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Kudos Vodafone for launching 5G, now about the $10 surcharge

Hats off the Vodafone for building New Zealand's first meaningful 5G network.1


It's a big step for New Zealand telecommunications and an even bigger step for Vodafone.


A year ago it looked like the company would be starved of the resources needed to make a significant 5G splash. That changed when Infratil and Brookfield fund a $3.5 billion split from the UK-based parent company.


100 Vodafone 5G sites open today


Today there are 100 sites. While this sounds good, in practice it means scattered pockets of 5G in a sea of 4G mobile coverage. Vodafone says it will upgrade the 4G sites to 5G-like speeds and increase the number of 5G sites to around 1500 in the next few years.


Performance on Vodafone's initial network is impressive. This morning social media was full of screen shots showing handsets downloading at speeds of around 500mbps. Actually the screen shots showed download test sites, which amounts to the same thing.


Even so that is not the gigabit speeds that 5G companies have promised. In a media statement, technology director Tony Baird explained why this isn't happening yet. He says:


“We’re using 3.5GHz spectrum to launch 5G, and our current radio spectrum holdings will mean that Vodafone customers see an uplift of up to 10 times current 4G speeds.


"However to reach the one gigabit speeds that we’re seeing internationally, we’ll need approximately 100MHz of 3.5GHz spectrum so will continue to work with the government on the early allocation and auction processes.”


It's worth remembering today's 5G is uncluttered. There's almost no-one using it. That's going to help early performance. The technology should cope better than 4G with lots of traffic, but we're months away from that happening.


New 5G handset needed


You can't just walk into a 5G zone and get high speed mobile broadband. You need to buy an expensive new handset first. There are two models at the moment. Both are from Samsung and both are Android models. If you can live with Android you'll be good to go.


If other 5G equipped phones from other brands are on the way to New Zealand, the companies making them are keeping quiet about it. Realistically there won't be a wide choice, and certainly not suitable iPhones until at least this time next year.


Premium price


By then Vodafone will charge a premium for 5G network access. The company says suitably equipped customers can use the 5G network at no extra cost until the end of June. From then they will need to pay an extra $10 a month for the service.


This echoes what happened in the early days of 4G. Although the premium didn't last long once competition kicked in. This time Vodafone has at least six months start on its competitors, maybe much longer.


It may have been reasonable to ask 4G users to pay a premium, they got a noticeable performance upgrade. The practical benefits of upgrading to 5G will be less obvious to most phone customers.


Yes, they will see faster speeds. Videos will download faster. On paper you can browse faster.


Yet there are no practical mobile applications for ordinary users  that need extra speed. Not yet. 4G mobile has plenty of bandwidth to watch high resolution video on a handheld device. And when was the last time you hit a bottleneck browsing on 4G?


Gamers


Gamers may find something worth paying a premium for. They won't see higher resolution, but they should see lower latency from using 5G.


That's good, but $10 a month just to get a better gaming response seems a bit steep for all but the most hard-core gamers.


Unlike 4G, most of the benefit of 5G goes to Vodafone and its enterprise customers. The technology means many more paying customers can use cellular at the same time, which gives Vodafone an opportunity to sell more. It also gives the company shiny new things to sell, like network slices and internet-of-things services.


In that sense charging mobile users a premium is like asking supermarket shoppers to pay more because a new Pak'n Save is opening down the road.


If Vodafone is going to get non-business customers to upgrade their mobile and pay more, it needs a better reason than fast. Phones already do fast-enough with 4G.





  1. Spark's handful of South Island fixed wireless sites pales in comparison.


Kudos Vodafone for launching 5G, now about the $10 surcharge was first posted at billbennett.co.nz.

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