Andy Penn the chief executive officer of Telstra Corporation Limited (ASX: TLS) has locked in Ericsson as the key technology provider for the 5G rollout. It forms an important pillar in the turnaround plans for the telecommunications giant.
Telstra has also made announcement with regards to the roll out of its 50th 5G enabled mobile site in Australia, with a plan to have 200 lit up by the end of FY18. As per the Telstra2022 turnaround strategy revealed by Mr. Penn, the company will be heavily relying on the 5G reviving the telco's earnings in order to make up the fall in the profits of the company by selling the internet access through the National Broadband Network. As of now there are no available consumers with the 5G devices and is not even expected until 2019. Optus being the only telco having significant holdings of 5G spectrum in the metropolitan areas which it acquired as a result of purchase of Vividwireless in 2012.
Mr. Penn thinks that the ramp up of the roll out of 5G technology so that Telstra gets an advantage. On the other hand, Optus and Vodafone Hutchison Australia disagrees with it as they believe that this will be an opportunity for Telco to build up the number of used cases for the next generation mobiles.
Mr. Penn wants that Telstra should be up and ready before the devices are available with the consumers and believes that the "real world environment" testing is the best way to prove that the new services will reach the high expectations which is already cast on 5G.
The 5G business is at the final stage and the devices are also very advanced. The only thing that need to be done is the testing part with the partners of the company on the networks. Mr. Penn prefers testing in the commercial environment over the lab environment.
The company is also looking forward to getting a range of different use cases, in regional, areas which is densely populated, with connected sensors and connected handsets.
Telstra owns some 3.4GHz spectrum in metro and regional areas. However, not in Sydney and Melbourne that it can use for 5G. As a result of this it is expected that the auction to be held in the month of November will be a critical one for the telco.
Telstra is hoping to take advantage of not just the consumer data usage but also via mass automation of industries which also includes the mining and agricultural industries. However, there is a reported mobile average revenue per user is moving downwards as a result of the competitors who are offering generous data allowances at a cheaper price in order to capture the market share.
As per Borje Ekholm who the chief executive officer and the president at Ericsson is showing confidence with Telstra and also assures that their extensive collaborative efforts will help Telstra to succeed in 5G. It will have a cutting edge of mobile technology.
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