NBN should not be protected from 5G competition: Sims

Consumers will see the benefit of NBN facing competition from high-speed 5G mobile networks, Rod Sims has said.

The National Broadband Network (NBN) should not be protected from competition stemming from the high-speed 5G mobile networks being deployed, Australian Competition and Consumer Commission (ACCC) Chair Rod Sims has said.

Speaking at the Australian Communications and Media Authority (ACMA)'s RadComms 2018 conference in Sydney on Tuesday afternoon, Sims noted Verizon's launch of a 5G home broadband service in the US, saying it is "terrific" that NBN is facing competition from 5G.

"What we must never do ... is seek to restrain others in order to protect the NBN business model. This would be a disaster for consumers," Sims said, adding that history is littered with examples of the government trying to recover sunk investments by protecting them from competition.

As the NBN is a monopoly wholesale network, the ACCC should strongly welcome it facing competition from 5G, Sims -- whose term as ACCC chair was last week extended out to 2022 -- added.

"We are currently seeing some operators offering consumers hybrid modems with their NBN connection, where data traffic can be directed over the mobile network rather than the NBN. This is just a small step towards operators favouring their own mobile networks over the NBN, but will we see it go further?" Sims said.

"We have long heard providers complain about low margins on the NBN, which is largely due to the variable costs of provisioning capacity to support high speeds and growing data traffic.

"So for those RSPs with an alternative mobile or wireless network, it may be more cost effective to offload some fixed NBN data traffic onto their own network where consumers have a hybrid modem or seek to supply some services entirely over their own mobile network, completely bypassing the NBN."

As carriers move into 5G, they will need to densify their networks, particularly in populated areas, which may push more network sharing, he said, referring back to the ACCC's decision last year not to declare wholesale mobile domestic roaming.

"An agreement between competitors to share networks -- separate to a formal merger -- rather than compete to build them does have potential competition implications. However, we are also aware of the potential benefits of this from an efficiency perspective," Sims said.

"We want to ensure that any network sharing happens in a way that enables operators to continue to differentiate between services, quality, and products. Likewise, we want to ensure there are equal incentives on operators to invest in the network infrastructure."

Calling the proposed TPG-Vodafone Australia merger "interesting", Sims said the ACCC will be making its decision on whether to allow the transaction to occur by comparing the world with and without the merger, as well as whether consumers will be likely to pay more or get lower quality services.

Sims last week told Senate Estimates that while allowing Vodafone and TPG to jointly bid for 5G spectrum would reduce competition during the auction, it will have the opposite effect for the telecommunications market, repeating previous arguments that the government should be less concerned about making money from spectrum and more concerned about providing the best value for consumers.

"Our view at the ACCC has always been we're not so much concerned with the money raised from spectrum; we just want to make sure the spectrum can go to players so that they can operate in the market and be competitive in the market," Sims said last week.

"We don't see that there's any lessening of competition through Vodafone and TPG bidding for spectrum together, because once they've got that joint spectrum, they can participate individually in the marketplace."

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