Hockey wrong on 4G, says analyst


news A senior telecommunications analyst who has previously praised the Coalition’s alternative NBN policy has heavily criticised Shadow Treasurer Joe Hockey over his claims that 4G mobile broadband could be “far superior” to the NBN’s fibre in some areas.

Hockey made the claims on ABC Radio last week. Following heavy criticism of the claims, the Shadow Treasurer clarified that he had not been speaking about the raw speed capacity of 4G mobile broadband (also known as LTE for the long-term evolution standard it uses), but rather other aspects such as value for money, convenience and nearness of availability and deployment.

However, according to Informa senior analyst Tony Brown, who has previously praised the Coalition’s NBN position under Shadow Communications Minister Malcolm Turnbull as getting it “a seat at the adults’ table”, said Hockey should never have made the claims in the first place. ” … it was definitely not a smart idea for Hockey to be espousing LTE as a suitable next-generation residential broadband service – because that is the exact opposite direction to where LTE is currently headed in the global market,” wrote Brown, in an extensive post analysing Hockey’s comments, following Hockey’s later clarification.

Brown pointed out that international telcos such as Singapore’s SingTel and the United States’ Verizon had over the past several weeks announced major restructuring of their mobile broadband plans which made them more expensive.

“From July onwards SingTel will charge an eye-watering S$40 per month for its 2GB plan and S$60 for its 3GB data plan, with market rival StarHub also announcing it will scrap its 12GB entry level plan and introduce smaller capped plans ranging from 1GB to 5GB per month – with operators around the world taking similar measures,” wrote Brown, noting similar pricing changes by Verizon in the US which have seen the telco price plans at US$50 per month for just 1GB of data, with 10GB plans costing US$100 per month. In Australia, Telstra has recent raised the rate on its yearly mobile broadband prepaid plan recharge, which offers 12GB of data, from $150 to $180.

“Politicians like Hockey probably see the mobile broadband boom over the last few years and think that it has all been wonderful for operators – but he could scarcely be more wrong,” wrote Brown. “The mobile broadband revolution has indeed created massive new revenue streams for mobile operators but it has also cost them, and continues to cost them, a huge amount of money to supply those services by deploying ever more extensive 3G/4G networks to meet the booming demand from subscribers for mobile broadband.” All of Australia’s major mobile operators are continuing to plough investment into their 3G/4G mobile networks, in an effort to continue to keep ahead of growing subscriber numbers, which have created congestion issues on all of the networks.

Brown said that by bringing in the type of tight data allowances that SingTel has done, “operators are now trying to re-position mobile broadband in the LTE era back to its rightful position in the market as a mobile broadband solution used for light external usage – with the emphasis on the mobility of the service rather than the broadband element”.

“In reality, mobile operators across the world have found is that they are able to generate a much higher revenue per GB from lighter data using Smartphone users than from residential based dongle/Tablet subscribers. That is to say that they generate a far greater yield from their core resource (spectrum) by positioning it as a premium mobile service than by opening the front door of the shop and letting users run loose with network capacity like bargain crazed shoppers at the Boxing Day sales.”

Brown noted he was “no starry-eyed fan of the NBN”, having “serious doubts” about the logistical viability of fibre to the home in a dispersed environment such as Australia, but he said that “arguing that LTE can play any significant role as a residential broadband service is misguided”. “True, there may currently be a very small number of households that might prefer a mobile to a fixed broadband connection,” he wrote, “but are these households really going to be willing to pay the kind of prices for LTE mobile data services that operators are going to be charging in the future, with high prices for very small data caps and hefty additional usage charges?”

In the Asia-pacific market, there were telcos who were trying to deploy 4G as a fixed broadband replacement, such as Hockey suggested, Brown wrote, but the results of such efforts had revealed that capacity constraints on the mobile broadband networks were already causing headaches.

“The bottom line is that although some opposition politicians like Hockey continually argue that “the capabilities of wireless are increasing rapidly, and will increase further before the NBN reaches all Australians,” – in what is a clear inference that the NBN is providing a soon to be obsolete solution – that 4G, whether delivered by WiMAX or LTE, is not a magical solution, it is still just a radio access technology,” wrote Brown.

“The idea that someday the laboratory boffins will come up with mobile technology that eliminates the need for fixed-broadband deployment is nonsense, sure mobile broadband speeds will get even faster but – and here is the key – network speed is absolutely not the same thing as network capacity.”

