The 5G frontier: As NBN falters, should Aussie SMEs make the switch?

Twelve years after the National Broadband Network (NBN) was initially announced, businesses are facing another shift in Australia’s telecommunications landscape: 5G.

Over the next few years, the rollout of new wireless broadband services is expected to present SMEs with a wider range of choice in the way they connect to the internet, whether that be faster wireless broadband or fixed-line NBN.

Samsung Australia yesterday released a research report on prospective 5G adoption among businesses, finding more than 80% of 800 technology decision-makers surveyed intend to adopt the technology within the next three years.

Of the small-to-medium businesses surveyed, 17% said they’re hoping to become early adopters by buying 5G technology in the next 18 months as both Optus and Telstra prepare to release their first services later this year.

Samsung said SMEs intending to adopt the technology are interested in expanded bandwidth and additional network capabilities like lower latency.

Samsung, a manufacturer and retailer of 5G-enabled devices, is unsurprisingly enthusiastic about the evolution of wireless broadband in Australia, saying yesterday it expects the technology to “transform the way Australians live and work”.

But there’s no shortage of uncertainty about how extensive Australia’s 5G network will be, how much 5G services will cost, and what reliability will look like.

The use cases for Aussie businesses range from platitudes about the “Internet of Things” to faster download and upload speeds, particularly for firms who haven’t found their way onto the NBN yet.

5G and the NBN

It’s hard to read the rollout of 5G services in insolation from the oft-criticised NBN, with the prospect of a faster mobile network slated to introduce a compelling alternative to fixed-line networks.

Businesses SmartCompany has spoken with in the past have expressed frustration with the NBN rollout, with many saying switching over has caused hassles for their companies and others noting their NBN services aren’t materially faster than their previous systems. 

ACCC research from last year found upwards of 90% of data downloads go through fixed-line networks, meaning Australian businesses and consumers are currently extremely reliant on ADSL and NBN services.

The network has also been plagued by reliability issues, which experts have said will only get worse as more households and businesses connect. 

Joseph Hanlon, editor at telecommunications comparison company Whistleout, says the value of 5G technology to SMEs will depend on the status of their existing internet plan — namely, how they faired in the so-called “NBN lottery”.

“There will be an option to use a technology other than the NBN,” Hanlon tells SmartCompany.

“Depending on the sort of connection a business has gotten from the NBN lottery, it might be exactly what they need.”

Optus has emerged as the first mover in 5G services and has been rolling it out gradually since April, targeting select areas in NSW, Victoria and Queensland.

Telstra, which yesterday announced a switch-off timeline for its 3G services, launched its first 5G devices in May, making the technology available from selected sites in all major Australian cities.

Changes to NBN on the way for small business

In a speech delivered to the annual CommsDay conference yesterday, Minister for Communications Paul Fletcher said he believes the introduction of 5G technology will be “complementary” to the NBN.

Fletcher also foreshadowed further changes to the troubled NBN market, slated to be introduced in the coming months, with measures to improve the rollout of new networks for small business customers on the agenda. 

“NBN can deliver huge volumes of data at low cost per gigabyte, while 5G will provide lower latency and more bandwidth when people are on the move,” Fletcher said.

“The government welcomes the fact that the mobile networks provide competition to the NBN.”

The Coalition hopes the presence of 5G services will give the NBN the kick up the rear it needs to improve service and prices, but it has clearly identified a need to intervene further, especially when it comes to small businesses.

“We have more changes coming with the Telecommunications Reform Package, which I will re-introduce in the parliament in coming months after it lapsed with the end of the last parliament,” Fletcher said yesterday.

“This will bring changes to the carrier separation rules, designed to promote competition and investment, and create more opportunities for new networks to service small business customers and potentially residential customers.”

What will 5G look like for Aussie businesses?

While 5G services are expected to be more pricey than 4G predecessor plans — at least in the short term — the type of plans available are expected to be similar to existing 4G options, albeit with faster speeds.

Hanlon says initial Whistleout testing with 5G devices has shown they can be three times faster than maximum NBN speeds, but that in reality consumers should expect a service that’s just as good as the NBN.

“We should expect 5G to be as fast as the NBN, but technically speaking its capable of being much faster,” he says.

While Optus and Telstra are rolling out services this year, the networks to support the technology are still being set up, meaning it will still be 12-18 months before most businesses can practically consider adopting 5G.

The 5G use cases

David Glance, director and senior research fellow at University of Western Australia’s Centre for Software Excellence, says the biggest advantage of 5G technology is found in its low latency, rather than its speed.

For startups and other small firms working on cutting edge technologies like autonomous vehicles, that’s a material advantage.

“If you’re driving an autonomous vehicle and it’s trying to communicate with the road and things around it, it will be able to do so without delay,” Glance tells SmartCompany.

An upgrade to wireless broadband may also be advantageous for business owners on the move, particularly sole-traders running mobile businesses, but Glance explains 5G technology still has some reliability issues. 

In the United States, where 5G rollout is further progressed, there have been persistent reliability complaints, although recent reports indicate this is improving as investment in 5G networks increases. 

“If you take a step sideways you can drop the connection,” Glance says of the US 5G network.

With reliability issues expected, Glance argues the initial use case of 5G for Aussie SMEs is limited.

“Unless you have a very specific use case for this I couldn’t see why anyone would necessarily go for it,” Glance says.

“Issues you see right now are things like people using point of sale (POS) devices that struggle to connect to the internet. I can’t see 5G will make much of an improvement in that situation.”