Telecommunications is fast becoming the world’s most critical infrastructure

By: "Farm Tender" News
Ag Company News
Apr 26, 2018
504 views
Share

By Andrew Penn - Telstra CEO

With the world about to see an explosion in the number of connected devices and customers looking for ever-higher levels of service in their connected lives, telecommunications is becoming the world’s most critical infrastructure. Critical for every business, state and nation. At the same time in Australia the economics of our industry are changing. In this complex and fast-changing environment it is crucial we get the policy settings right to support growth, encourage innovation and investment, promote competition and improve the economics of the industry. Two dynamics are key in this – mobile technology and the road to 5G, and the National Broadband Network (nbn).

Mobile revolution

Firstly mobiles. 2018 will be a pivotal year for mobiles, a year when so many pieces of the 5G puzzle come together. We will see technical trials ramping up and the reality of 5G beginning to match the promise. We will see coalescence around 5G global technical standards with the 3GPP (global standards setting body) meeting on the Gold Coast in September that we are hosting.

5G will be transformative in a way no previous mobile generation has because of its combination of low latency, incredibly high data rates, huge growth in system capacity, edge compute, low device cost, and the ability to offer seamless, always-on connectivity through better integration with Wi-Fi and other networks. A recent report from HIS Economics estimated that by 2035, 5G would enable $12.3 trillion of global economic output, equivalent to total US consumer spending in 2016. The report also estimates the 5G value chain will support 22 million jobs by 2035.

5G leadership

Telstra is particularly proud of our leadership in mobile technology innovation. We were first in Australia to rollout 3G across the country, we were the first in Australia with 4G and we are again leading the way with 5G. In 2016 we staged Australia’s first 5G field trial with Ericsson in Melbourne. In 2017, again with Ericsson, we tested the world’s first 5G outdoor data call over 25GHz ‘mmWave’ spectrum. In February this year we launched our 5G Innovation Centre on the Gold Coast where technology companies from around the world are working with us to trial the latest generation of wireless technology on our network.

Last month we also created the first precinct of 5G-enabled Wi-Fi hotspots in the world. This made Telstra the first company in Australia to take 5G technology out of the lab and put it into the hands of customers at this busy time on the Gold Coast. While there are no 5G compatible commercial smartphones on the market yet, by connecting 5G backhaul and infrastructure in our Southport Exchange to multiple standard Wi-Fi access points, we have given people in the area a taste of what is to come. At the same time, we are generating real world traffic on our 5G infrastructure, helping us evaluate the technology. In another first, working with Ericsson and Intel we have used prototype 5G infrastructure and mobile connectivity over mmWave spectrum to put Australia’s first 5G connected car on the road.

5G will be critical for the world of the Internet of Things. A world where everything that can be connected will be connected. This is already having implications for network investment decisions and deployment in regional areas as the role of mobile networks moves beyond providing communications between people, to providing connectivity to millions of devices and objects.

World changing

The number of connected things is expected to exceed 20 billion worldwide by 2020 and this will transform every business, every service, every product and every aspect of our lives. Indeed it will herald the coming of the fourth industrial revolution where the physical world is connected and infused with intelligence. This will transform productivity, change the nature of work and lead to transformational customer experiences.

Network transition

While 2018 is going to be a milestone year for 5G, the quality of the underlying 4G service and how this integrates with 5G will also be critical in determining the overall mobile experience. That is why our focus continues to be ensuring we have the best mobile network in Australia regardless of which “G” it is. Last year, we were the first carrier in the world to deploy a 1 Gbps enabled LTE device in our mobile network and today 90% of our customers have access to double the original speed of 4G. A few weeks ago at Mobile World Congress in Barcelona we demonstrated 2 Gbps on 4G with Qualcomm and Ericsson and we are now looking to deploy this technology into our network.

NBN – the enduring value of fixed networks

The other major issue in Australia is the nbn, an infrastructure project of national importance. From a customer perspective what is important is that they have the best possible connectivity regardless of technology. Ultimately customers do not need to know or care whether that is delivered over the nbn, mobile, wifi or other form of technology – they just want it to work. It is therefore critical that all these services and solutions provide an outstanding customer experience. Moreover, from a technology point of view they are going to be increasingly integrated in the future through network function virtualisation.

One question I am often asked is whether 5G will supersede the nbn and render it redundant. The answer is clearly no. Fixed broadband networks in Australia today carry at least 50 times as much traffic as mobile networks. It is true more customers are choosing to opt for a mobile-only solution and that is only going to increase in the future. Indeed with the evolution of 5G we estimate more than one million more homes and businesses in Australia could choose to go to mobile-only. But that still leaves many customers for whom a fixed broadband service is going to continue to be the best possible solution. That is why it is so important we all support the nbn to be a success.

Prioritising the customer experience on nbn

While considerable progress has been made, there are still challenges with the nbn from a customer perspective and in particular with the service experience and affordability. The recent release of the Telecommunication Industry Ombudsman’s report highlighted the scope of the issue and urgency of working a solution. For the 6 month period which measured until the end of December last year nbn related complaints rose by more than 200% over the corresponding 2016 period.

This is an industry-wide issue with an onus on both nbn co and the Retail Service Providers (RSPs) to do better. One initiative in particular will be important which is to ensure that the service commitments from nbn co to the RSPs support more of the RSPs commitments to customers. Today this in not the case and it is important this is addressed. In this regard the ACCC’s current inquiry has been highly effective in getting all the relevant issues on to the table and we look forward to the introduction of regulated service standards from nbn to the industry.

On affordability, it is critical in the long term nbn wholesale prices are set at a level which ensures affordability of fixed broadband for all Australians. In the migration to the nbn, wholesale broadband prices have more than doubled and are set to increase even further. That increase has so far been absorbed by the RSPs but to the point where providing an nbn service is uneconomic for the industry. This is unsustainable and ultimately the model has to change otherwise it will lead to higher long term prices for customers. This is bad for nbn, bad for the industry but most of all it is bad for customers because it will impact affordability and Australia’s competitiveness. We have to do better than this if we are to create a country that is more digitally enabled and more digitally savvy. We need broadband that is fast, reliable, accessible and affordable regardless of the technology that it delivers.

World’s most critical infrastructure

Telecommunications is fast becoming the world’s most critical infrastructure. That is why Telstra’s vision is to become a world class technology company that empowers people to connect. This is not about moving away from being a telco, quite the contrary. It is about recognising what a telco of the future needs to be. We have always been at the forefront of technology innovation in our industry and we are committed to continue to lead. That is why we are building these capabilities and skills now. That is why we are investing for the future now and that is why we are committed to providing the best connectivity to Australia. We are at a pivotal time in our industry as we transition to the next generation of mobile technology 5G and as we migrate the nation to the nbn. We need to get this right for our customers and Australia.