“The NBN debate still has plenty of twists and turns left in it yet but local politicians must, for the sake of the integrity of the debate and Malcolm Turnbull’s medical health, stop arguing that LTE can be a substantial long-term player in the residential broadband market because the facts tell a very different story.”

I highly agree with Brown’s comments, as I usually do. The analyst is one of the smarter cookies around the telecommunications industry and knows what he is talking about. 4G mobile broadband is a fantastic technology, but it will never replace fixed customer access networks as represented by the current copper or future fibre NBN networks in Australia. Australia’s politicians need to stop raising this as a possibility; it is a technical impossibility.

Image credit: Telstra


  1. This bloke comes to the same conclusion about Hockey’s comments that any other reasonably intelligent person could come to on their own, and that makes him “one of the smarter cookies around the telecommunications industry” who “knows what he is talking about”? Sorry Renai, I’d rather not drink that particular Kool-Aid.

    • I’m not in a polite mood this morning, so please stop insulting people with more experience than you before I tell you to go and drink a nice hot cup of shut the fuck up.

      • And whatever remained of your professional image falls apart in one swift stroke.

        Go fuck yourself.

      • So the paragraph in the comments policy (that you wrote) that states :

        “Firstly, as before, comments must be more or less ‘polite’, as measured by Australian social standards. This doesn’t mean you need to maintain the sort of conversation level you would use with your mother. It just basically means don’t be rude to other commenters. You may disagree with their opinions, but you should respect their right to hold them.”

        only applies to other people?

        • I’m normally pretty polite, but when it’s early in the morning (before 11AM) and someone’s first response to an article is to tell me I don’t know what the hell I’m talking about, then I can get a bit aggro. It’s kind of a sliding scale. People on Delimiter should be polite to each other. If they’re going to just slag off the person who hosts the site and writes the articles, without any provocation, then they *definitely* should be polite.

          I acknowledge I went a bit overboard on this one. I’ll remove his ban after a few days.

          • “I acknowledge I went a bit overboard on this one.”

            Fair enough.

            “I’ll remove his ban after a few days”

            He probably deserved to be banned for his second comment, but the way that little conversation spiralled
            just goes to show that the guy who wrote the comments policy knew what he was on about.

    • Why do people jump to logical fallacies like this so readily? The man is a ‘smart cookie’ because of his experience and tremendous wealth of knowledge. I’m not sure why people like Matthew can’t recognise greater knowledge, experience and understanding and just learn from what’s being said instead of weighing in with their own idiotic, ignorant opinion. The mark of intelligence is knowing when to STFU and listen to others when they know more than you…

      • Because being misinformed is the new patriotic.

        Got that quote from the last frame of Big Bang Theory.
        When I read that I thought of the NBN debate.

  2. NBN and 4G networks actually compliment each other.

    For small cell deployments, you can tap into the nbn infrastructure rather than rolling out your own fibre/Ethernet.

    NBN co can making money whether the user uses 4G/Fixed line.

    Also looking at the IDC charts, PC’s are still a growing market share despite tablets and smart phones grow exponentially, it hasn’t appeared to have eaten into the PC market at all.

    LTE/4G is not our saving grace, its a technology designed for portable devices, not a replacement for our fixed ones.

    It isn’t a valid argument to say it is in competition with nbn when they support 2 different markets, given they only just barely intercept each other.

  3. Hi Renai, one small typo, I assume “Telstra has recent raised the rate” should be “Telstra has recently raised the rate” ?

    It’s the sentence with the hyperlink.

  4. I agree with zwan, the technologies are complementary to each other. You still need fixed line networks. They are still getting more and more bandwidth out of fibre as well 10Gbps anyone?

  5. Tony Brown is right about 4G.

    But I’m not convinced his concern about the “logistical viability of fibre to the home in a dispersed environment such as Australia” is entirely valid.

    If NBNCo was laying fibre to Ku-Ring-Gai national park in Sydney and every homestead on the road from Gulargambone to Bourke I would agree completely. But the fibre footprint only covers large towns and cities, with population densities of metropolitan suburbia. The longhaul between towns needs to be there to support mobile telephony and LTE wireless, making it irrelevant to the fibre rollout that the gaps between towns may be widely separated.

    If 93% can get fibre this decade, and hence Wi-Fi support in andaround every building in towns and cities, why would you bother building inferior solutions for baseload broadband? Hence the essential but complementary role of LTE wireless.

    • Ok. I’ll bite. Is there a road between Gulargambone and Bourke? Is it sealed? How much did it cost to build do you think? More or less than running a fibre cable between the two?

