Telecommunications in 2022 Australia: 5G

Telecommunications in 2022 Australia: 5G

Read Time: 4 Minutes

Demand for internet connectivity has surged during the COVID-19 pandemic and resulting lockdowns, with the Australian Communications and Media Authority (ACMA) reporting data traffic in Australia hit an all-time high in 2020 and 2021.

The Growth of 5G

The number of global 5G networks has multiplied over the past two years and is expected to continue, while usage has also grown. Despite that, some players in the telecommunications industry face headwinds in the coming year, including the commoditisation of telecom services and balancing 5G revenue opportunities in the face of what has been described as the Largest Capex Supercycle in Decades.


Connectivity operators bear the brunt of challenges, competing locally, while devices and applications from the likes of Apple, Google, and Facebook create competition for services beyond connectivity. That makes the need for operators’ global scale more necessary: if you don’t have global scale, it’s difficult to offer products and services. Operators claim they cannot sell only gigabytes, but it’s difficult to move up amid competition. In Australia, Telstra has had Telstra Smart Home, but the emergence of, e.g., Google Nest forced Telstra to exit that market. Telstra also launched its Wi-Fi and Bluetooth tag. Then Apple came in with AirTags and Telstra again had to make the decision to exit that market. Whenever domestic operators try to move up the value chain by offering products, global-scale competition and domestic regulation stymie them. The operator business went from being a profitable business as owner of the entire stack to a commoditized seller of gigabytes.

The Spectrum

The spectrum itself is challenged as well. In Germany, Mercedes has argued that it wants access to the spectrum to deploy 5G in its factories. Modern factories tend to be agile; they don’t want wired equipment, and they don’t think Wi-Fi is robust enough, so 5G becomes the solution. However, Mercedes may realize it’s more difficult to run the network than it thought and revert back to an operator partner. We’ll have to see how that plays out.

The latency in 5G goes from 4G’s 25 milliseconds down to five milliseconds, but it takes a person 100 milliseconds to react to anything. It doesn’t matter for consumers (except maybe in gaming), so the benefits are greater in the enterprise — factory automation, driverless trucks, driverless tractors, etc. A lot of the 5G use cases, applications, and revenue possibilities will come on the enterprise side.


One enterprise strategy that shows promise is partnering within vertical industries to develop applications, and operators are studying which industries make sense and what it requires. For example, Telus in Canada is going all in on agtech. Maybe in Australia, mining makes sense. Determining that direction is an important question for operators. Operators are looking at application partnerships and targeting specific vertical industries to place the right bets.

If those bets are successful, operators may be able to scale globally. For example, let’s say an operator becomes very good at providing connectivity for John Deere, a global manufacturer of farming equipment. John Deere might enlist that operator to implement the same services in additional countries to avoid training individuals from scratch in each locale. Of course, the spectrum will be locally owned, but the managed services and other competencies might scale globally.

5G Won’t Answer Every Question

It’s worth noting that the 5G rollout in Australia won’t replace fiber infrastructure. There is still limited spectrum available for 5G and cellular, and the benefit of that spectrum is predominantly to mobile users. Once users are in a fixed position, it’s usually better to use the fiber, even if 5G is very fast. If everybody tried to watch Netflix over 5G, there wouldn’t be enough spectrum. 5G also requires a significant number of base stations, and they require power and backhaul. You have to build fiber out to those stations to get the backhaul back from it. You’ll need that if you don’t already have fiber built out to deploy 5G.


One thing that remains important is cybersecurity, and the mobile and cellular technologies have taken that seriously. Everything has been encrypted from day one. Cellular technology is safer compared with Wi-Fi. Operators will maintain that security, because it will be important as we move into the digitization of various industries using 5G.

For most people, you have three different worlds that end up on your device: your private life, with your banking and various apps; your government, which in some cases has begun to move to digital with tax returns; and your employer, which sometimes requires you to download various tools such as verification apps. If we can trust the device, 5G will develop faster. If we cannot trust the device, development will move slower. Focusing on the cybersecurity and security aspect might be even more important than focusing on low latency.

About Hakan Eriksson

Hakan Eriksson is a senior global executive and board director with 35 years’ experience in telecom and innovation. Prior to running his own business, Hakan was Chief Technology Officer at Telstra. Before this, he was the CEO of Ericsson Australia and New Zealand and CSO Ericsson Southeast Asia and Oceania. He has held a number of senior positions in the research and development field for Ericsson in Sweden and internationally.

This telecommunications industry article is adapted from the GLG Roundtable “Telecommunications Australia 2022: Trends and Opportunities in the 5G Era.” If you would like access to this webcast or would like to speak with telecommunications industry experts like Hakan Eriksson, or any of our approximately 1 million Network Members, contact us.

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