The looming rollout of 5G mobile networks should be embraced as a chance to improve telecommunications competition – including with the national broadband network (NBN) – according to the head of Australia’s consumer-competition watchdog.

The new technology will be “the first generation of mobile technology capable of delivering broadband services that are comparable to fixed services in terms of speed and capacity,” Australian Competition and Consumer Commission (ACCC) chairman Rod Sims told a gathering of industry executives at the recent ACMA RadComms 2018 event.

Ongoing issues with the cost of wholesale NBN services meant that for NBN retail service providers operating their own mobile networks – Telstra, TPG, and Optus most notably – “it may be more cost-effective to offload some fixed NBN data traffic onto their own network” using hybrid NBN/mobile modems.

“There is an opportunity for wireless operators to attract those consumers who don’t necessarily want the high speeds and unlimited data offered by fixed service providers,” he added.

Fixed-broadband replacement

The question of mobile broadband services competing with the NBN has lingered since the project’s inception nearly a decade ago, when 3G was the cutting-edge technology of the day.

Some believed 4G’s parallel evolution during the NBN rollout would make fixed broadband obsolete; indeed, in 2011 then opposition communications spokesperson Malcolm Turnbull warned that Telstra’s newly-launched NextG 4G mobile network would be “a real competitive force”.

That contention has been countered by many, and both telecommunications services have thrived in intervening years as overall data usage surged.

Recent projections from Cisco Systems suggest that average global Internet traffic per month will nearly triple between 2016 and 2021.

Mobile data will increase from 9.8 percent of all Internet traffic in 2016 to 20.5 percent by 2021, while fixed/wired usage will decline from 38 percent to 27 percent of all Internet traffic by 2021.

Claims of mobile broadband’s eventual dominance – revived as 5G nears its widespread rollout – have been limited by increasing mobile network congestion, limited speeds, inconsistent coverage, and usage limits just a fraction of those provided by fixed-broadband providers.

This month’s auctions of 5G-compatible 3.6GHz radiofrequency spectrum will create opportunities for mobile operators to build new networks, Sims said.

Proposals to share the cost of network-building – such as a joint bid between TPG and Vodafone Hutchison Australia (VHA) – would improve efficiency but “does have potential competition implications,” Sims noted.

NBN tries to maintain the gap

The threat posed by next-generation networks has put the emerging technologies on NBN’s radar, with the company’s newly released Annual Report 2018 noting their “market disruption”, and agreeing that “addressing network constraints in the face of wireless substitution and 4.9/5G evolution emerges as a central challenge.”

NBN “will continue to monitor market developments and will address competitive risks as they emerge,” the report notes.

Having recently announced that it is on track to complete its rollout by 2020, NBN has been reasserting its market position by restructuring wholesale prices and broadening its range of service options.

In October, for example, it debuted a 1Gbps/1Gbps Enterprise Ethernet broadband service designed to wean lucrative business customers away from existing providers of fibre broadband services.

The company has also been trumpeting a reduction in complaints about connections and service quality, particularly in the wake of ACCC criticism that saw NBN promise to pay for missed connection appointments.

Faster and easier connections of mobile services would fast-track many customers’ migration to those services as a first resort, but Sims warned that the need for competition meant industry and government should not intervene to reinforce NBN’s business.

“What we must never do is to seek to restrain others in order to protect the NBN business model. This would be a disaster for consumers.”