Turnbull: Claims that 5G will replace NBN are 'probably overstated'

Responding to claims by Telstra CEO Andy Penn that 5G will erode NBN's user base, Australian Prime Minister Malcolm Turnbull has said the volume of data being downloaded over fixed broadband will prevent this.
Written by Corinne Reichert, Contributor

Australian Prime Minister Malcolm Turnbull has said the threat of 5G to the National Broadband Network (NBN) is likely overblown, as fixed-line broadband users are downloading such large volumes of data.

"Is there a threat from wireless services including 5G? Yes, there is at the margin," Turnbull said during an interview on 3AW on Thursday.

"But the amount of bandwidth that people are using, principally for video streaming, is so enormous and growing so fast, I think the ability of wireless networks to take over is probably overstated.

"But time will tell."

While the industry debates whether 5G will replace or complement the NBN, the broadband company's outgoing CEO Bill Morrow earlier this week ruled out the possibility of NBN providing 5G services after the company revealed it would be undertaking 5G trials this week in Melbourne with Ericsson.

"It's not an interest of NBN; our plate is full at the moment, and we have a clear remit to get this thing built by 2020, on time and on budget," Morrow told Senate Estimates on Tuesday.

"Right now I would rule it out, unless the government came back and asked us to provide something else."

NBN CTO Ray Owen had earlier discussed "claims made about how 5G will impact the fixed broadband market", but, like the prime minister, pointed to the data amounts being downloaded over fixed-line networks.

"We know that 5G will enable much faster speeds than 4G, but at NBN we also know better than anyone about how much data end users are consuming, and some of the challenges on putting that data capacity onto fixed-wireless network," Owen said.

"It is in this vein, we have a close interest in 5G for our fixed-wireless footprint in understanding the technology and economics of a 5G upgrade path."

Communications Minister cum Prime Minister Turnbull on Thursday also addressed the issue of selling the NBN, saying he cannot predict what it would be sold for.

"Let's just be very clear about this: I said when I became communications minister back in 2013, I said the Labor Party had wasted AU$20 billion on the NBN, which I don't think you can recover," Turnbull said.

"I'm not saying that [the government will drop AU$20 billion] ... Look, you're asking me what will the NBN be worth if it is sold in five or six years' time, I think. I can't forecast that.

"If it costs AU$50 billion, then I guess that would break even."

On the issue of rising consumer complaints on the NBN, Turnbull also pointed to a report from the Australian Competition and Consumer Commission (ACCC) published last month, which revealed that NBN retailers are delivering up to 90 percent of their speed tier promises during peak hours.

"I was talking to [ACCC chair] Rod Sims the other day and what he said to me was precisely what he said publicly; the ACCC ... they have got probes in a number of houses to assess what sort of performance people are actually getting on the NBN," the prime minister said.

"It has considerably improved because the NBN has made available, at the same cost, more bandwidth. That means more people are getting the speeds that they are paying for.

"Clearly, we want everyone to have a very good telecommunications ... satisfaction levels are improving and the good thing -- the thing that I'm particularly pleased about -- is that we're getting an improved performance appraisal from the ACCC. They're impartial."

The ACCC found that on download speeds, Optus is providing its customers with 80.7 percent of their maximum speeds during busy hours and 81.8 percent overall; Telstra is delivering 88.1 percent of maximum speeds during peak hours and 88.6 percent in total; iiNet is delivering 88.6 percent of maximum speeds in busy hours and 89.1 percent overall; and TPG scored highest, delivering 90.7 percent of the maximum download speeds to its customers in busy hours and 91.5 percent the rest of the time.

The percentages equate to retail service providers (RSPs) delivering download speeds of around 90Mbps on the 100Mbps tier; 45Mbps on the 50Mbps tier; and 22.5Mbps on the 25Mbps tier.

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