GlobalData: expect a flood of 5G devices in 2020

5G networks have been launched, though uptake has been questionable, but this is set to change in 2020 according to research firm GlobalData.

One of the reasons for the sluggish uptake in the opening months might down to the unattractive native of geographical coverage, though it might also be attributed to the affordability of devices. GlobalData believes this aspect of the industry might be set to run wild over the coming months.

“In 2020, we will see manufacturers such as Lenovo and HMD in the US, along with Xiaomi and Oppo in Europe and Asia, hitting the market with lower-priced 5G smartphones in the $500-$700 range, with some even being offered for less than $500,” said Anisha Bhatia, Senior Device Analyst at GlobalData.

“As more devices become available across price tiers, 2020 will be the ramp-up year for 5G. Coverage will continue to grow across regions, and carriers will engage with partners to find ways to monetize 5G devices and services.”

As it stands, there isn’t a huge amount of choice available for the 5G enthusiast of today.

Device Price (rough estimate) USD
Huawei Mate 20 X 5G $1,240
LG V 50 ThinQ $1,152
OnePlus 7 Pro 5G $749
Samsung Galaxy A90 5G $810
Samsung Galaxy Note 10 Plus 5G $1,299
Oppo Reno 5G Ocean Green $1037
Xiaomi Mi Mix 3 5G $840

Unfortunately, not all of these devices are available in every market, or through every telco. The choice for the consumer is rather limited.

This presents an unpleasant ‘chicken and egg’ situation for the 5G ecosystem. Device manufacturers will not go 100% unless there is genuine interest from consumers, who in turn might be waiting for the price to come down, 5G applications to appear or coverage to increase. The 5G applications will not increase unless there is an install base, and network deployment will be staggered unless the technology is embraced. Economies of scale cannot be achieved by the OEMs unless there is appetite from the rest of the ecosystem, but cheaper devices are needed for this to come true.

It is a mish-mass of complicated result-and-outcome knock-ons, but GlobalData anticipates the launch of several new devices over the course of 2020 which should be more palatable for the consumer’s wallet. This might well be the catalyst which drives excitement (and investment) throughout the rest of the ecosystem.

According to GlobalData, the launch of Qualcomm’s Snapdragon 765 was a very important event this year. This chip, designed for mid-range devices, could enable the creation of new devices in the $500-700 range. These are still not cheap in comparison to what is available today, but it is a price point which is accessible to the mass market.

2020: convergence, divestment, disappointment and political posturing

With 2020 drawing to a close, it’s only fair to have a look at how the industry has been shaped over the last few months, and what to expect in the build up to Mobile World Congress.

Although the headlines have been continually dominated by friction between the worlds’ two most dominant super-powers, there have been other trends to pay attention to. Here, we are going to dissect four of the trends we feel will make a mark over the coming months in the build up to Mobile World Congress in Barcelona, most notably:

  • Continued political posturing as decision day looms large
  • Convergence as the new status quo for telecom operators
  • 5G delivers, but delivers very poorly
  • Telcos gradually hand their fate over to the money men

The Huawei white-noise will reach deafening levels

2019 has been a year defined by political conflict. Almost everywhere you look there is collateral damage from more extreme and absolutist politicians wielding the power afforded to them by public vote (or not in some cases). The concept of tolerance and compromise almost seems to have disappeared as bullying tactics and misleading statements are the go-to plays in politics.

In the telecoms industry, this political friction has been concentrated to the fate of Huawei. Huawei is somewhat of a proxy, representing the rise of China’s influence in the technology world and a loosening grip from the US. Some might believe the US is acting as the champion of the world, countering the espionage threat of China through its telco champion, but a lack of evidence presented to the industry will always undermine these claims.

And while the continued barrage of political propaganda, from both sides might we add, was stuttering towards intolerable at times, perhaps we should brace ourselves for an onslaught in the New Year.

Italy has recently made noises about greenlighting Huawei, Germany’s incumbents are already reliant on the firm and soon enough someone in the UK will have to make a concrete decision regarding the Supply Chain Review. These are three very influential nations and could dictate the fate of Huawei throughout the rest of the European bloc.

But final decisions have not yet been made.

In each of these markets, the telcos are chomping at the bit to drive forward with 5G deployment, but without the certainty of a Huawei decision only stuttering progress can be made. If these national economies are to compete in the digital economy, scaled 5G networks will need to be present soon enough; a decision needs to be made.

