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