Friday, 19 October 2018 06:22

S&P says 5G no magic bullet to solve telcos' NBN issues Featured

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S&P says 5G no magic bullet to solve telcos' NBN issues Courtesy NBN Co

The advent of 5G networks will not provide any kind of salvation for telecommunications providers who are desperate for some way of fighting back against the unreasonably high prices charged by NBN Co, a report from the credit ratings agency S&P Global Ratings says.

The Australian  reported on Friday that major operators were looking to bypass the national broadband network and though 5G deployment would be expensive, they had no option but to do so given the prices charged by the NBN Co.

In July, S&P issued a study that said the NBN would be unable to return a profit and predicted a writedown of the network, a subject that the Labor Party has also broached recently.

Shadow Communications Minister Michelle Rowland said earlier this week that the party was not ruling out the option of writing down the value of the NBN.

“We do not expect 5G fixed broadband networks to completely supplant the NBN in the near to medium term, given the heavy capital spending requirements and stretched financial position of some players,” S&P said.

“Still, over the longer run we expect technological advances, regulatory distortions and high mobile network investment to slowly tilt the balance in favour of 5G wireless broadband services.”

The report also quoted S&P analyst Graeme Ferguson as saying that the NBN had reshaped the incentive structure of the entire industry.

"With the telcos having to spend more money into 5G, there is really no money for them in fixed broadband on the NBN,” he said. “It’s still important for the telcos to stay in the fixed market and there will be a role for fixed services, but the ultimate prize is NBN bypass.”

ISPs, on the whole, have been unable to provide higher-speed NBN plans due to the cost of CVC. When iTWire asked some providers about this last week, they were mostly at one on this issue.

Only one company, the Launceston-based Launtel, has dipped its foot into providing gigabit connections, and that too only in Tasmania.

The other company to provide such connections, MyRepublic, did so during a trial in Wollongong a year ago. About 100 people continue to use the connections which cost $129.95 a month.

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Sam Varghese

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Sam Varghese has been writing for iTWire since 2006, a year after the site came into existence. For nearly a decade thereafter, he wrote mostly about free and open source software, based on his own use of this genre of software. Since May 2016, he has been writing across many areas of technology. He has been a journalist for nearly 40 years in India (Indian Express and Deccan Herald), the UAE (Khaleej Times) and Australia (Daily Commercial News (now defunct) and The Age). His personal blog is titled Irregular Expression.

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