Being first when it comes to the launch of a new mobile technology is somewhat overrated but being an early market leader in a new technology is not. Given the challenges in launching a new mobile network, early leadership speaks highly of an operator's ability to manage its ecosystem of partners, its level of technical competence, and its forward thinking on new services. Operators in the US, South Korea, and Japan are where we often look for leadership when it comes to the next generation of mobile networks. Australia's Telstra should be added to that leadership list as well.
In early December 2018, Telstra held an enterprise services analyst conference in Sydney, Australia. Given the importance of 5G to enterprise services, and its publicly stated goal of 1H19 commercial launch, it was no surprise the operator spent considerable time on the topic.
Telstra has already made progress on its 2019 launch goal. The company has turned on 130 5G sites and plans to add another 70 by year-end. The company announced its first commercial 5G device, a 5G router from HTC. Telstra is also trialing other prototype 5G mobile devices. It recently completed a 5G-to-5G video call over its commercially ready network. These milestones alone, however, aren't the only reason to place Telstra in the 5G leadership category.
Telstra has made progress on the very challenging question of "what is the value of 5G and how should it be used?" The company understands the long-term proposition of 5G. Its early benefits will be around cost savings with the addition of extra network capacity and improved spectral efficiencies. For example, increased use of smartphones for interactive gaming and video streaming requires improvements over current LTE network capabilities. Whether Telstra can actually grow consumer ARPU this way isn't clear, but it is certainly thinking about ways in which it can.
Enterprise does appear to be the bigger opportunity for Telstra, but this opportunity will take time to develop. In this area the mobile operator again shows its early 5G leadership by using its currently 4G network to take those initial service steps. The scale advantage of 5G over LTE is irrelevant if there is nothing to scale. Telstra's work today on different industry vertical use cases will accelerate the operator's goal of monetizing its 5G network. That is where 5G leadership will really pay off, especially in the areas it's already developing around agribusiness, mining, and asset tracking.
Bridging the 5G Gap, GLB005-000082 (August 2018)
5G: Regional and Global Approaches to a Technology Step Change, GLB007-000092 (July 2018)
Daryl Schoolar, Principal Analyst, Service Provider Infrastructure