Faster isn’t always better – O2

With a new Opensignal report suggesting O2 has the slowest download speeds of the UK MNOs, the telco has hit back suggesting experience is about more than just speed.

According to the report, O2 has the largest proportion of customers experiencing slower speeds across the UK. This is down to a number of different factors, one of which is how spectrum holdings have shaped 4G deployment strategies.

The image below outlines what percentage of customers are experiencing different speeds across all the UK MNOs.

Openreach 1

While this might not paint the prettiest of pictures for O2, the telco has pointed out faster is not necessarily better.

“O2’s network deployment is focussed on customer experience and demand rather than maximum capabilities of certain aspects of network performance such as download speeds,” an O2 spokesperson said. “Some of the most popular mobile applications such as playing the game Fornite or streaming high definition content from Netflix require around 3-5 Mbps.”

Such is the obsession with speed, the entire telco industry is built on the concept of ‘bigger, faster, meaner’. Performance of telcos are measured on average speeds, however, one should perhaps question what speeds are necessary to produce the desired customer experience. Sometimes 10 Mbps is all that is required.

“We continue to invest £2m every day to improve the network experience for our customers as well as using a combination of technical and customer insight to gauge how well the network is performing and how satisfied customers are with their service. For the second year running O2 recently won uSwitch’s 2019 award for best network coverage as voted by the public and continues to have among the lowest levels of churn in Europe.”

In fairness to O2, you can’t argue with the numbers. In terms of market share, O2 is the leading telco in the UK. It must be doing something right otherwise how would it maintain this position? It isn’t the cheapest, the fastest or one which can offer any sort of convergence offering.

This second image from Opensignal indicates the spectrum holdings which are being utilised by each of the telcos.

Openreach 2

As you can see O2 is heavily reliant on the sub-1 GHz bands. The advantage of this band is greater range and better indoor coverage, though there is a trade-off when it comes to speed. And while some might complain about the lack of horse-power, it doesn’t seem to matter than much at the end of the day.

In the last financial results, O2 boasted of year-on-year revenue growth of 5.3%, a total subscription increase of 2.3% and customer churn of 0.9%, the lowest in the market, it claims.

What is worth noting is this is relevant for today. This might seem like an incredibly obvious statement, but developers are constantly bringing out new applications which test the boundaries of acceptability. Video and more immersive gaming content are ensuring demands on the network, and capable speeds, are a constant threat.

For the moment, this position from O2 seems perfectly sustainable, but how long the status quo lasts remains to be seen. Speed is not necessarily the defining factor of experience today, as long as fast is fast enough.

South Korea adds 260k 5G subscribers in one month

Sceptics will suggest consumer 5G launches will fall flat, an answer to a non-existent problem, but 260,000 subscriptions after one month suggests there is an appetite for 5G in South Korea.

Having jointly launched 5G services on April 3, the three South Korean operators are boasting total subscriptions of 260,000 according to Yonhap. This is not to say the service has been perfect, there have been plenty of problems for the telcos to deal with, but this was always going to be the case. The problem with being first is that you get to tell everyone else about the challenges.

“Many of the initial complaints raised by consumers are being addressed, but with more people using the system, other problems are expected to come to light that will require fixing,” the Ministry of Science and ICT said in a statement.

While much of the 5G attention has been directed towards the US and China, it is easy to overlook the progress which has been made in South Korea. This is the first country to have launched 5G at scale, with the Government boasting 54,202 base stations have not been deployed, up from 3,690 on April 22.

For the moment, coverage is limited to the more densely populated regions of the country, primarily in the capital Seoul, but progress is certainly impressive. Even puts the bragging telcos elsewhere to shame. South Korea has been trundling along without boasting too loudly and the success is quite clear.

Of course, what you have to remember is that scaling 5G in South Korea is a much simpler task than in other leading nations. As 5G makes use of shorter-range spectrum, network densification is a massive contributing factor to success, and you can see from the table below the task is a lot easier.

