The incumbents have made significant progress and investments when it comes to the 5G rollout in the metropolitan cities. Along with improving the mobile experience for retail consumers, the Australian Government is focusing on efficiency gains by deploying 5G networks. According to the Bureau of Communications and Arts Research, the latest network technology in Australia could add up to 0.2% to productivity every year. This would translate to an additional AUD 1300 to AUD 2000 (approx. USD 930 -1430) additional GDP per person after the first decade of the rollout.

Key highlights for Australia

#1 Australian authorities started with offering mid-band to five incumbents

1. The three players, Telstra, Optus, and Dense Air Australia, acquired the spectrum on an individual basis. Dense Air partners with operators and cities to help them build shared networks. TPG (TPG Telecom Limited) and VHA (Vodafone Hutchison Australia Limited) registered a joint bid for the 3.6 GHz spectrum allocation. Since the merger, both TPG and VHA have integrated their spectrum, fiber, and small cells. Licenses issued are valid for ten years.
2. The 350 lots of mid-band spectrum offered in Phase 1 focused on six metropolitan cities and regional areas, while the Phase 2 auction was held for the mm-wave spectrum distribution in high-band ranges for 27 geographic regions.
3. Telstra won 1,000 MHz (26 GHz category) in all major cities and regional areas, while Optus secured 800 MHz of spectrum in Sydney, Melbourne, Brisbane, Perth, Adelaide, and Canberra, and 600 MHz in Hobart and Margaret River in Western Australia. Meanwhile, TPG Telecom acquired 400 MHz in Sydney, Melbourne and Perth, and 600 MHz in Brisbane and all other metropolitan and regional areas (25.1-27.5 GHz). Licenses under this category are valid for 15 years from the year of issuance.
4. The third phase of auction held in December 2021 auctioned 70 MHz spectrum in the 850/900 MHz under the sub 1 GHz category to expand 5G infrastructure to regional, rural, and remote Australia, apart from metropolitan areas. Two participants, Telstra and Optus, acquired the spectrum in this category. These licenses will come into force on 1 July 2024, valid for a 20-year period ending in 2044.

Table 1 shows the 5G spectrum allocation in various bands to the operators:

#2 Government catalyses enterprise adoption with an initial funding of USD 14.3 million

The Government is encouraging a multitude of industries to adopt 5G:

1. Key sectors of the economy include agriculture, construction, manufacturing, transport, education, and training. The trials will take place across Australia, in five different states and a mix of urban and regional areas. These project trials are a combined effort among businesses, educational institutions, and local governments.
2. The initiative to provide funding to the enterprises displays the Australian Government’s commitment to demonstrate the value of wireless technology to businesses in Australia. The Government announced the initiative during its 2020-21 Budget as part of its ‘Job Maker Digital Business plan’, which aims to accelerate the digital transformation of the country’s businesses and create jobs.
3. USD 14.3 million grant, supports enterprises across a range of industries. by funding their potential innovation ideas that involve the use of 5G technology It enables them to test various applications using 5G network. An enterprise is eligible for a grant of up to AUD 2 million (USD 1.43 million).

#3 Telstra leads in coverage, with the highest number of 5G base stations

3.1 Coverage

• As of November 2021, Telstra provides the highest 5G coverage – 75% of the total Australian population. The operator, which won the Open Signal award for best availability and reach, aims to attain 95% population coverage by 2025. Telstra also expects to receive 80% data traffic via 5G networks by the same year.
• On the other hand, Optus is focused on only the metro markets. It is currently in the process of adding 100 sites each month using 700 MHz and 3.6 GHz spectrums.
• The third player, TPG, has been putting efforts towards virtualising its network. Furthermore, it has entered a partnership with Ericsson to launch a 5G standalone core network. This would help TPG ramp up its coverage and deliver the true value of 5G to enterprises and individual consumers. TPG, which provides network to Vodafone, iiNet, Lebara and a few other MVNOs, claims to have achieved 85% population coverage across ten major cities in Australia.

3.2 Base stations

• ACCC, in its mobile infrastructure report 2021, reported that three incumbent operators — namely Telstra, Optus and TPG — collectively have 24,896 base stations. Out of these, 5% of sites pertain to 5G technology.
• Currently, Telstra has the largest 5G network with 2695 sites, followed by Optus at 1010 sites and TPG with 163 sites.
• Furthermore, we note that operators have the majority of 5G sites in non-regional Australia, with Telstra having 84%, Optus 96.5% and TPG 98% sites, respectively in these non-regional areas.
• Lastly, 2G services went completely off in mid-2018. Telstra has announced that it will shut down its 3G services completely in mid-2024 and re-farm the spectrum for 5G usage, all while migrating the existing 3G customers to 4G and 5G.

