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Telstra has called for the establishment of a policy and regulatory framework for investment and innovation in business and other use cases.
The telco made the calls in its submission to the Federal Government’s 5G inquiry, in which it claimed that there needs to be "substantial capital investment, both in the cost of equipment and cost of acquiring radio spectrum", which could be supplemented in part by the Government.
The submission continues to mention how Telstra spent $4 billion in capital expenditure in the last 12 months. Over the last five years to prepare for the 5G rollout, the submission claims Telstra has spent $8 billion, with nearly $1 billion being spent from the deployment of 5G to the end of financial year 2020.
The telco predicts that expenditure over the next two years for rollout and spectrum acquisition will be at similar levels.
By comparison, the entire telecommunications industry spent between $9 billion to $11 billion per annum over the last three years.
Meanwhile, the submission refers to research from PwC that return on invested capital for telecommunications was only 7 per cent in 2016, down from 12 per cent in 2012.
“Over time, reducing returns on invested capital leads to the risk of capital investment reducing and a significant decline in network experience for customers,” the submission claimed.
“The regulatory and policy framework must enable providers to generate a sufficient rate of return on the services they sell, while still meeting the goal of fostering open and fair competition.
“This occurs best through service differentiation, which in the 5G era will come from traditional attributes such as network coverage and performance, along with new service differentiation capabilities enabled through new features such as network slicing.”
Telstra added that they would not want to see policies to undermine service differentiation like mandated roaming and sharing of active network equipment between carriers, as the submission claims this would stifle competitive differentiation and disincentives operators to invest.
“It is vital that government policies support investment, delivering true product and service differentiation that underpins healthy investment returns,” the submission noted.
Telstra's submission states it was pleased about the Federal Government’s announcement to auction off the 26 GHz spectrum, buts wants to see spectrum in the 3.7 GHz to 4.2 GHz band freed up to make way for 5G.
Throughout the rollout of 5G, costs are expected increase through the rollout with the deployment of multiple small cells according to its submission.
This is because despite Telstra claiming small cells cost less per cell than macro base stations, to achieve capacity and speeds that users are expecting more small cells will need to be deployed, especially in regional and rural areas.
To address this cost issue, the submission claimed that there would be an opportunity for government co-investment in future rounds of the federal government’s regional Mobile Black Spot Program.
Alterations to this program include integrating backhaul capabilities, the inclusion of smart mobile repeaters and passive Yagi antennas to boost existing and future mobile service performances and considering locations based on social and employment hubs and roads and facilities.
The submission also stated that regulations need to be reviewed across every Australian sector to support technological innovation in every sector and to address the digital divide between metropolitan and regional areas.
“The 5G future is for everybody and we cannot have a situation where some Australians are missing out,” the submission stated.
Additionally, Telstra would like to see improvements in longer term opportunities in deployment framework, the Federal Government taking more of an active role in promoting 5G to drive its demand and funding and education for research into electromagnetic energy (EME) – the latter of which being a major point of concern by some Australians, the submission claimed.
"The level of what we believe to be misinformation, purported to be based on scientific and medical evidence, circulating in the community about 5G EME and health is on a scale we have not seen with the rollout of previous generations of mobile technology," Telstra's submission stated.
"We have also seen a lack of awareness and understanding of EME health related issues among some medical practitioners which is hampering their ability to properly advise patients and the wider community."
