Telstra Boss Cuddles Up To Questionable 5G Chinese Phone Brand
His shares are being battered because of poor results, but it has not stopped Telstra CEO Andy Penn from cuddling to a questionable Chinese brand that was earlier this year banned in the USA over security concerns and whose products were replaced at Telstra with products made by Alcatel.
Desperate to establish his 5G credentials Penn cuddled a 5G phone from ZTE whose products appear to be as much on the nose around the world as Huawei when he fronted a Telstra PR spin event aimed at spruiking the carriers 5G credentials.
At the event held in Sydney, he predicted that customers will pay a premium to connect to the Telstra 5G mobile network as the carrier who weeks ago was laying off 8,000 people has to recover a huge capital expenditure that the telco is devoting to the new technology which is still in it’s infancy and lacks a common standard.
Currently Telstra is struggling with falling average revenue per user (ARPU) and the emergence of 5G is heling the carrier gloss over other problems the carrier is facing.
The ZTE prototype demonstrated at the Telstra 5G event in Sydney was demonstrated via an internal 5G network the Company has set up to test new 5G technology from Ericsson and Qualcomm Technologies whose technology was chosen after the Federal Government moved to ban Chinese Company Huawei from being a 5G supplier to carriers.
Also shown off was a HTC 5G hub built in partnership with Telstra, this is a Taiwanese Company who are struggling to remain solvent in the smartphone market after the Company posted yet another loss last quarter.
HTC losses in the last quarter were over $100M in the third quarter, as investments in virtual reality gear and a blockchain phone had yet to start paying off for the company.
HTC has reported a string of losses in recent years, including a loss of A$88M in the prior quarter.
Telstra claims that tests of 5G in the US have taken place using shorter-range millimetre waves as commercial mid band frequencies used here are not licensed in the US. In contrast, Telstra’s frequencies are marginally higher than those it uses for 4G.
It says mid band frequencies can offer “sub 6Gbs” downloads.
But it acknowledges that the composition of its mid-band 5G offering will depend on the bandwidth auction where 125mHz of bandwidth was being released.
What Penn has not revealed is that not all of Australia will get 5G and that in some locations the roll out of 5G could take several years.
He said “The telco industry is at a tough stage in its cycle as most operators have fully rolled out 4G and competition on price has increased,” he said.
“This is exacerbated in Australia by where we are at in the rollout of the NBN and the significantly negative impact it is having on industry economics.
“Against this background, 5G heralds a new opportunity for growth, particularly for those that will be leaders in this new technology as indeed Telstra is.’’
Initially the phones available in Australia will be what’s called ‘non-stand-alone’ 5G devices. They will connect initially to the 4G network and from there be linked to the 5G network if they are 5G capable.
The problem is that users who buy a 5G smartphone will pay a premium price for a device that will primarily operate on the 4G network.
The downside is that users won’t get the benefit of the much lower latency — or lower network delay — that 5G offers beyond 4G.
The Australian newspaper said that features such as “5G network slicing” won’t be available either. This feature lets telcos dedicate parts of a 5G network to specific use cases such as connected cars or IoT devices.
Telstra says the chipsets needed for stand-alone 5G devices are not expected in market until the end of next year or early 2020.
“Late 2020 you’ll start to see stand-alone come into play,” a spokesman said. “There’s a lot of work to be done on the chipsets.”
Thereafter phones will support both stand-alone and non-stand-alone operation.
In an effort to give themselves 5G bragging rights The telco’s rollout of its 5G network began with 17 sites operational by September, 130 are installed now and it’s aiming at 200 base stations by year’s end.
Telstra says it is working with a range of device makers on 5G implementation. At this years CES show in Las Vegas several brands are set to show new 5G handsets.