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Current NBN bundles expected to drive demand for 5G alternatives

Current NBN bundles expected to drive demand for 5G alternatives

The Commission also saw network sharing as having the potential for collusion risks

Credit: ID 128097572 © Jarretera | Dreamstime.com

If the current pricing and quality of home National Broadband Network (NBN) bundles remain unchanged by the time Australia’s 5G networks finish getting rolled out, they could actually help to drive demand for 5G alternatives, the Australian Competition and Consumer Commission (ACCC) has predicted.

Outlined in its submission into the Federal Government’s 5G inquiry, the ACCC considers 5G networks as having the potential to able to provide services beyond just mobile broadband applications, but the benefits in the short- to medium-term would affect those who primarily provide 5G network services.

After its implementation, an increase of demand for data is expected to drive networks to upgrade 5G further, dropping costs and increasing capacity in the process.

The ACCC stated the fact that 5G networks will be able to deliver gigabit wireless broadband speeds, and in combination with the potential increased capacity, will be able to match and even surpass the NBN in regards to home broadband.

“This will also be driven from the demand-side with the performance of NBN services in terms of price and quality having a significant impact on the degree of substitution sought by consumers,” the submission stated.

To get to this point, the ACCC claimed that having access to spectrum is an essential for telecommunication companies.

“Both the amount of spectrum held by an operator and what bands it is in are determinative factors in the price, quality and coverage of the services of a mobile network operator (MNO) and, as such, a critical driver of competition in the downstream markets,” the ACCC’s submission read.

“5G will need a diverse range of spectrum to support its different use cases: low, high, and very high band frequencies to provide coverage, high speeds, low latency and to carry large amounts of data along the network.”

The ACCC also said that both the quantity of spectrum and the bands held by operators are influential when determining price, quality and coverage, and therefore are significant when it comes to competitions in downstream markets.

This is due to spectrum creating a high barrier to entry, different MNOs having different costs when rolling out and expanding networks and larger businesses with more spectrum could influence the market, causing smaller businesses to catch up to them.

“The ACCC would be concerned if lack of low-band spectrum (under 1 GHz) would mean that some operators were not able to shut down 3G services and move to 4G and 5G services as quickly as competitors,” the submission noted.

“Less efficient networks are a significant competitive and cost disadvantage to operators. For this reason, the ACCC considers that release of more low-band spectrum needs to be prioritised to ensure that Australians secure the benefits of 5G in a timely way.”

The implementation of small cells is expected to shake up regulatory considerations, as it differs to the typical network topology used for the deployment of the current mobile network; it is likely to be deployed on smaller infrastructure, closer to the ground and indoors.

The deployment in cities and higher density areas however is also expected to need dense fibre networks for backhaul. As a result, the ACCC will be assessing its regulatory settings against these new types of deployment.

To meet the requirement for increased network density, the submission outline network sharing as an option, which can create cost savings and efficiencies, but also has the potential for competition issues like collusion risks and reduced or distorted incentives for investment in shared infrastructure.

Mentioned as one of the final points in the ACCC’s submission was the “community anxiety” about 5G and health impacts.

“The ACCC considers that the mobiles industry and government have an important role to play in engaging with communities regarding these concerns,” the submission noted.

“A proactive approach will assist in ensuring that network deployments necessary to provide the benefits of 5G do not meet significant opposition and that community anxiety is lessened.”


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