What does 5G mean for the nbn?

The rollout of 5G networks in Australia is set to impact the nbn, but the Australian Competition and Consumer Commission (ACCC) has highlighted the importance of promoting competition.

In a speech delivered at RadComms 2018, ACCC Chair Rod Sims said 5G networks will be able to offer fibre-like speeds and high data capacity without the restrictions of fixed-line infrastructure, and they may become a viable substitute for fixed broadband.

While this will provide Australian consumers with a greater choice of services and suppliers, it may bring with it competition issues between mobile networks and the nbn. Describing the nbn as “a monopoly wholesale network”, Sims warned against protecting the nbn from competitive pressure from 5G, stating “this would be a disaster for consumers”.

Thousands of interconnected devices are likely to come online in the next few years, and although 5G networks and compatible devices are not expected to become commercially available until around 2020, Sims suggested the industry needs to make sure networks are ready to support this transition.

“We know that 5G is going to lower the cost of delivering data, but those changes will be accompanied by large capital and operating costs; operators will need to acquire new spectrum, densify their networks by building more mobile towers and make sure their transmission can support delivery of new services,” Sims said. “Competition will drive this investment. It can be the catalyst for innovation and can see operators build wider, better networks, to provide higher quality services.”

Network sharing

In the transition into a 5G world, there is a need to densify networks in highly populated areas. Active network sharing — which involves sharing the radio access network (RAN) itself, including the spectrum — may help reduce maintenance and investment costs and lower barriers to entry. Sims said there is a risk that services are not differentiated, but he thought it was unlikely that RAN sharing would be seen in Australia to any great extent.

Regardless, the ACCC examines proposals for active network sharing to ensure consumers benefit. He noted TPG and VHA’s joint venture agreement to bid in the 3.6 GHz spectrum auction set to take place later this month, separate to the proposed merger between the two companies.

“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.

“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.”

Sims concluded that 5G could be disruptive, but we will not fully know what 5G means for the nbn until its widespread rollout.

For a full copy of his speech, click here.

Image credit: ©stock.adobe.com/au/sdecoret

Originally published here.