South Korea USA China
Population 51.47 million 327.17 million 1.4 billion
Land mass 100,363 km2 9,833,520 km2 9,596,961 km2
Population density 507/km2 32.8/km2 145/km2
GDP per capita $41,416 $62,518 $19,520

All four operators are awarded 5G licences in Japan, with security conditions attached

NTT DoCoMo, KDDI, Softbank, and Rakuten have all received the 5G licences they applied for, but they come with coverage obligations and security commitment.

The Ministry of Internal Affairs and Communications announced on 10 April (in Japanese) that all the four applicants have been awarded radio frequencies and licences to rollout 5G services. Each licensee is awarded 400MHz spectrum on the 28GHz frequency, while three of them are awarded 200MHz on 3.7GHz except Rakuten, which has requested 100MHz.

All the operators are going to roll out 5G services starting in 2020. NTT DoCoMo, KDDI and Softbank will launch the service in spring time, with Rakuten planning to open its service in June. The total investment planned by the operators to the end of 2024 amounted to Yen 1.6 trillion ($14.4 billion).

While both NTT DoCoMo and KDDI have pledged to cover over 90% of the country within five years, Softbank only plans to cover 64% of the country and Rakuten 56%. The minimum requirement from the government is serving every prefecture within two years, and at least 50% of the whole country within five years, calculated by the number of geographical blocks the networks will cover out of the total 4,500 blocks the Ministry divides the country into.

In addition to coverage requirement, the Ministry has also attached a dozen granting conditions (pp.16-17 of the summary, in Japanese), including commitments to expand optical fibre networks (#2), to improve safety measures to minimise outage during natural disasters (#3), to prevent interference of existing radio licensees (#7) etc.

The item that may raise eyebrows is Item 4 on the list, which requires the operators to “take appropriate cyber security measures including measures to respond to supply chain risks” (unofficial translation). It refers to earlier regulations including the “”Information and telecommunications network safety and reliability standards” published by the Ministry of Post and Telecommunications in 1987, “Common Standards Group for Information Security Measures for Government Agencies and Related Agencies” issued by the National Information Security Center (NISC) in 2018, and the cross-departmental “Agreement on IT procurement policy and procedures for goods and services” published on 10 December 2018.

The last two documents, though neither of them names any particular countries or brands to be excluded, have been broadly recognised as the Japanese government’s decision to ban companies like Huawei and ZTE from public sector procurements. By invoking these regulations, it may not be too much of a stretch to read it as a message to the operators to stop using equipment supplied by the Chinese vendors. This may not cause serious disruptions to the operators’ business though, as Softbank, the only operator that has Huawei equipment on its network, is already planning to swap for Ericsson and Nokia, Nikkei reported earlier.

Japanese 5G licensees

Amazon gets into the satellite connectivity game

All the cool kids have low-orbit nanosatellites these days and Amazon is not about to miss out on the latest connectivity fad.

The news comes courtesy of some pro sniffing about from Geek Wire, which spotted a bunch of new filings made with the International Telecommunications Union last month via the FCC by a company called Kuiper Systems. The dogged hack followed his hunch and got in touch with Amazon to see if it was involved and got the following response.

“Project Kuiper is a new initiative to launch a constellation of low Earth orbit satellites that will provide low-latency, high-speed broadband connectivity to unserved and underserved communities around the world. This is a long-term project that envisions serving tens of millions of people who lack basic access to broadband internet. We look forward to partnering on this initiative with companies that share this common vision.”

It seems to be very early days for this project, but if Amazon’s behind it you can be sure it will be well funded. Furthermore Amazon founder Jeff Bezos has always had a thing for space and has his very own rocket company called Blue Origin. It’s too early to say whether Bezos will get Blue origin to launch the Amazon satellites but you’d presumably get short odds on it.

As we recently found out from talking to nanosatellite startup UbiquitiLink, low-orbit satellites are handy because they don’t suffer from the kind of latency issues regular geostationary ones do. However you need a lot more of them to achieve the same area of coverage, hence the whole nanosatellite thing.

Loads of other companies seem to be thinking this is a promising business to get into, mainly to provide connectivity to remote areas but, if you’ll excuse the pun, the sky’s the limit. It’s not immediately obvious what the return on investment is on lobbing a bunch of satellites into space to help people who live in the middle of nowhere get online, but they’ve presumably given it some thought and reckon the sums add up.