If a decision is on the horizon, expect some hardcore lobbying over the next couple of weeks, especially as we build towards the annual bonanza in Barcelona. The Huawei noise is perfectly poised to reach deafening levels.

Convergence is King

The idea of convergence, the bundling together of products and services into a single bill, is not new but it is starting to gather momentum.

It does seem like we have been talking about it for years, though it is only today the telcos have finally aligned all the relevant pieces to make a competent offer. This is a strategy which is expensive to develop, but the rewards do appear to be significant.

What is worth noting is that there are telcos who bought into the trend very early and are reaping the benefits today, Orange is a prime example. This forward-looking telco has been building towards the convergence dream for years and now looks as far away from the commoditised business model as possible.

This is a business which should be envied. It has a solid mobile and fixed business, a banking brand, fingers in the content pies and is even starting to make headway in areas like consumer security. Convergence is one reason for this as it has driven loyalty and trust through creating products which people want to buy and at a price which is tolerable.

Convergence works both ways. For the consumer, bundling two services into the same bill is cheaper in the long-run, and for the telco, it reduces churn, increases ARPU and creates opportunity to sell additional services. Theoretically, everyone benefits.

More telcos are driving towards the convergence dream, though some are not. What may emerge in the future, is a two-tiered telco industry (although it arguably already exists today). At the top, you have the telcos who have embraced convergence early, and at the bottom, the pure-play companies who believe there is nothing to the hype.

Convergence works. And those companies who have ignored it, will be the also-rans of the telco community.

Be surprised if people are happy with 5G

5G will be a lot of things, and above all else, we suspect it will be a disappointment.

This might sound incredibly negative and counter-intuitive, but it is being realistic. Today’s consumer is demanding, impatient and cash-conscious. 5G has been launched by numerous parties across the world, though the geographical footprints of these networks are minimal.

Realistically, the telcos have done an excellent job in delivering 4G connectivity. In most advanced nations, coverage is almost guaranteed, unless you are a farmer. Unfortunately for the telcos, this experience will count against them as we push into the 5G era, as the consumer will expect the same. Few will have been educated to understand that emulated the scale of 4G in 5G will take years to achieve.

This is a challenge the telcos will have to address over the next couple of months. Consumers will have to be upgraded to 5G tariffs, but they will not want to pay anything extra, irrelevant of the geographical coverage. Telcos might well have to introduce a premium on these tariffs to raise the funds to continue deployment, as the efficiency gains of 5G connectivity over 4G are highly unlikely to be enough to fund the required investments.

Enterprise customers will of course provide a lot of stimulus for the industry to drive forward with 5G deployment, though everyone in the industry should brace themselves for an unhappy consumer as the sparse 5G connectivity gets negative reviews.

Money men start to erode telco influence in telco industry

2019 has already seen numerous money men get more actively involved in the telco industry but it looks like this is only the tip of the iceberg.

Goldman Sachs bought CityFibre, Elliott Management has been wrestling for control of Telecom Italia and Brooking Infrastructure is hoovering up assets throughout the industry. These are only a few examples, but the financial and investment industry is looking much more attentively at telecoms.

But why?

Firstly, the consumer is increasingly showing a willing to spend more money on connectivity services and products. This sounds strange, but more families are upgrading to fibre, more users are taking up unlimited mobile tariffs and more products are embedded with connectivity. The consumer appetite looks attractive to these companies.

Secondly, governments are setting in place the right policies to encourage investment in connectivity infrastructure. Red-tape is being removing, ransom rents are being killed off, access to public infrastructure is being opened-up and government subsidies are becoming more common place. Return on investment for communications infrastructure is looking much more achievable.

Thirdly, the enterprise segment looks like it will be a cash-bonanza in the future. Digital is finally embedding itself in industry as more companies realise that digital-first is the only way to survive. This opens up huge potential for telcos to make more money from assets which once laid have incredibly life-spans.

Finally, the telcos need cash. The digital dream is one which is very expensive, and these are companies which have taken a beating over the last decade. Despite the promise in the future, the telco industry is a difficult one to make profitable today. This presents a bargain opportunity for the money men to engage the telcos who are desperate for cash injections to drive through 5G and fibre deployments.

As we have said before, 2019 saw a lot more engagement from the financial and investment community, though this is likely to accelerate over the coming months.

Happy New Year, Europe! And let’s learn AI

Finland is offering free AI primer to all EU countries, aiming to provide basic AI literacy to 1% of the Union’s total population by 2021.

