Telstra Corporation Ltd to launch 5G hotspots for Commonwealth Games in Gold Coast

A lot hinges on the future of 5G for Telstra Corporation Ltd (ASX: TLS). Its profit margins are shrinking on the fixed broadband side of things, mobile is where its earnings future will rise or fall.

Telstra and Optus are racing each other to be the first to offer 5G to Australia’s capital cities. The Commonwealth Games in the Gold Coast will be the first major ‘battle’ between the two telcos.

According to an article in the AFR, Telstra is going to launch the world’s first 5G-enabled hotspots, as well as a car that is connected via 5G.

Optus is the official telco sponsor of the Commonwealth Games, so this seems like a good piece of PR for Telstra. Eagle-eyed readers may note that there aren’t any 5G capable devices yet, Telstra is just using 5G infrastructure to connect to a Wi-Fi point. I suppose a comparison could be how the NBN is a combination of old wires and new wires.

The AFR quotes Telstra’s managing director of networks, Mike Wright, as saying “Wi-Fi has limited throughput so a single hotspot alone cannot come close to reaching the limits of 5G at our innovation centre. By using multiple hotspots with potentially hundreds of smartphone users served through a single 5G device we are able to get closer to demonstrating 5G in a real-world environment.

“Our 5G backhaul is capable of delivering download speeds of more than 3 Gbps, which is capable of supporting around 1000 HD movies being streamed simultaneously” said Mr Wright.

Telstra will allow mobile users from any carrier, local or international, to connect for free with a 10GB limit.

Foolish takeaway

This is only a small-scale demonstration and Telstra expect that speeds may slow if a large number of people are connected at once. However, it shows that Telstra aren’t that far away from being able to turn on permanent 5G infrastructure, Telstra just needs 5G-capable devices to be sold to complete the switch to a 5G mobile world.

Telstra may be a decent investment option, but I think these top growth stocks will deliver much bigger returns over the next five years.

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Motley Fool contributor Tristan Harrison 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 Scott Phillips.

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