Coopetition is becoming permanent fixture of 5G world

It might be a management consultant phrase, enough to have some clawing their eyes out, but coopetition is quickly becoming the norm as telcos drive towards the elusive goal of ROI.

The latest firms to enter into the new-era relationship are Orange and Proximus. Announced this week, the duo has signed a term-sheet to enter into a mobile access network sharing agreement by the end of the year. The scope of the partnership will be to meet raising demands in terms of mobile network quality and indoor coverage.

“The signing of the term sheet is an important step in reaching a final mobile access network sharing agreement between Proximus and Orange Belgium,” said Dominique Leroy, CEO of Proximus. “It will allow us to embark on a faster and broader 5G roll-out while improving mobile network capacity and coverage to the benefit of our customers and while keeping a strong and differentiated customer experience.”

“Mobile access network sharing is a trend in Europe which benefits consumers, as it enables more efficient investments to cope with the increasing data consumption,” said Michaël Trabbia, CEO of Orange Belgium. “The timing of this mobile access network sharing agreement is important as it will allow us to accelerate 5G roll-out, while bringing significant environmental benefits by reducing the combined energy consumption by 20%.”

This is a very simple partnership ultimately. The two telcos will enter into a shared infrastructure agreement, it seems both passive and active infrastructure is included but will rely on their own spectrum to differentiate on customer experience. This does appear to be an increasingly common strategy across the European continent to drive the commercial appeal of the connectivity business.

Another example of such business is in the UK, where the telcos have paired off to create joint-ventures to own and manage passive infrastructure in certain regions. CTIL and MBNL are the JVs in question and allow the four MNOs to share the expensive job of civil engineering but differentiate their offerings on the active equipment being installed on the masts and spectrum assets.

One of the reasons such partnerships are becoming more common across Europe is scale. With more than 100 different telcos across the continent, the telcos cannot achieve the same subscriber bases as counterparts in the likes of the US and China. This impacts procurement strategies as well as the ability to drive ROI in the mid-term.

Bearing this in mind, densification and network rollout into the rural communities becomes a problem. 5G is eventually going to force the telcos to acquire more mobile sites in the urban areas, to deal with the traffic increases but also to compensate for shorter spectrum ranges on higher-frequency bands. The rural environments are of course less commercially attractive due to the lower population density, but there are both commercial and regulatory demands to prevent a digital divide.

“The deal between Orange and Proximus is just the latest in a series of network partnerships designed to keep a lid on costs and accelerate deployment,” said Kester Mann of CCS Insight. “This is particularly important at the start of the new 5G era as operators continue to scratch their heads over the business case for investment.

“Although the approach could limit opportunities for operators to differentiate based on connectivity, it could free up investment in other areas such as content, vertical markets and new services. This can only be to the benefit of the consumer.

“We should expect further industry collaboration going forward. This could include the possibility of more innovative models such as shared networks between all operators in a single market or ownership of assets such as spectrum and infrastructure by independent third parties or even government.”

Another recent example of this type of coopetition is in Japan. Last week, KDDI and Softbank came to an agreement to share infrastructure in rural environments. This initiative is also geared towards reducing the burden of capital expenditure in delivering 5G to every corner of society. TIM and Vodafone Italia are another duo exploring the coopetition play to tackle the issue of rural 5G connectivity.

Elsewhere in the telco world, coopetition is emerging in the services game.

There are numerous examples of telcos buddying-up, for most cases with telcos outside of their commercial jurisdiction, to jointly develop services for 5G epoch. As it stands, 5G is nothing more than a ‘bigger, badder, faster’ version of 4G, though if the financial promises are to be realised differentiation is needed. For most, this means venturing into the murky world of enterprise services.

Last month, SK Telecom and Deutsche Telekom announced a partnership which would develop various technologies to improve indoor coverage and explore low-latency media services. A long-standing partnership between DT and Orange has led to the emergence of Djingo, a smart-assistant to challenge the dominance of the OTTs in the smart home.

Coopetition might sound like a buzzword fit for boardrooms of coffee drinkers and overpaid management consultants, but it is a trend which is slowly emerging in the telco world. And in some cases, it might just be the perfect solution to drive towards the long-overdue profits.

BASE takes the 4G lead in Belgium – OpenSgnal

Network monitor OpenSignal has released its mobile networks update for Belgium and it reveals BASE as made the biggest improvements.

OpenSignal spent 90 days measuring the Belgian market from the start of May. It found that BASE has taken the lead in the key 4G download speed metric, having been level with Orange six months ago. BASE now averages 45 Mbps, up 5Mbps from the last time, while Orange has fallen off to a mere 34 Mbps. Proximus is right in the middle with 39 Mbps.

None of these are bad scores, it should be noted. An OpenSignal test on your correspondent’s phone running the EE network in north Herefordshire yielded 24 Mbps. The overall Belgian speed rankings reflected the 3G scores, as you would expect, while coverage was pretty identical for all three. Here’s some more data.

Opensignal Belgium 1

 

Opensignal Belgium 2

Opensignal Belgium 3

Opensignal Belgium 4

Opensignal Belgium 5

Opensignal Belgium 6

Proximus bags €400mn loan for fibre rollout

Proximus has announced it will be the recipient of a €400 million loan from the European Investment Bank for the roll-out and upgrading of its fixed broadband infrastructure in Belgium.