As her EU Presidency comes to an end, Finland is offering the 513 million people living in the European Union a parting / Christmas / New Year gift: the Nordic country is making “Elements of AI”, an online introductory course for non-professionals, freely accessible to everyone in the Union’s 28 member states. The target is for 1% of the total population, or about 5 million people, to take the course by 2021.

The course was jointly developed by the University of Helsinki and the technology consultancy Reaktor. It started as a private initiative by the creators, offered for free to anyone interested. The programme was soon integrated in the country’s “national AI strategy”. The initial target of training 1% of the Finnish population was achieved just over six months after the programme started. Created in English, the course content was later made available in Finnish, which helped accelerate the uptake by more people. Later the content was also made available in Swedish (Finland’s second official language) and Estonian (native language of the largest EU immigration community to Finland). So far more than 220,000 people in over 110 countries have taken the course. “Over 40% of our course takers are women (more than doubling the global Computer Science average) and over 25% are over the age of 45” according to Reaktor.

“As our Presidency ends, we want to offer something concrete. It’s about one of the most pressing challenges facing Europe and Finland today: how to develop our digital literacy,” said Timo Harakka, Minister of Employment. Announced in Brussels recently, the content creators, working with EU partners, are going to translate the course into all the other 20 official languages in the EU. The budget of the project, estimated to run up to EUR 1.7 million ($2 million), will be paid for by the Ministry of Economic Affairs and Employment.

“Our investment has three goals: we want to equip EU citizens with digital skills for the future; we wish to increase practical understanding of what artificial intelligence is; and by doing so, we want to give a boost to the digital leadership of Europe,” Harakka said. “The significance of AI is growing. To make use of it, we need digital skills. Changing labour markets, the transformation of work, digitalisation and intensifying global competition all mean one thing for the EU: we must invest in people. Every EU citizen should have the opportunity to pursue continuous lifelong learning, regardless of age and educational background.”

Teemu Roos, Associate Professor in Computer Science at the University of Helsinki, said, “Our University has a policy of making its research and expertise benefit society at large. As research into artificial intelligence is highly advanced in Finland, it came naturally to us to make AI teaching more widely accessible.” Roos came up with the idea of training AI to all in 2017.

Reaktor shares this view. Megan Schaible, COO of Reaktor Education, wrote in a post that new technologies like AI “can feel like an insider’s club that has left the majority of us behind.” The AI for all initiative is therefore developed to “prove that AI should not be left in the hands of only a few elite coders.”

Other EU leaders may see technologies differently. Ina Schieferdecker, a junior minister in Germany’s Federal Ministry of Education and Research, and a PhD in computer science by training, recently expressed a more elitist view that Europeans do not need to understand AI to trust it.

Among University of Helsinki’s alumni is Linus Torvalds, creator of the Linux operating system.

 

Telefonica sells 2,029 towers in Ecuador and Colombia

Telefonica has confirmed the sale of 2,029 towers in Ecuador and Colombia for €290 million to Phoenix Tower International.

This is one of the first signs we have seen of the Telefonica ‘Five Point Plan’ becoming a reality. Telefonica is a business which is seemingly drowning in debt, and one pillar of this new strategy has been to monetize tower assets around the world.

“We are honoured to expand our relationship with Telefonica in Ecuador and Colombia and look forward to working closely with them on their ongoing wireless build-out initiatives across the world,” said Phoenix Tower International (PTI) CEO Dagan Kasavana.

“These transactions are exciting for PTI and will allows us to become the market leader in Ecuador, a USD based market with three healthy wireless operators with significant 4-G build-out needs in the coming years. The transaction in Colombia solidifies PTI’s strong market position with over 1,800 owned towers. Colombia has been a great market for PTI, and we see continued growth from all of the carriers in the coming years.”

The Telefonica executive team has been under considerable pressure over the last few years to deliver additional value and drive down the debt. It seems this pressure has only intensified as the realities of 5G and fibre investments start to become a reality. The disposal of passive infrastructure is one-way numerous telcos are raising funds to fuel future ambition.

Huawei promises to launch P40 with Google service replacement, reports say

Huawei has told the media that P40, the company’s next flagship smartphone will be launched with its own mobile service suite but will be built on Android 10 instead of its own HarmonyOS.

