Telstra Release New 5G Plans As CEO Battles It Out With NBN
Telstra has announced its new mobile plans with 5G today, as it continues to battle it out with the NBN while also trying to spruik a 5G network that’s impossible to find in the Sydney CBD or metro areas where Telstra claims there are 5G towers.
Telstra is claiming that their 5G service is expected to deliver speeds of 2 gigabits-per-second to mobile phones, or even higher, but our tests using two of the latest 5G smartphones from Samsung and LG have only found its speed to be similar to current 4G speeds which is in the sub 400Mbps range.
At the same time the battle between Telstra and the NBN has intensified as Telstra Boss Andy Penn looks for ways to cut costs and deflect the decline in Telstra revenues away from him as he moves to sack more than 9,000 employees while looking to get the NBN to slash the price of wholesale NBN rates.
A recent Telsyte 2019 Australian Mobile Services Market Study found that slower-than-advertised download speeds aren’t going to get in the way of Australians adopting 5G mobile phones.
The Company behind the report claims that they conducted interviews with 1025 Australians over the age of 16, and found that one in four of them have been delaying an upgrade to their mobile phone, so they could move to 5G when it becomes available, a move that could impact the NBN if these consumers also move to 5G routers in their own homes.
It’s also claimed that where it took 4G about five years to reach 15 million “Services in Operation” (SIOs), 5G should get there in just four years, the Telsyte study found.
This is despite 5G smartphones costing almost triple the cost of what 4G smartphones cost when they were first rolled out in 2005.
Last week Penn warned the latest consultation process with the NBN was unlikely to deliver the required cuts in wholesale prices charged by the company for broadband services with new 5G packages set to be significantly faster than what NBN is currently delivering to homes in Australia.
While Mr Penn has welcomed a review of the pricing structure, he told The Australian that tinkering around the edges was unlikely to take the pressure off the retail service providers.
“It’s fantastic that NBN Co is reviewing the structure and we welcome that but the only caution I would have is that wholesale prices don’t need to come down by $2 but by about $20,” he said.
Last week the NBN week started discussions with the telco industry to make broadband more affordable for consumers. Chief customer officer Brad Whitcomb said the company was looking to find the sweet spot between meeting its economic targets and giving telcos and consumers better value.
It has also left the door open to tweaking the plans available for the NBN, potentially looking to introduce plans with lower upload speeds.
“Telsyte research shows each year around 15 to 20 per cent of mobile services subscribers would change their provider. 5G is expected to be one of the main churn factors beyond 2019,” said Alvin Lee, Telsyte’s senior analyst.
The fast uptake of 5G, which Telsyte expects will be almost four times more popular in its first year than 4G was, will be despite Telstra’s 5G network quite literally getting off to a slow start.
What Lee has failed to explain is that when 4G was launched consumers were migrating to a new generation of smartphones including a brand-new iPhone and new Android devices.
This is not the case now with most consumers owning a smartphone. The smartphone tail wind that pushed 4G adoption along is not there in 2019 as smartphones sales have peaked and consumers are not convinced that they need to move to 5G which at this stage is significantly more expensive than 4G and questions are being raised about what the speed bump actually delivers.
“5G is certainly not an essential upgrade right now, and it might be a while before we see enough 5G coverage to make it a serious part of someone’s buying considerations,” Joe Hanlon, publisher of the phone comparison website WhistleOut told the Financial Review.
Telstra chief executive Andy Penn insists 5G will get there.
Telstra intends to charge $15 a month for 5G access, on top of regular network charges, when it launches its mobile plans later today. This is what we tipped a week ago.
The fee will be waived for the first 12 months of the service, while 5G network coverage is still being rolled out.