Telstra 'can't foresee' its plans for 5G, IoT data usage and pricing

Telstra's plan for the upcoming explosion in data usage is to simply continue monitoring and alerting customers, and updating its data caps accordingly, its head of Devices has said.

Telstra has said that it cannot foresee the amount of data that will be used once the Internet of Things (IoT) and 5G are mainstream, and therefore cannot reveal a pricing structure on how to charge for increased data usage.

While companies like Cisco have made attempts to forecast the usage of data through to 2020, Telstra director of Devices Andy Volard said that the telecommunications provider's plan is to simply continue monitoring data and providing customers with usage alerts in order to keep track of data trends, and regularly update how much data it provides under its plans.

"It will be a really competitive landscape. I can't tell where we're going, I can't foresee where we'll end up going," Volard said at the Gigabit LTE event in Sydney on Tuesday afternoon.

"We will have to be absolutely aware of what our customer needs and what their usage patterns look like.

"I suspect we'll end up constantly reviewing what it is we need to do to support our customers."

Upon the launch of its 1Gbps 4G network in Sydney, Melbourne, and Brisbane and the announcement of its 1Gbps/150Mbps mobile router in partnership with Ericsson, Netgear, and Qualcomm -- which will itself lead to increased data usage by consumers -- Volard noted that many more devices this year will be capable of gigabit speeds.

However, the head of Devices refused to disclose how much data and for what price the router's post-paid plans, to be launched next month, will involve.

"We constantly think about what it is our customers are going to use ... we're thinking deeply about what the user experience will end up being, and how much data a customer will end up using -- hence the reason why we've worked so very closely with Netgear and also a number of other providers on live data usage," Volard said.

"The question is: When you get the information, what will you then end up doing with it? And I think that customers will learn and we will learn what they need as well, and how quickly they're running through their data, and help provide for that in the future. We'll always take that feedback. That's why we have the data usage meter."

While Qualcomm senior director of Product Marketing Peter Carson agreed that it is too soon to have a fully formed business model, he also pointed out that IoT will open up connectivity revenue streams to new players, and more competition for telcos that have traditionally held on to the market.

Carson added that pricing models will need to be changed for the influx of connected IoT devices.

"Everybody's seen these shifts in the business case for IoT-type devices, so you're going to see a lot of innovation in terms of the business model, pricing models, around the IoT applications," Carson said.

"We're talking massive numbers of devices that in the long run might be the dominant revenue streams, and open up whole new revenue streams for new players in the industry that basically feed off the network and look for ways to leverage the economics of these technologies that we're laying the pipe for today.

"Part of the reason why we make these forward-looking investments in technology like gigabit LTE is because we don't know what the future business models, the future applications, are going to be."

Carson commented that for now, companies like Telstra can aim to achieve higher penetration of network devices, which will ensure a better economic future for carriers and vendors.

"We just know that the bandwidth requirements grow, and the economic benefits do accrue over time as you get to higher penetrations of devices with these technologies," he said.

The admissions by Carson and Volard followed statements by Cisco Australia CTO Kevin Bloch in November, who said that telcos would not necessarily benefit the most from IoT and connecting the 50 billion devices forecast, because there is a strong advocacy for the use of unlicensed spectrum from the National Narrowband Network Company (NNN Co) and others.

"The world in wireless is breaking up into two sort of streams -- one is the licensed spectrum," Bloch said.

"But then you've got the other world of unlicensed spectrum. It's called low-power, wide-area, where in the unlicensed spectrum, anybody can play.

"Our partner NNN Co is already deploying a LoRa-based technology to connect in the unlicensed space over longer distance, I'm talking 10, 20 kilometres, with much lower power. This new world of connectivity [is] opening up because of the Internet of Things."

Similarly, research firm New Street Research last year said that while the IoT will bring in profit for vendors and networking companies, it won't be a viable source of revenue for telcos.

"I'm perfectly prepared to accept that the Internet of Things is extraordinarily interesting to equipment makers and vendors, to systems integrators, to policy makers, and to people concerned with the social role of communications services in our lives, but there is an awful lot of noise about the Internet of Things that doesn't actually translate into, to put it strongly, a whole hell of beans for the telecoms operator who's looking to sell services to achieve revenue per customer or revenue per device," Andrew Entwistle, New Street Research partner, said in June.

"I can't see any business case for a telecoms operator."