Turnbull 5G ban is hurting local operators

In comments to the Department of Home Affairs on its proposed new Critical Infrastructure legislation Optus CEO Kelly Bayer Rosmarin has echoed earlier comments from the Vodafone and TPG in saying that the Malcolm Turnbull 5G ban on all Chinese vendors has been very costly for local mobile network operators.

The Optus submission to the Department of Home Affairs says that the impact on industry economics resulting from the Huawei 5G ban was one of the key elements driving uncertainty around the local investment environment for the company.

Speaking to local media Ms. Bayer Rosmarin added that, “The challenge for all of us as an industry is to figure out how to focus on the right levers that would turn the sector to be thriving, delivering on its cost of capital to investors so that we can continue to invest and underpin economic growth for the country.”

Respected UK economics forecaster Oxford Economics has estimated that the annual 5G capex increase for Australian operators because of the 5G ban at $300 million and also says up to three million Australian’s will have delayed access to 5G.

Huawei Australia understands the frustrations being voiced by operators like Optus and Vodafone that are spending huge amounts of capital expenditure on mobile network infrastructure – and need to be able to recoup that investment.

The reality of the matter is that had Malcolm Turnbull not banned Huawei from 5G then Optus would not only be a domestic 5G leader here in Australia but would also be one of the most advanced 5G operators in the global market and Australian consumers would have more affordable and better quality 5G.

Instead Optus & Vodafone have been forced by the Federal Government to spend millions of dollars in additional capex on ripping out world leading 4G kit from Huawei and replacing it with 4G and 5G equipment from other vendors.

The most galling part being that the Nokia and Ericsson kit replacing Huawei is made in China – ironically in partnership with state-owned Chinese companies – and is not undergoing any independent security testing before it is deployed onto the mobile networks here in Australia.

So, it is not only more expensive but it is not actually any safer at all anyway.

The only real beneficiary of the Malcolm Turnbull 5G ban has been Telstra – a non-Huawei customer – with the 5G ban imposing millions of dollars of additional costs and delaying the 5G rollouts of its competitors, allowing Telstra to become the 5G market leader.

The unique dynamics of the Australian continent make this one of the most challenging places in the world to deploy telecoms infrastructure – which is why we have now spent well over $150 billion of public money on the National Broadband Network.

At a time when technology is so important in helping rebuild the Australian economy post-COVID we should be looking to do all we can to lower the cost of building networks rather than increasing the cost and subsequently simply making 5G services more expensive for consumers.

Indeed, we have already seen Telstra increase their charges for 5G by up to $15 per month for local consumers making it even harder for local consumers to get an affordable alternative to NBN services.

As our Asian neighbors power ahead with 5G investments and advancements Australia is falling behind again – just like we are with the NBN – and the country is being lumbered with another telecommunications policy failure that ordinary Australians will end up paying for – in more ways than one.

Jeremy Mitchell is Chief Corporate Affairs Officer at Huawei Australia

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