Optus' announcement came a few days ahead of yet another report highlighting the failures of the NBN, care of the Australian Competition and Consumer Commission. The report found no retail service provider was able to deliver the full speeds marketed by the NBN.

But the situation was particularly dire for the millions of households connected to the NBN using old copper lines that run from their home to the pillar box at the end of the street - known as "fibre to the node".

One in four households connected using this controversial Abbott-era technology, and paying for the 50 and 100 Mbps products, were rarely if ever getting speeds higher than 75 per cent of the advertised speeds, the ACCC said. For those on the most popular 50 Mbps download speed, the best they can expect is a maximum of 37.5 Mbps.

Apart from the inherent inferiority of copper to fibre-optic cable, there are two problems facing customers, says RMIT associate professor of network engineering Mark Gregory: the copper is often in a poor and degraded state, and houses that are a long way from the node can expect an inferior connection. Customers who fall into these two categories are most likely getting the substandard speeds.

It is these sorts of customers, who at the moment could number more than a million, that are in Optus's sights.

Optus chief executive Allen Lew was forthright when asked whether he was deliberately targeting households that were poorly served by the NBN.

"Obviously as a strategy we want to look at areas where customers' needs are greatest, areas where, based on our own experience, a 5G service will create a much better experience," he said.


To fend off this threat, NBN Co will have a number of options. An immediate one is to replace degraded copper with new copper.

"That is in itself both a good thing to do and a bad thing to do," says Professor Gregory. "Yes it solves the immediate problem, but it’s bad in that it is a mindless waste of funds to be rolling copper out now, when they should be putting fibre into homes."

But rolling fibre all the way to the homes – the original plan of the Rudd government that was scrapped by the Abbot government when Malcolm Turnbull was communications minister – is expensive, and the government has put up no extra funds to do it.

NBN Co says for those fibre-to-the-node customers getting no more than 75 per cent of advertised speeds, the situation will improve when the ADSL services are switched off.

Currently NBN must reserve a portion of capacity on the copper lines for ADSL customers, something it calls "coexistence". But ADSL services will be switched off 18 months after the rollout is complete in June 2020, which NBN Co says should improve speeds.

NBN Co also says in-home wiring is often to blame for slow speeds. "Isolating telephone sockets, or remediating internal wiring with the help of a licensed cabler, can rectify these issues in most cases and provide significant speed boosts," an NBN Co spokesman said.

Still, the ACCC report finds even the best quality connections are still not delivering on their advertised speeds. So if you're paying $70 a month for a 50 Mbps download speeds, as things stand you are guaranteed to get less than that.

If Optus' 5G fixed wireless product delivers on its promise of guaranteed peak time speeds of at 50 Mbps, and up to 400 Mbps, for the same price as the NBN's 50 Mbps plan, it will be a seriously competitive proposition. And Mr Pugh says his own research shows people are very open to switching to fixed wireless.


He says Optus has every reason to push this product. "I don’t know what the margins are for their 5G product, but their margins for their NBN products are clearly very low. It doesn’t look like NBN pricing is changing any time soon, so I think the strategy of pushing people onto their network is a good one,"

Smaller players such as Uniti Wireless are already providing fixed wireless alternatives to the NBN in limited areas. Other bigger players, including Vocus, TPG and Vodafone, have expressed an interest in doing so, but are yet to turn talk into action.

Of the two other owners of mobile infrastructure, Telstra and Vodafone, Vodafone is the only one to have expressed an interest in wireless bypass of the NBN. But it is yet to begin constructing its 5G network, and is unlikely to make any move in the fixed wireless direction until it knows whether the Federal Court will rule the merger with TPG legal. A decision is not due until February next year.

That leaves the mighty Telstra. Telstra is in a unique position. As part of its definitive agreement with the government over its handover of infrastructure to the NBN in return for billions of dollars in compensation, it commits not to compete with the NBN. That means it is forbidden from marketing fixed wireless as an alternative to the NBN.

This, industry sources say, is a significant but not necessarily insurmountable obstacle. If Telstra could find some other way of marketing fixed wireless that did not breach this agreement, then the NBN would likely be in real trouble.