Telstra ’s 5G Pricing Nightmare

Telstra 5G

Up to now telecommunications companies, including Telstra, have gained considerably from data hungry customers. Because of the spike in data demand the high price charged to customers has enabled them to offer a number of cheap add-ons to plans. These either cost nothing at all, like standard national calling minutes and unlimited texts, or are offered at minimal cost, such as viewing sports and movies and streaming music.

However, changes are always just around the corner with telecommunications. This can confuse customers and cause disarray, while at the same time, the telcos are trying to sort out how they are going to price the next development. What’s being rolled out very soon is 5G. Telstra will be the 1st telco to do this, but it has not revealed how much it will cost.

No pricing revealed for 5G

Andy Volard, Telstra’s director of devices, said that the telco’s plan currently is to continue to keep an eye on data, while keeping customers informed with the usual usage alerts so that data usage trends can be monitored. It is also going to regularly update the amount of data it offers with its plans.

Volard can see there is going to be considerable competition in the future, which he recently revealed at the Gigabit LTE meeting recently held in Sydney. He emphasised the importance of keeping on top of customers’ requirements and usage patterns.

More gigabite speeds expected

The soon to be launched 4G network 1Gbps in Melbourne, Sydney and Brisbane and the recent announcement of the 1Gbps/150Mbps mobile router will see an increase in data usage by users. This is all part of an initiative between Telstra and its partners, Netgear, Qualcomm and Ericsson. There still hasn’t been any indication of the charges that are likely to be placed on the post paid plans or the router.

As with any new initiative Volard said estimates have to be made about the reactions of the user and the amount of data that they are likely to use. The aim is to match the speed that customers will be seeking. Peter Carson senior director of Qualcomm’s Product Marketing stated that a business model was soon to be drawn up and published. He said that The IoT will offer new players the chance to gain financially from this new connectivity thus heightening the competition between the bigger telcos.

Pricing is also expected to match the expected increase in the use of IoT devices that users will want to connect. The expectation is that there will be a huge number of devices and these will be the ones that will be providing the most revenue. One of the reasons for making investments such as into gigabit LTE is because business models are difficult to assess for the future.

Carson also said that Telstra and other companies will now be able to get more network devices connected which will offer a better future economically for both the carriers and the vendors. Also, the forecast is that there will be a growth in bandwidth requirements and over time there will be economic benefits as more and more devices come into use.

These statements by both Volard and Carson came after Kevin Bloch, CEO of Cisco Australia, back in November revealed that telcos may not necessarily be the only ones to benefit from IoT and the connecting up of the forecasted 50 billion devices , because of the interest in using unlicensed spectrum coming from the National Narrowband Network Company (NNN Co).

Bloch said that the whole wireless world is disintegrating and, from this, 2 streams will become evident which will be both a licensed and an unlicensed spectrum. NNN Co is has already begun to use a LoRa-based technology that allows lower powered connection over longer distance using unlicensed space. This is all to do with the Internet of Things. The profit from these new developments is expected to occur for networking companies and not telcos according to New Street Research.

One of the partners for New Street Research, Andrew Entwhistle, has reported that the Internet of Things is going to be of particular interest to vendors and equipment makers, policy makers, to systems integrators and to people who are concerned with how communications affect the ordinary social role in our lives. The main implication of the expansion of the Internet of Things is that it doesn’t seem likely it will be of any benefit to the main 3 telcos.

Summary

There is no doubt that as speeds for data increase more people will want to use their devices more, but there is not at this stage any indication as to how the pricing is going to go with the next round of new developments and 5G is all part of the next series of roll-outs.

 

Neil Aitken

Having worked in 3 countries for 4 telcos on both voice and data products, Neil is in a position to give you the inside track. Get beyond the marketing messages to the best plan for you.