Richard Yu, CEO of Huawei Technologies Consumer Business Group, told a group of journalists from the French media that the company’s next flagship smartphone, the P40 (and likely P40 Pro), will be launched at the end of March 2020 at a special event in Paris. The exact date is yet to be announced. Yu promised the media representatives, who were on a press tour to the company’s headquarters in Shenzhen, that the phone will be in a design never seen before (“jamais vu”), with improved photography quality, better performance, and boosted automation.

Yu also confirmed that the phone will be built on Android 10 with Huawei’s customised user interface, EMUI. This is consistent with the company’s earlier announcement that its own operating system, HarmonyOS, will not be powering smartphones or tablets in 2020. Instead it will be used on other connected devices, including smart TVs and wearables.

Meanwhile, the Indian newspaper The Economic Times quoted Charles Peng, the CEO of the Huawei and Honor brands in India in Huawei’s Consumer Business Group, as saying that P40 will come equipped with Huawei Mobile Services (HMS), in place of Google Mobile Services (GMS). Both brands from Huawei as well as Oppo, another Chinese smartphone maker, were reported to have approached app developers to make the top apps in India available for HMS as well as for Oppo’s own Color OS.

“We have our own HMS and are trying to build a mobile ecosystem. Most of the key apps such as navigation, payments, gaming and messaging will be ready soon.” Peng told The Economic Times. Frandroid, a French media outlet, noted that HMS should be ready at the same time as the launch of P40.

The Economic Times reported that Huawei offers developers up to $17,000 for making their apps available for HMS, supported by Huawei’s $1 billion global fund the company announced earlier this year. Oppo’s coffer “to develop a “new intelligent service ecosystem” is reported to amount to $143 million.

It is worth highlighting that having the most popular third-party apps in a certain market (India, China, for example) available for HMS is different from bypassing GMS. The core Google services and APIs, including Chrome browser, YouTube and YouTube Music, Play Store, Google Drive, Duo, Gmail, Maps, as well as Movies and TV, are optimised to work with the Android operating system. Most importantly, there is Google’s fundamental “search” capability that powers everything else.

Developing its own operating system as well as an overall mobile ecosystem has long been on Huawei’s card. As Ren Zhengfei, Huawei’s founder, told media earlier, the work, as well as in-house chipset development capability, started long before Huawei ran afoul of the US government. However, the company has learned it the hard way that such tasks are more difficult than building a nice phone. Richard Yu had to renegade on his own promises more than once. Shortly after Huawei was put on the Identify List Yu said that the company’s own operating system would be able to power its new smartphones by the end of this year or the beginning of next. That has now been officially denied when HarmonyOS’s positioning was clarified. Yu also said, prior to the launch of P30 in September that there would be a workaround solution to load GMS on the new smartphone. That did not happen either.

Consumers may also find Huawei’s narrative less than convincing. As IDC’s Navkender Singh put it to The Economic Times, “There will be a breakdown of the conversation that Huawei or Honor devices will have OS and app store issue. It is going to be very tough for Huawei/Honor to sell the phone based on their own suite.”

Iliad joins the tower divestment trend

Iliad has confirmed the sale of its tower businesses in France and Italy to European infrastructure giant Cellnex.

As part of the deal, a 70% stake of the tower infrastructure unit in France will be sold to Cellnex, while 100% of the Italian tower unit will be off-loaded. Heading the other direction will be €2 billion, a useful amount of cash as the 5G spending spree looms large on the horizon for Iliad.

Although this deal has been in the works for some time, it demonstrates an increasingly popular trend around the world. Telcos need cash for 5G and fibre upgrades, and tower businesses have been deemed as surplus assets. Vodafone, Reliance Jio, Telefonica and Altice Portugal are all companies who are using the passive infrastructure assets as a means to raise cash, and we suspect the trend will become more apparent through 2020.

What remains to be seen is whether the divestment in fixed, dependable assets will be in the future? Without owning the passive infrastructure, these telcos become tenants. Could this be considered a short-sighted move?

Iliad is a firm which needs to ease some pressure on executives and perhaps this is one way in which is can achieve this. Share price has marginally increased off the back of this announcement, though it is still 50% down on the price in May 2017. The company is also harbouring considerable debt, which needs to be addressed sooner rather than later.

For Cellnex, this is just business as usual. The sites acquired from Iliad adds to the 1,500 purchased from Orange in Spain earlier this month, as the infrastructure giant benefits from the telcos woes. Owning passive infrastructure might not be the most exciting business in the world, but it is very profitable.

