The federal government has dismissed suggestions wireless technology is a threat to the national broadband network (NBN)as Telstra plans to boost mobile internet speeds.
The telco giant aims to have the new 4G technology ready in capital cities and some regional areas by the end of the year.
Telstra chief executive David Thodey says demand for mobile data is doubling each year as more Australian opt for smartphones, mobile modems and tablets. Fourth generation wireless can deliver speeds comparable with the NBN in areas where there is good mobile reception.
The potential could threaten the viability of the government's $36 billion NBN.
Telstra's vow to improve its mobile technology also comes only a day after a report commissioned by the Gillard government said wireless technology was a key risk to the NBN business case.
Communications Minister Stephen Conroy has downplayed this suggestion, and welcomed Telstra's announcement.
"Far from being a threat to the national broadband network, wireless is an important complementary technology to fibre," Senator Conroy said in a statement on Tuesday.
Opposition communications spokesman Malcolm Turnbull said wireless would become a competitive force and undermine the case for installing optical fibres to Australian homes.
"The government shouldn't be putting all of its billions of dollars of subsidy into one technological basket," he told Fairfax Radio.
The Australian Greens defended the government against criticism that it backed the wrong technology.
"If you wanted to have all-wireless strategy, you'd have one of those mobile phone towers on every street corner and you only get top speed if you're standing right next to the tower and no one else is using it," communications spokesman Scott Ludlam told Sky News.
Telecommunications consultant Paul Budde said the NBN would still be viable even with strong growth in wireless services.
Sectors such as health, education, media and energy, will favour the NBN's fibre-optic technologies.
"Yes, there will be an overlap ... but there are applications that are impossible to run over a wireless network," Mr Budde told ABC radio.
The heat on the NBN began on Monday, when a government-commissioned report identified wireless technology as a key risk to the project. Corporate advisory firm Greenhill Caliburn said the competition from mobile-centric broadband would challenge take-up forecasts of the NBN.
The government aims to connect 93 per cent of Australian households with high-speed optical fibres by 2020.
NBN Co, the company building the network, has ambitions to deliver broadband speeds of 100 megabits a second, which would rise to 1000 megabits in the longer term. As this happens, Telstra will decommission its copper network.
But far from being a collaborator, the corporate behemoth is emerging as a key NBN competitor.
Announcing Telstra's plans at the Mobile World Congress in Barcelona, Mr Thodey said his company wanted to remain Australia's technology leader, a title the commonwealth is also vying for.
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