Figure 1 below shows the number of network sites owned by the three major operators in Australia:

3.3 5G pricing

• Mobile broadband plans- As of today, only Telstra and Optus have a portfolio of mobile broadband packages which provides free 5G access on their standard 4G packages. Telstra provides just two plans with 5G access, whereas Optus serves via four mobile broadband plans. However, when compared economically, the highest value plan costing AUD 85 (USD 60.8) per month by Telstra and Optus differs in terms of data offered. Telstra offers 400 GB, whereas Optus provides only 240 GB for the same package value. Optus also gives special offers to its customers for the first 12 months on some special packages. It is also important to note that prices for subscribers who wish to continue this plan will have to pay 76% more than what they would have been paying earlier.
• Home internet plans – One of the two 5G home internet plans of Optus stood cheaper than that of Telstra’s only plan, which costs AUD 85 (USD 60.8) per month for 1TB of data. Optus provides unlimited data under its AUD 79 (USD 56.5) home internet plan. However, the limitation with the Optus network is lower speeds, and of course, it is behind Telstra in terms of coverage as well.

3.4 The impact of 5G on National Broadband Network (NBN) internet

1. In Australia, there is a lot of discussions around whether 5G would replace NBN when it comes to home internet. NBN is a broadband service delivered over five different NBN technologies. Launched in 2011, it covers 8.2 million households and businesses. On the other hand, 5G offers a speed that is 4 to 5 times faster than NBN. Additionally, 5G internet for homes is wireless. It doesn’t require any wires or technical support, except a modem that the user can simply plug in without much hassle.
2. Despite all these advantages, coverage remains as a challenge for 5G in Australia. Only a limited set of people (wherever there is 5G coverage available) can have the option to choose 5G over traditional NBN. Today, NBN plans follow a speed tier approach. People have been facing issues with their NBN network quality, too, but there is more stability when it comes to speeds than 5G speeds, which could be fluctuating in nature. However, issues with speed stability and coverage is a case for all the countries where 5G is still in the nascent stage, and not unique to Australia.

#4. 5G mobile subscribers to reach 35% by 2025

Figure 2 below shows the subscriber mix in Australia from 2020 to 2025:

About two-thirds of the Australian population resides in metropolitan cities; this is also the initial population target for operators to accomplish a maximum of 5G coverage for. In 2021, the 5G subscribers reached more than 2 million. It is important to note that the 2 million are subscribers connected to 5G devices sold by different operators. They can switch between 4G and 5G as per the availability of respective networks. Currently, only two of the biggest operators in Australia provide free 5G access. Thus, going forward, it would be interesting to note the trend of 5G smartphone adoption and how operators will charge consumers under their 5G plans, and, if at all, will there be any exclusive plans coming soon?

twimbit estimates 5G subscribers to reach 35% by 2025, which translates to about 13 million mobile subscribers. The three incumbents also claim to have launched 5G SA that will help them differentiate this latest network technology in a better way.

5G beyond B2C in Australia

During round 1 of the funding, the Government funded 19 projects to trial and test the use cases across different sectors.

Table 2 shows the list of those 19 projects along with the funding offered by the Government:

#5 Telstra is driving major 5G CAPEX investments in Australia

• Operators Telstra, Optus and TPG have made significant investments in upgrading their networks to 5G. Telstra is estimated to have invested a cumulative amount of more than AUD 3.5 billion (USD 2.5 billion). Telstra in 2017 announced that it had set aside approximately 3 billion just to build the foundations for 5G. We see this investment going up as the operator aims for a 95% coverage target by 2025, which calls for additional CAPEX.
• Optus launched 5G NSA in 2019. Consequently, the total network CAPEX as reported by Singtel rose from AUD 663 million in 2019 to AUD 938 million in FY21, indicating investments in 5G infrastructure rollout. It further rolled out 5G SA in November 2021.
• As opposed to Optus and Telstra, TPG’s investments have not been very significant until FY2021.

End notes

Bureau of Communications and Arts Research, (2018, April), Working paper on Impacts of 5G on productivity and economic growth.

https://www.infrastructure.gov.au/sites/default/files/impacts-5g-productivity-economic-growth.pdf

Deloitte, (2018, Sept), 5G mobile technology report.

https://www2.deloitte.com/content/dam/Deloitte/au/Documents/Economics/deloitte-au-economics-5g-mobile-technology-170918.pdf

Australian competition and consumer commission, (2021, December), Mobile Infrastructure Report, 2021.

https://www.accc.gov.au/system/files/Mobile%20Infrastructure%20Report%202021.pdf

Department of Infrastructure, Transport, Regional Development and Communications, (2020, November), Press release on Australian 5G Innovation Initiative.

https://www.infrastructure.gov.au/media-technology-communications/spectrum/australian-5g-innovation-initiative