Telstra distances 5G fixed wireless from being an NBN 'replacement'

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Telstra distances 5G fixed wireless from being an NBN 'replacement'

But says it could be useful for people on NBN FTTN or wireless.

Telstra has categorically distanced its 5G fixed wireless service from being an NBN "replacement", positioning it instead as an "alternative" for certain users in the NBN fibre-to-the-node (FTTN) and fixed wireless footprints.

The timing of the commentary coincides with calls by NBN Co aimed at the government to reconsider whether the broadband tax should apply to cellular fixed wireless services, as some are marketed as NBN-equivalent alternatives.

NBN Co has spent much of the year positioning commercial 5G as a competitive offering, something that could draw government and regulatory scrutiny if that position became broadly accepted.

So far, the government and regulators have resisted, arguing that 5G fixed wireless services cannot compete with regular fixed services when it comes to quotas, even if the speeds are similar or better.

Telstra’s group executive for networks and IT Nikos Katinakis made it clear that Telstra did not want to position its 5G fixed wireless service as a “replacement” for NBN.

“Let me answer a question that I know you have: Is 5G fixed wireless a replacement for NBN? The answer to that is no,” Katinakis told an investor day.

“The average consumption of a fixed customer is now in the 300GB range a month, mostly between 8pm and 10pm. The average wireless customer is in the 15-18GB per month range, and it is spread almost across a 14 hour window with two peaks - 8-9am, and 4-6pm. 

“Putting 25 times more demand onto the [5G] network is just not feasible at this point, but it is definitely feasible to offer a fixed wireless access service to the subset of our customers that just don’t get a good enough fixed broadband service.”

Katinakis offered a description of the NBN customers that might benefit from switching to 5G fixed wireless, and therefore would be in Telstra’s target market.

“Either they’re stuck using copper or they’re in a super long loop of coax cable ending up with 12-25-50Mbps,” he said.

“For those customers there is an alternative, and we have started offering that alternative.”

Telstra CEO Andrew Penn offered some additional commentary on target user bases.

“There are certain customers for whatever reason they may be using a copper lead-in on a FTTN or they may be in 4G fixed wireless on an NBN service where a 5G fixed wireless solution could actually offer them a better experience for a similar price,” Penn said.

“That’s basically the focus that we have.”

Penn said that 5G fixed wireless is “not suitable necessarily in every situation”.

Product and technology group executive Kim Krogh Andersen said Telstra estimated that “10 to 15 percent of the broadband market can benefit from fixed wireless access.”

“We have never seen it as something to compete with NBN,” he said.

5G fixed wireless services are viewed in some parts of the market as a place to shift NBN customers, with the promise of better margins for the telco by having those customers on-net instead of on resold NBN infrastructure, where margins have historically been tight to negligible.

TPG Telecom, for example, estimated earlier this year that it could save around $50 million a year for every 100,000 customers it could entice off the NBN and onto its own network infrastructure.

“Of course the margin is different when you move to our own infrastructure versus being a reseller of NBN, [but] we are not approaching it from that point of view,” Andersen said of Telstra’s own 5G fixed wireless.

“[We want] to ensure the customer has the best possible and most suitable technology to enable their connected home experience.”

Andersen added: “The 5G home broadband is a good experience, but NBN is also a good experience. 

“We just always ensure that we pick the right technology for our customers. 

“That is our guiding principle … and priority.”

Telstra expanded the availability of its 5G fixed wireless services earlier this month, though noted that a limited number of services would be allowed to run in each postcode to maintain service quality.

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