Farmers lobby group pushes for rural roaming

The Country Land and Business Association (CLA) has urged the UK Government and industry to push for a rural roaming mechanism to improve 4G coverage and close the digital divide.

While it might sound like a good idea to bridge the economic and societal chasm created by the digital divide, it is immensely unpopular when you talk to most of the operators. It would, theoretically, improve coverage across the rural communities of the UK, though telcos have suggested it would stifle investment and deployment plans.

“Since 2002 the CLA has been campaigning for a universal pledge on digital connectivity and we’re delighted to finally see this on broadband,” said CLA Deputy President Mark Bridgeman. “While we need to wait to see how this is met, great strides have been taken towards unlocking the potential of the rural economy.

“We need to learn the lessons from the successes with broadband where government and stakeholder consensus, as well as leadership by the regulator, achieved real wins for those who live or work in the countryside. There is no reason why a similar approach should not be applied to rural 4G, starting with forcing mobile operators to adopt rural roaming.”

The idea of rural roaming is a relatively simple one; subscribers would be able to use available 4G networks irrelevant of their own provider. This effectively means telcos would have to carry rival’s traffic without seeing any monetary gain for the effort.

The telcos themselves, or at least some of them, argue the idea of rural roaming would be a negative for network investment. A situation could be created where all the telcos are sitting on the starting line, each waiting for a competitor to make a move. Such is the pressure on CAPEX budgets, no-one would want to waste a penny, and why splash out on expensive infrastructure when you can just benefit from a competitor’s expenditure.

The CLA is not an organization which will care about the financial plight of the telcos, this is a lobby group which represents rural businesses and landowners, therefore this argument will be a moot point. That said, the Government will certainly be sensitive to the investment capabilities and ambitions of the telcos, especially considering the importance this segment will play in the future success of the economy.

In an effort to counter the rural roaming plug, the industry has reportedly offered an alternative. Using Ofcom as an independent adjudicator, a marketplace will be set-up allowing the telcos to trade physical assets. If O2, for example, want to put radio equipment on an EE mast, EE must be offered the same privilege in an area of interest as payment.

The argument from the telcos will be this does not ‘penalise’ proactive deployment, creating more value in rolling out infrastructure, whilst also creating the collaborative industry which the Government is keen to foster.

Should the Government want to pursue rural roaming, the telcos will have to be dragged into the room shouting and screaming. This does not seem to be the best approach to encourage investment, and we suspect a scheme more closely aligned to telcos alternative will bear fruit.

BT pleads for open access to street furniture

BT is attempting to rally the industry in an attempt to convince local authorities to ditch the current exclusive concessions model in UK cities in favour of an ‘Open Access Model’.

As it stands, many local authorities operate a concessions model which grant a single player exclusive access to council-owned street furniture, such as lamp posts, to place mobile network equipment. This might seem attractive to the councils from a revenue perspective, but BT is arguing this will be to the detriment of the digital economy in the long-run.

“While the concessions model made sense in the early 2010’s when it first came into common use, the market and regulatory landscape have changed, and it’s become clear that exclusivity agreements act as a barrier to further 4G and 5G investments,” said Paul Ceely, Director of Network Strategy for BT.

“Government initiatives such as the DCMS Barrier Busting taskforce are showing the way, but we believe that industry needs to act. We are leading the way by handing back exclusivity in nine key areas.”

BT currently operates nine exclusive concessions (Glasgow, Cardiff, Brighton, Plymouth, Carlisle, Newcastle/Gateshead, Nottingham, Gloucester and Leicester) and is proposing to end these contracts should the result be an open access environment. The new model would grant all mobile operators and infrastructure companies access to street furniture, paying the local authorities a flat, consistent rate.

Although it is not a new gripe, the bureaucratic and regulatory environment across the UK has once again been blamed for connectivity problems. Almost all the operators have had a moan at the red-tape wrapped regulatory landscape at one point or another, but an open access model would appear to be a sensible step forward to encourage improved mobile coverage and experience.