Passive infrastructure is a long-term investment which will never stop paying off (highly unlikely anyway). Radio antennae will have to be placed somewhere after all, and networks are only going to become denser, increasing the demand for passive infrastructure. While the wallets are strained for the telcos, it could prove to be a very profitable period for the infrastructure companies who will accept the valuable assets without hesitation.

US starts huffing and puffing over Huawei again

The US Government is on the Huawei offensive once again, throwing another warning to the UK and suggesting the industry should open-source 5G technology to counter the threat.

The security argument is one which the US feels might hit home, despite European counterparts erring on the side of evidence. It seems quite remarkable to us that the US Government feels by saying the same thing, only a bit louder each time, that there might be success, though we do not have the political savvy which flows freely through the halls of the White House.

“They are just going to steal wholesale state secrets, whether they are the UK’s nuclear secrets or secrets from MI6 or MI5,” Robert O’Brien, US National Security Adviser, told the Financial Times.

The US does have some leverage over the UK, this is an economy on the other side of a very lucrative trade deal after all, but it doesn’t seem to address the basic demands of the European Governments. Time and time again, European administrations have said they will take an evidence-based approach, and while some sceptics may call this political rhetoric, the fact Huawei is yet to be banned suggests there is some truth to the claim.

This approach to the Huawei-conundrum seems to be a lot more personal however, seemingly targeting the fears of a delicately balanced electorate to force the hand of popularity-craving public figures.

“If you get all the information on a person and then you get their genome, and you marry those two things up, and you have an authoritarian state wielding that information, that is an incredible amount of power,” said O’Brien. “Why the UK would sign up for such a programme is astonishing.

“German citizens just are not ready to sign up for their state to become a vassal of Beijing, and the first step on that path is allowing Chinese 5G into Germany.”

Huawei does seem to be winning the backing of the European bloc. There are of course dependency issues which will perhaps be more of a defining factor than anything else, but the Chinese vendor is doing something very different to the US propagandists; it is working with the nations to come to a solution.

The UK, Germany, Spain, Italy and countless other nations will find it very difficult to ban Huawei. Competition is needed to drive down the cost of deployment, due to the scale of the telcos, while the rip-and-replace of 4G technologies would be an incredible cost. The US has neither of these problems; there are effectively only four MNOs serving 300 million people and Huawei does not have any equipment in the network to cause backwards compatibility concerns.

But while the US is simply shouting across the Atlantic, commanding those it sees as inferior nations to its will, Huawei is working with the telcos to create a solution. In March, it opened a cybersecurity centre in Brussels to allow customers to validate security credentials and this month it christened the 5G Innovation and Experience Centre in London.

This is a firm which understands the concerns over its products and has boots on the ground to manufacture new products which are more suitable for the world of tomorrow. It is proactively managing the concerns instead of simply huffing and puffing from the other side of the world. Is there any wonder why the US is being largely ignored?

Interestingly enough, this is not the only proclamation which has made its way out of the White House and across the Atlantic.

Speaking with the freedoms attributed to those with little thought to the concept of irony, the Pentagon’s Lisa Porter is proposing 5G technologies should be open-sourced.

“The beauty of our country is that we allow that marketplace to decide the winners,” said Porter. “The market will decide. If someone is dragging their feet, that’s up to them to decide, but then the market will decide from there who wins.”

There was of course no mention of the isolationist or protectionist policies which have been rolled-out by the White House over the last few years.

In open-sourcing 5G technologies, a tsunami of technology companies could get in on the act. This of course would be incredibly beneficial for the telcos who’s procurement processes could potentially be buoyed by a race to the bottom as numerous off-the-shelf alternatives appear on the market.

This has been deemed a means to counter the threat of Huawei, ripping away the valuable advantage of years’ worth of R&D. But at the same time, it would destroy the proposition for European vendors, Nokia and Ericsson for example, as well as US technology powerhouses, Cisco and Oracle.

Perhaps the Christmas break is coming at an excellent time. There will be several Huawei announcements made in the New Year and plenty of opportunity for political ping pong. We suspect January will be a very busy month for Huawei’s PR team.

Industry offers a bunch of telecoms predictions for 2020

It wouldn’t be the last working day of the year without the good old predictions piece so here are a bunch we got together from assorted telecoms industry luminaries. It should be noted that 2020 is also the year in which all predictions pieces will have to find a new metaphor/play-on-words for being able to see into the future, which will be tough for everyone.

