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Telstra Corporation Ltd just entered the 5G technology race

Credit: Telstra

Telstra Corporation Ltd (ASX: TLS) won’t stand by as Optus develops its 5G network. Australia’s largest telecommunications company is expected to display progress with its own 5G technology later this week, and to offer next generation mobile internet by next year.  

Many were surprised last Friday, when Optus announced that 5G mobile internet will be available in metropolitan areas by 2019. Optus attempted to pre-empt competition, in anticipation of what Telstra is going to reveal in a media gathering scheduled for next Wednesday.  

Telstra must rise to the challenge, or competitors will erode its market share. To fund the costly upgrade of its mobile network the company would enjoy some more operating cash flow. In this respect, the $273 million impairment on Telstra’s holding of video technology provider Ooyala announced on Friday is not encouraging.  

This week will reveal whether investors consider the 5G race more of an opportunity than a threat.  

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Motley Fool contributor Tommaso Autorino has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended Telstra Limited. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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