NBN vs 5G – The Ultimate Broadband War

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The National Broadband Network is being put to the test by mobile technology ‘5G’ as the Australian telcos offer customs 5G powered alternatives to the NBN.

NBN Co announced a $3.5 billion fibre upgrade plan this week, which has started to heat things up. Telstra, TPG and Optus are confident that they can use 5G technology to pull away from a large percentage of homes from the NBN. 

How large of a percentage they can take comes down to the price they will be charging. Not only the price for the 5G services but also the sourly contested wholesale prices which the telcos will have to pay NBN Co for reselling their NBN plans.

NBN critics have been begging for fixed wireless broadband which is delivered through signals from mobile towers straight to homes as a possible alternative. The local telcos have proven that it is possible within lab conditions, and are ready to see just how possible it really is.

Telstra’s peak download speed this week was 4.2 gigabits per second (Gbps), which is 4x faster than the quickest NBN plan that is currently available.

Credit: Pixabay

This was made possible through 5G technology.

On the other hand, Optus is ready to launch two 5G wireless services which they will charge $75 per month and $90 per month that should be able to go head-to-head with the fixed-line NBN plans available.

The $75 plan supposedly reaches a maximum download speed of 100 Mbps and hits an average download speed of 85Mbps during the busiest times of 7 pm-11 pm.

The $90 plan “currently delivers average download speed of 214Mbps (between 7 pm-11 pm)” Optus representatives said. 

With NBN’s rollout now 99% complete, around 90% of homes currently connected to the network are on 50Mbps plans, which is much slower than the proposed Optus plans.

Most homes connected to these NBN plans have been hesitant on signing up to the faster 100Mbps plans, due to pricing or NBN’s technical limits.

Nikos Katinakis, the head of networks at Telstra, believes that 5G fixed-wireless services can challenge NBN in terms of quality and speed, but there’s one main issue.

“From a mobile perspective, 2021 will be a year of choice because every smartphone maker will have a 5G handset out in the market….and if the devices are there we need to have the network ready as well,” Katinakis said.

“On the fixed-wireless side, Optus has already launched and we have publicly said we are going to have an offer out in the market, but it’s not going to be a wholesale replacement of the NBN.” 

On average, data consumed by NBN users is between 250 and 300 gigabytes (GB) per month, which is much larger than the 16-20GB average of data used by mobile networks per month. 

Credit: Pixabay

Despite this, NBN’s erratic performance gives Telstra and other competitors a window of opportunity. 

“There are cases where NBN customers aren’t getting the best experience and here 5G can potentially offer an alternative… 5G will be [the] first time when we truly concentrate on fixed-wireless but we will be very targeted about who we think is the right customer for it,” Katinakis says.

If you are only getting 12Mbps service from NBN currently, Telstra is confident they can give you a better service through 5G, with competitive pricing to boot

Telecom analyst Ian Martin believes there is a growing percentage of homes which will decide against connecting to NBN. While we are at 20% at the moment, it could very realistically grow to 30% over the next three years.

While most people will continue to use the fixed fibre network, there should be enough willing to leave that would impact NBN’s inevitable penetration rate. After a year to a year and a half, Optus has about 5% of the broadband market connected to 5G. It should easily double over the next three years, with Telstra and TPG also breathing down their necks.

While we cannot say how much of an impact 5G will have on NBN’s market share.

If a competitive price at a similar amount of data is offered we could realistically see a broadband war.