Reality bites

My key prediction is that 2020 will be the year realism finally hits. After years of hoping that 5G will miraculously lead to increased profit for the equipment providers and mobile operators, in 2020 it will be increasingly clear to investors that this is not going to be so and indeed it might actually reduce profits. Altnets will have to start demonstrating they can deploy fibre networks at scale and at a speed to match incumbents, and many will be found lacking. Quite how realism will manifest itself is hard to know. Keep an eye on those share prices and stay away from the Kool-Aid.

William Webb, Telecoms Consultant.

 

Fibre stimulation and content aggregation

Fibre build will be stimulated but the valuation of fibre businesses has so limited the investment players that the price of fibre companies has topped out and we’ll see consolidations. The stimulation of fibre means that 5G in new areas will become more possible, and SMEs and local initiatives will use it to do things the MNOs haven’t thought of or didn’t think of as profitable. The amount of roads being dug for fibre on top of all the other utility digs will bring all of London, Manchester and Birmingham traffic to a standstill at least once, hopefully not simultaneously.

TV content aggregation will become a key battleground as the myriad of service and bundling options (Britbox, Now, AppleTV, Amazon, Netflix, Disney, etc etc) starts to drive viewers round the bend and into bankruptcy.  This means smart rights owners will start to disaggregate their content on the basis of micropurchases per episode, maybe even per view and the provider of the best EPG may well be able to own the viewer and a portion of their data and advertising revenues without needing to spend billions on content.

Ros Singleton, UK5G Chair

 

Consumers will say “meh” to 5G

Much of 5G marketing is as we might expect it to be. One operator is hyping it as offering speed “like you’ve never seen before”, with an “instant connection” to the content you love most. Another touts “ultra-fast speeds and ultra-low latency”. But the reality is that the main benefits of 5G are complex and not best communicated with such simple messages. In fact, to date, there’s no real evidence that consumers are terribly interested in 5G, and the current rhetoric claiming that the technology is offers faster speeds than ever before is unlikely to change that. Instead, we’ll see operators focus on enterprise customers as early adopters of the technology, and rather than emphasising the speed of 5G, we’re likely to see marketing focus on 5G benefits for specific use cases.

Gavin Hayhurst, Product Marketing Lead, TEOCO

 

A move to speed-based pricing for mobile

The fact that operators aren’t charging a premium for 5G services currently does not mean they can’t in future. The fixed broadband world has offered speed-based pricing for some time and it stands to reason that mobile operators will continue to follow suit. 5G enhanced mobile broadband does offer considerable improvements in network speeds and capacity and consumers are increasingly used to paying more for the best connectivity. Industry analyst group, CCS Insight, predicts that most 5G operators will move to speed-based pricing by 2021. This will be especially true of operators looking to offer converged mobile broadband and fixed wireless access connectivity in a 5G age.

Niall Norton, CEO, Openet

 

The rise of the private network

There will be a rise of 5G private networks in the next 2 years in many cases with involvement of operators. A private 5G network is a local area network (LAN) that will use 5G technology to build and create a network. The network thus created is expected to carry along all the features of 5G network including reduced latency and higher speeds. Private networks for enterprises will be the most direct option for large businesses that want to benefit from 5G capabilities. However these networks may be offered by CSPs or directly by infrastructure and cloud and other software vendors.  Businesses, especially those involved in manufacturing and other industries, are looking forward to using private 5G networks to get high-level granular views on their sales and operations. Operations and monetization of these networks will be key to success of these networks.

Ari Banerjee, VP of Strategy at Netcracker

 

Telcos fully evolve their focus from NFV to cloud native

Regardless of the number of public cloud partnership announcements we continue to see, operators will continue to heavily invest their resources into evolving to cloud native principles. This includes the shift from VNFs to CNFs irrespective of the choice to leverage public cloud platforms or not. This shift and investment to cloud native is what will enable dynamic network capabilities, and massively streamline the cost and time to market for digital services. So, there will be less hype around ‘cloud’ itself, and much greater focus on cloud native evolution happening inside the carriers’ data centers.

Jennifer Kyriakakis, Co-founder and VP, Marketing, MATRIXX Software

 

eSIM devices and 5G to stimulate the launch of pure digital parallel brand businesses

 The pressure for moving faster to digital, automated businesses and turning new technologies like eSIM and 5G services into tangible consumer propositions will further drive operators to launch parallel brand propositions. There will be a fully focused mission to deliver excellence in digital self-care, without the constraints of legacy BSS systems and old business processes.