      What road will the nation be using most in 20 years time?

    • Just to clarify. The NBN will be as valuable in this century as the road network was in the last century.

      If you believe that, then rolling fibre to everyone will be much much cheaper than rolling a sealed road to everyone.

      As a nation we seem ok with rolling sealed roads to most people, but not ok with rolling fibre to most people. What’s the difference?

      • MarkD, you’re quite right that 100km of fibre optic cable costs less to lay than 100km of hard road tarmac.

        But we still need roads.

        Increasing the proportion of customer transactions and services delivered online for a few cents instead of in person for a few dollars is one way to enable governments to fund other critical infrastructure.

        For this, customers need bandwidth, and the best bandwidth is fibre, including the Wi-Fi LANs that fibre supports.

        • One of the considerations when deciding whether or not to pay to seal a road includes the maintenance of an unsealed road which if trafficked enough can be higher than the cost of sealing the road. If enough people use the road that the condition can not be cheaply and easily maintained it will be sealed so the real measure is not how many people but how much damage will be incurred by not sealing the road which makes the analogy unusable by any measure.

  6. Telstra’s own One2Free HK 4G network does:

    5GB = AUD $35
    Unlimited (fair use) = $50

    • That’s true Thrawn. But I was in Hong Kong recently and that ‘fair use’ is 7Gb. After that you’re throttled.

      Also, Hong Kong is about 1/50 000th the size of Australia with as many people as Sydney, Melbourne and Brisbane together….need I say more?

  7. Thank you once again for the article. I don’t consider myself that all intelligent when it comes to these subjects, and I can see how easily it can be to be lead astray when parties start throwing dollar figures at you with panic attached to it.
    I’m glad to say reading Renai’s articles have opened up my old eyes a lot more than any politician’s spin has.
    Anyway, thank you again, can’t wait for the next round in the NBN ring!

  8. There’s only two people in Austalia that believe Joe Hockey’s bulldust.
    Himself and the liberal Party’s Village idiot leader.

    You see neither of them apologising for their lies and factaul inaccuracies, then they still want the Australian public to vote them into office. Arrogance at its finest.

    • What I want to know is why Conroy has not consistently and regularly gone out on the attack over these comments by Hockey, and painted the Shadow Treasurer as someone who wants “the iPad with the 5G and bigger GeeBees”. ( for those that have no idea what I mean)

      Instead, Conroy is sitting on his laurels and hoping that the few ‘switch on’ photo ops get enough coverage to counter. There is no retort, no fight, and it almost feels like he has given up.

      We still do not have a policy from the Coalition and that should be his main attack vector. Where is the Coalition broadband policy? Have they decided what they are going to do? Has Hockey costed it to Eleventy Billion dollars? I should be seeing this in the papers every day. I want to see it on TV even though I will get sick of his face.

      Julia is silent also apart from the odd fake button press to turn on a new area. Can’t even remember the last time she did one of those.

  9. Well there are a lot of misguided ignorant people..
    Idiots majority rule unfortunately…

  10. I wholly agree with the idea of running 4G and fibre hand in hand because they both serve a purpose but how can Joe Hockey argue that people are moving towards mobile broadband when all the evidence is showing that fixed broadband is still the most popular solution for home users.

    Cost is still the prohibiting factor (and a lack of spectrum) so I agree that anyone who tries to argue no one will take up NBN because of 4G needs to be put in their place

    • The problem with the Lib’s comments is that in many ways, they are actually correct. Just (very) misleading.

      Take the recent comments regarding 4G being “superior”. In some ways, it can be. To use TPG as an example, you can get a wireless connection for just $5 a month, which you cant match in their fixed line deals. So technically, it CAN be cheaper to have a wireless connection instead of a fixed line.

      Its only 500 meg of download (vs 50 gig for the cheapest fixed connection at $30), but it IS cheaper…

      Its misleading, but its not necessarily wrong.

      Its how they hang on through these technicalities that annoys me.

  11. Thanks Renai good read, just shot this off to a couple of friends that keep telling me that 4G will fix everything because Hockey and Abbott say so and we dont need the NBN the funny part is neither of them have 3or 4G lol they have wifi at home and they think it wont be any different probably have to spend the next week explaining the article but anyway that’s what I get for living in QLD lol.

    • 4G fixed wireless is different form mobile wireless.

      NBN’s fixed wireless uses the same technology as 4G but the cell size is fixed, meaning reliability on speeds and service.

      Mobile wireless is all over the place. Even 4G.

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