Telstra lays down 5G gauntlet for NBN Co with fixed-wireless product

Telstra is about to launch a 5G fixed-wireless product to directly compete against the NBN, getting the ball rolling on selectively using its 5G mobile network to try and steal customers away from the $57 billion fixed-line network.

With Telstra and its peers locked in a tussle with NBN Co over the high wholesale prices charged by the company in charge of the national broadband network, the launch of the ‘5G Home Internet’ product sets the scene for Telstra to keep more money in its pocket by bypassing the NBN.

The telcos can avoid paying the wholesale price to NBN by connecting a home directly to their 5G fixed-wireless services, which offer high-speed plans at prices comparable to existing NBN plans.

Telstra chief executive Andrew Penn will hope the service will attract customers struggling with poor NBN reception and download speeds.
Telstra chief executive Andrew Penn will hope the service will attract customers struggling with poor NBN reception and download speeds.Credit:Tash Sorensen

The 5G service, to be launched on Wednesday, is priced at $85 a month and will offer 500GB of data to eligible customers. Telstra said it expects customers to achieve typical download speeds between 50Mbps (Megabits per second) and 300Mbps.


Michele Garra, the head of Telstra’s Connected Home and Business unit, said the service can offer a viable alternative to many homes struggling with poor NBN connections.

“We will be targeting customers that are having the poorest experience today, those that are being constrained by the technology (used to deliver broadband) whether its legacy ADSL or the NBN,” she said.

“We are also looking at customers that have the highest need to come through our service channels, those having a lot of faults and outages.”

Optus already has a 5G fixed-wireless service in the market and is planning to launch two new high-speed plans, priced at $75 a month and $90 a month respectively, later this year.

However, Telstra has had to tread that ground more carefully because of a non-compete agreement signed between the telco and NBN Co. Under the terms of the agreement, Telstra would lose the one-off payments that it receives from NBN Co for customers moving from their existing connections to the NBN if it goes toe-to-toe against the NBN.

From fiscal 2012 to fiscal 2020, Telstra has earned $8.9 billion in NBN one-off payments.

A source close to the matter told The Age and The Sydney Morning Herald that Telstra does have some wriggle room under the agreement, which does allow Telstra to respond to changes in the mobile market, in particular the move by Optus to have a number of 5G fixed-wireless plans out by the end of 2020.

Telstra is also not pitching its 5G service as a wholesale replacement for NBN, given the highly selective availability of the plan.

While the 5G service will be highly targeted, Ms Garra said the footprint of the service can be expanded quickly.

“Over the next 12 months, we’ll be scaling up so more people can get in on the action, especially as 5G continues to evolve and when millimetre wave (mmWave) spectrum is available.”

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