Jukka Heiska, VP Business Development, Qvantel

 

Let’s learn to play nice again

Policymakers should work to build a consensus with industries, businesses and other nations to reinforce the principles of free trade and rejuvenate the global trading system. Tariff barriers have reduced global commerce and international co-operation and this has had an indirect and damaging impact on cyber security. Policy makers and business should come together to reinvigorate the global trading system and agree strong, new cyber security rules that apply to all – supported by robust monitoring mechanisms that help build confidence.

Victor Zhang, President, Global Government Affairs, Huawei

 

5G indoor coverage will gather momentum

In 2020, building owners will request that current wireless coverage systems be easily upgradeable to 5G. This offers the perfect, cost-effective solution. Venue owners and operators want longevity and ROI for purchases; what they don’t want is to have to buy a whole new system in a year or two, as demand for 5G in-building coverage grows. From a technical standpoint, upgrading platforms to 5G will mean wider frequency bands (e.g. 400MHz in band 3.5). I expect 3.5GHz to be in most indoor environments, however, this will not increase coverage: 3.5GHz is all about boosting capacity.

Info Flomer, VP Business Development and Technology, Cobham Wireless

 

Innovation in spectrum will enable the rise of new 5G players

5G will see new, disruptive players entering the market in smart cities, IoT devices and private networks. All these new players will also require spectrum, driving innovation in regulation and allocation. Multiple countries, including the USA, Japan, Germany and the UK are already regulating bands of spectrums to be available through shared and priority access, and to be dedicated to enterprise applications. But in 2020, as 5G begins to takes hold, this will encourage innovation, disruption, and competition in that market. Traditional CSPs will evolve to open cloud networks, network sharing, network slicing and new spectrum to attain the cost structures, agility and innovation to compete in 5G.

Angela Logothetis, CTO of Amdocs Open Network

 

Huawei, Nokia and Ericsson will lose out to open-minded vendors

As we enter the 5G era, the traditional, closed model for building the RAN is no longer sustainable. In developed markets, the race to deliver 5G is in full swing and operators are spending considerable amounts building out their next generation networks. They need a new approach that will allow them to deploy and cost-effectively run 5G technology efficiently alongside their 2G, 3G an 4G networks. 2019 saw significant moves towards OpenRAN, illustrated by Vodafone’s announcement that it would be opening its entire RAN in Europe to OpenRAN vendors during TIP Summit. In 2020, the momentum behind OpenRAN will continue to grow as other operators realise it can help them reduce costs, drive more competition between technology vendors, and stimulate higher levels of innovation in the industry.

Steve Papa, CEO at Parallel Wireless

 

Cloud partnerships and super-aggregation

I think the recent partnerships between cloud computing behemoths and network operators – Amazon and Verizon and AT&T and Microsoft being particularly notable – will accelerate innovation applicable to the full spectrum of cloud-dependent services and applications, more effectively supporting latency-sensitive use cases than ever before. We’ve been speculating about 5G use cases for some time and these edge-computing-enabled 5G networks will offer the first large scale environments in which to test, prove and deploy the wild innovations which will eventually define the 5G era. They also pose some interesting questions around the how value chains will form around the use cases which eventually scale.

CSPs who integrate the most popular video services into a single aggregated platform – offering federated capabilities such as payments and billing, search and recommendation, ad sales and targeting, subscriber retention, video data distribution, audience data analytics, etc, to all partnered video services – will offer a better UX and achieve better retention and usage rates compared to offering them separately. Integrating Netflix into a partner’s UI, billing system and bundling strategy has been commonplace for a while and we’d expect that to extend to more and more services. One CSP described it to me as “operating the mall, not the shop” but because Analysts need to give fancy names to things to charge more to talk about them, we call it “super-aggregation”.

Ed Barton, Chief Analyst, Entertainment at Ovum

 

The Balkanisation of the business world

There’s no way US President Donald Trump, who seems likely to be re-elected in 2020, and Chinese Premier Xi Jinping, who has dispensed with the inconvenience of elections entirely, will give any ground to each other in the foreseeable future. As a consequence the trend established this year for waging a cold war via trade and business will continue. Chinese telecoms giant Huawei was the focus of this activity in 2019 and it will be joined by others from both countries, with companies becoming bundled in with trade tariffs as the great global pissing competition escalates. China is already moving towards national self-reliance in PCs and other industries are bound to follow. The US will reciprocate and regions such as Europe will increasingly be asked to pick a team. 2020 may mark the high-water mark for globalisation as China and the US increasingly seek to become self-reliant in order to deprive each other of chips to use in the great geopolitical game.