The money will be used as part of the Fiber for Belgium project, with the telco committing to bringing fibre to 85% of businesses and to the centres of cities and communes in Belgium. Over the next 10 years, the project will aim to invest $3 billion to future-proof the network.

“We are pleased to support Proximus in this unprecedented investment to roll-out their fiber-optic network across Belgium,” said EIB Director General Jean-Christophe Laloux. “This investment will significantly enhance access by both residential and business users to ultra-high speed broadband. This is key today – for citizens and companies alike – to reap the benefits of the digital single market.”

“Through the EIB loan, we have gained a cost-effective long-term, reliable financing partner for one of our most important strategic projects,” said Proximus CFO Sandrine Dufour.

Progress for the telco has seemingly been pretty positive so far, as 6,000 enterprises were already connected to fibre, while the telco has short-term implementation plans for 24 cities and communes. The last mile seems to be the big problem here however, as Proximus claims to have hooked up 94% of properties with fibre-to-the-curb. Unfortunately for those who want the full-fibre diet, Proximus has been making vectoring noises though this loan might change the tune.

Looking at the financials of the business, there have been some mixed signals. Over the last twelve months, total revenues declined 1.6% to €5.78 billion though domestic revenue grew by 1.1%. The business claims to have completed its 4G rollout, now providing an outdoor coverage of 99.8% and an indoor coverage of 98.1%. Smartphone penetration on Proximus’ network increased to 73%, with a 4G penetration of 63% at the end of the year. In total, there are just over 6 million mobile subscriptions.

On the content side, football is the big focus here. During the year, Proximus renewed the Belgian professional football broadcasting rights on a non-exclusive basis and announced the extension of its exclusive coverage of the UEFA Champions League to the next three seasons. The team also announced plans last month to launch Stingray Hits, a new music video channel focusing on local and international artists. The TV business currently has 1.56 million customers, a net gain of 71,000 subscriptions across the year.

As far as telcos go, Proximus seems to be in a relatively solid position with a good subscriber base and a solid content business. The loan from the European Investment Bank to complete the fibre rollout could be the last piece of the puzzle needed.

Ericsson looks to Belgium to justify 5G

Ericsson and Corda Campus have announced plans to set up a 5G Life Campus in Hasselt, Belgium, which will be used to test new technologies and applications.

The 5G Life Campus will be located at Corda Campus, a technology park, and connected to connected to Ericsson’s R&D centre in Aachen, Germany, where Ericsson’s 5G pilot projects are executed. The campus will act as a test environment for industry players to develop and trial new applications for the 5G world.

“Corda Campus is a high technology campus, where more than 200 innovative companies work on new products and services every day,” said Raf Degens, Director of Corda Campus. “With Ericsson, this 5G Life Campus will provide industries a way to prepare for the future and grow faster.”

“Ericsson and Corda Campus will engage Belgian enterprises to be key players in the development of 5G, helping to speed up industrial digitalization in the country and Europe,” said Saskia Van Uffelen, Country Manager of Ericsson Belgium and Luxembourg. “This 5G Life Campus, part of the 5G for Europe program launched by Ericsson and industries and institutes across Europe, will help contribute to Belgium’s future economic growth and job market.”

The launch of the park is set for the first quarter of 2018, as pressure comes down on vendors to demonstrate the value of 5G. There is no question it will be better than 4G, though operators are seemingly starting to get cold feet as the commercial launch date approaches. Over the next 12 months you should expect more of these test sites to emerge as vendors attempt to pry open operators wallets to spend on network upgrades.

Liberty Global makes another big European R&D investment

The Telenet Innovation Center in Brussels joins and equivalent R&D hub in Amsterdam as Liberty Global tries to get ahead of emerging tech trends.

Belgian operator Telenet is owned by Liberty Global and has b identified by its parent company as a good place to mull over the challenges and opportunities presented by emerging tech megatrends such as 5G and IoT. It joins Liberty Global’s Tech Campus near Amsterdam and the two will also investigate other tech opportunities for the group.

“The opening of the Telenet Innovation Center is an important milestone for Liberty Global,” said Balan Nair, Liberty Global Chief Technology and Innovation Officer. “The cutting-edge infrastructure and Telenet’s fully owned mobile network provide the perfect conditions for us to test the products and services that can pave the way towards the GIGAWorld. I’m already excited about the opportunities and inspiration that await us.”

“With the Telenet Innovation Center, we want to be ambitious and bring our own innovations to a higher level, but also help shape external innovation projects,” said John Porter, CEO of Telenet. “I believe in the absolute strength of partnerships, so I am convinced that with our model of collaborative innovation and with the help of partners like ZTE, we can bring the best broadband and media technology to Belgium for thorough testing, experimentation and successful launch in our market.”

Paolo Pescatore of CCS Insight popped over for the grand opening. “For Liberty Global, this is a huge investment,” he said. “It shows a strong commitment to grow its presence in the rapidly changing and converging European landscape.

“Consumers’ insatiable appetite for connectivity and content is showing no signs of easing up. Cable and telecom providers’ are under huge pressure to stay at the forefront of innovation. They need to move at lightning speed as online giants are pushing boundaries even further. The increasing demand for IoT solutions and the arrival of 5G, opens up a wealth of opportunities and it is important that the networks are equipped to deal with the explosion of data traffic and to serve the emergence of new use cases.”

Among the stuff showcased on the day was a special demo room for ZTE, which as we heard is a close partner of Telenet. There was also the good old AI robot, which as you can see from Pescatore’s tweet below, managed to get a crucial question right.