5G price hike unlikely, says Telstra’s ANDY Penn

Telstra says customers are unlikely to shell out more for new, faster 5G mobile connections.

Telstra CEO Andy Penn says the business case for 5G stacks up on capacity alone. Picture: Aaron Francis

Telstra is betting on 5G technology to open new revenue streams as it adjusts to the low margins in the fixed broadband market and fierce competition in the mobile market, but says customers are unlikely to shell out more for new, faster mobile connections.

Getting customers to sign up to 5G services will be part of the challenge for Telstra, even as it gets ready to offer 5G services to mobile consumers.

Tesltra CEO Andy Penn said that the telco’s ongoing investment in 5G will deliver a net benefit, despite the current lack of any clear use cases for the technology and customers being unlikely to pay a higher price for 5G services.

“We haven’t disclosed our pricing on 5G yet. There are opportunities to provide customers with extra services, but I think that it’s unlikely that core connectivity on 5G can be priced differently,” he told the media at the Mobile World Congress 2019 event in Barcelona..

“There is a lot of talk about the use cases of 5G but we think that the business case for the technology stands up purely on the increased capacity and throughput it gives to our networks,” he said.

“5G is arriving at the same time as a number of technologies like cloud computing, artificial intelligence and edge computing are hitting the market and that’s going to be transformative.”

Meanwhile, Telstra is also looking to bring 5G into the financial services sector, trialling a project with Commonwealth Bank to develop applications for consumers.

“The deal with CBA is to help them think about what the bank of the future needs to be,” Mr Penn said.

Mr Penn said there are similar projects underway with players in other sectors.

“We are doing other things as well, specifically with miners, and in logistics with Linfox. CBA is interested in this particular project and it is a major existing customer of ours,” Mr Penn said.

According to Telstra, which is working with its network partner Ericsson, the project will explore and trial 5G edge computing technologies, where data can be processed closer to a device without sending it back and forth to a data centre.

Telstra’s network boss Nikos Katinakis said the pilot project is the first step in helping Telstra make money from 5G technology.

“It’s about starting to monetise 5G, so it’s not just a science project anymore. The idea is to have something saleable,” he told the media overnight.

“For now we are doing everything in a lab, once it’s proven we will engage further with the bank.”

Commonwealth Bank executive general manager Pete Steel said the bank was ready to learn and test the possibilities of 5G and edge computing.

“These technologies have significant potential to enhance the availability, stability and performance of our network infrastructure and we hope they can help us provide quicker and better digital experiences for our customers,” he said.

The announcement comes as Telstra continues to sign up exclusive deals with smartphone makers on 5G handsets.

Last week, Telstra announced a partnership with Galaxy S10 5G phone and the telco has used MWC 2019 to sign up deals to offer LG’s V50 ThinQ handset exclusively and Oppo’s first 5G handset when it launches in Australia.

Telstra and Ericsson have also announced a partnership to deliver internet of Things (IoT) connectivity to business customers.

Under the terms of the partnership, Telstra’s cellular IoT capabilities and Ericsson’s Connectivity services will be integrated into one singe performance management solution.

According to Telstra, its business customers will be able to manage, access and track all of their IoT devices and networked assets over the network from 30 March.

“With the ever-increasing expansion of the IoT market, our partnership with Ericsson will offer our customers an easier way to manage and scale connected devices and applications,” Telstra chief technology officer Hakan Eriksson said.

Supratim Adhikari travelled to the Mobile World Congress 2019 as a guest of Oppo.