Scott Bicheno, Telecoms.com Editor

Italy throws Huawei a bone and the US a cheap-shot

The Italian Government looks set to greenlight Huawei’s involvement in the market, while simultaneously criticising the increasing protectionist trends around the world.

Speaking to local press, Minister of Economic Development Stefano Patuanelli suggested the right protections are now in place to mitigate any cybersecurity risks involved. Although the US feel this is not an outcome which is possible, many European nations seem to be heading in this direction.

“We have passed legislation that guarantees national security,” said Patuanelli. “With the right defenses, the possibility of (Huawei’s) access is not up for debate.”

Last week, some politicians suggested the Government should review the current dynamic, hinting that the likes of Huawei and ZTE could not be trusted to contribute to such sensitive infrastructure. However, this does seem to suggest there could be profits to be made in the country for the Chinese vendors.

Interestingly enough, this news could drive a bigger wedge between the Italian and US political administrations.

The US Government is attempting to pressurise European administrations to ban Huawei, though there has been little success as of late. In Italy, tensions have been heightened with the Government attempting to capture additional tax revenues from Netflix. The US Government has already fired several warnings towards the country and have also threatened additional tariffs on Italian wine and cheese.

While this is by no means a guarantee of an outcome in Italy, ignoring US cautionary Huawei tales would add more strain to the relationship.

To stir things up further, Patuanelli has also seemingly directed a barb towards the contradictory policies in place in the US.

“One cannot fly the flag of the market with one hand and that of protectionism with the other,” Patuanelli said.

This comment has of course not been officially directed towards any individual or government, though the US under the leadership of President Trump has become increasingly protectionist and isolationist with new policies.

For the telcos, some much needed certainty might be on the horizon. Telecom Italia is already chomping at the bit to name suppliers and pursue the 5G dream, but realistically all the telcos will be craving an absolute decision. With uncertainty as to which vendors will be available in the future, progress will stutter, though these statements do suggest a decision might be just around the corner.

Brookfield finds more cash for $2.6bn Cincinnati Bell purchase

Brookfield Infrastructure has continued its Christmas spending spree with the acquisition of Cincinnati Bell for $2.6 Billion.

Shareholders will welcome a 36% premium on share price, with Brookfield Infrastructure paying $10.50 in cash at closing of the transaction. The proposal has already been unanimously approved by Cincinnati Bell’s Board of Directors and now moves through to the regulatory approval process.

“The transaction strengthens our financial position, enabling accelerated investment in our strategic products that is not presently available to Cincinnati Bell as a standalone company,” said Leigh Fox, CEO of Cincinnati Bell. “This will allow us to drive growth and maximize value over the long term to the benefit of all our stakeholders.”

“This investment represents an opportunity for Brookfield Infrastructure to acquire a great franchise and leading fiber network operator in North America,” said Sam Pollock, CEO of Brookfield Infrastructure. “We are excited to leverage our operating expertise to work with the company’s management team as it completes its industry-leading fiber optic rollout plan. Cincinnati Bell is a great addition to our data infrastructure portfolio, and we expect it will contribute strong utility-like cash flows with predictable growth.”

For Brookfield Infrastructure, this closes a very busy end to 2019, with the team investing considerable funds in the telecom infrastructure business. Aside from this transaction, the team has confirmed the acquisition of Reliance Industries’ mobile infrastructure business unit in India and also a 93% stake in Wireless Infrastructure Group (WIG), an operator-neutral infrastructure provider in the UK.

Looking at Cincinnati Bell, the attractive fibre assets in Hawaii, Ohio, Kentucky, and Indiana will now be offered a super-charge with additional investments from the seemingly cash-rich Canadians. The telco currently has a footprint of over 1.3 million homes, delivering broadband, video and voice services to consumer and enterprise customers. 17,000 miles of dense metro and last-mile cables have been ‘future-proofed’, and with the customer appetite for fibre and 5G backhaul getting more evident, it makes sense the money-men are starting to get more interested in communications infrastructure.

The industry does seem to be demonstrating a useful convergence trend in recent months. Investment funds are becoming more interested in infrastructure investments, while the telcos are getting more desperate for additional funds to fuel deployment strategies. It might not be a surprise to see more of these deals over the early months of 2020.