broadband services when its 5G network is launched, but says it will not supersede the national broadband network.

Speaking at a business briefing in Sydney, Mr Penn said a 5G mobile network will not be able to achieve the same level of capacity as the fixed line network due to cost restraints.

About three gigabytes of data is downloaded over a mobile device in Australia per month, on average, compared to 150 gigabytes downloaded over fixed broadband, he said.

“It is true to say 5G will be very fast but to achieve the same level of capacity on mobile as fixed will be very expensive,” Mr Penn said.

“Yes, 5G will definitely enable many customers to switch to mobile in preference to a fixed broadband service at home. But no, 5G will not completely replace the NBN.”

Customers increasingly want their mobile network to be a sole source of internet, but a “very, very significant” investment would be needed to carry the same amount of data on a national mobile network that is currently carried on a fixed network, Mr Penn added.

His comments come a day after NBN Co, the company tasked with building the network, said it will suspend the rollout of the hybrid coaxial-fibre (HFC) network for six to nine months, in order to improve connections and reliability.

Telstra shares fell following the announcement on Monday, amid concerns the delay to expected payments from NBN Co to Telstra could impact the telco’s earnings.

The shares fell further on Tuesday, dropping six cents, or 1.7 per cent, to a seven-week low of $3.40.

Mr Penn said the company was working through the financial implications and would update investors in the coming days.

But he said there will be no long-term change to the financial arrangements between Telstra and NBN Co.

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