However, what should be worth noting is there are authorities who have made progress in this area without prompts from industry.

“One of the reasons why the West Midlands was chosen as the location for the UK’s first region-wide 5G test bed was our commitment as a region to do what it takes to work with operators to get the 5G networks we need built in the fastest, fairest and most cost effective way,” said Henry Kippin, Director of Public Service Reform at the West Midlands Combined Authority.

“The timing and spirit of this Open Access initiative is ideal as we will make faster progress through operators and public services working together to a shared agenda so that 5G can fulfil its full potential in driving economic growth that can benefit all our diverse communities.”

While some small-minded public servants might point to the lost revenue when ending the exclusive concessions, you have to look at the long-term benefits. The West Midlands is now home to numerous 5G test beds, R&D facilities and is home to hubs of excellence for emerging technologies.

Whether the local authorities pay attention to logic is an entirely different matter, but any suggestions to decrease the red-tape complications of UK bureaucracy should be welcomed by all.

Nanosatellites could be the answer to mobile not-spots

Start-up UbiquitiLink reckons it’s cracked the challenge of affordable satellite connectivity to regular handsets through the use of nanosatellites.

You can’t use traditional geostationary satellites to fill regular cellular coverage gaps because they’re too expensive and are positioned 35,000 km above the surface of the earth, which is way further than cellular signals are designed to go and introduces excessive lag to the signal. An obvious solution is to use satellites at a much lower orbit, but until now that hasn’t been economically viable.

UbiquitiLink reckons it has the answer to this conundrum and went to MWC last week to tell everyone all about it. We spoke to CEO Charles Miller to hear directly what’s so different about what his company’s doing, compared to the traditional satellite connectivity business.

A key development seems to be the evolution of the satellite business, of which Miller is a veteran. It’s apparently a lot cheaper to build a satellite these days, using off-the-shelf components and assembly lines. This makes the production of large numbers of smaller satellites – nanosatellites – relatively affordable for the first time.

The ideal altitude for a cellular satellite is around 500 km, it seems – 70 times closer to earth than a geostationary one. But at that height the area covered is much smaller, hence the need for more of them. The cost of launching these into space is apparently coming down rapidly too, thanks to billionaire entrepreneurs like Elon Musk and Jeff Bezos.

One more challenge is the fact that mobile phone protocol apparently never expects to have to transmit further than 35 km from a terrestrial base station thanks to the curvature of the earth. In order to be able to use regular protocols and spectrum, Miller said his company has developed some kind of hack that prevents your phone freaking out when it has to deal with much more lag than it’s expecting (although imperceptible to us mere humans, we’re told).

UbiquitiLink has already launched a bunch of these nanosatellites 500 km into space and is now ready fill those not-spots. Its business model is to sign roaming deals directly with MNOs, who will then offer the service to their punters when regular connectivity isn’t an option. At first it will just offer messaging, but move into data when things ramp up.

This seems like a pretty major undertaking that will need to generate a lot of business before it sees significant ROI. But we’re not aware of anyone else claiming to have cracked the satellite cellular connectivity market so Ubiquitilink seems to have first mover advantage and the total available market would appear to be pretty big. Here’s a diagram illustrating its proposition.

Ubiquitilink graphic cropped

TIP 2018: what’s in it for Facebook?

At the Telecom Infra Project Summit 2018 we spoke to the Facebook execs behind the initiative to find out why they decided to get involved.

When Facebook first started talking about getting involved in in the telecoms industry via TIP and even developing novel wireless technologies such as Terragraph, it felt like a frustrated OTT going through the motions to light a fire under the sector. Facebook’s vested interest was clear: the better and more ubiquitous the connectivity, the more people will use Facebook.

As we explained earlier, a big part of this involves efforts to make telecoms infrastructure cheaper to buy, roll-out and maintain. In that respect TIP is a direct threat to the traditional big kit vendors, not only because tower networking costs probably equate to lower profits for them, but a major aim of TIP is to expand the whole telecoms ecosystem, thus creating additional competition for them.

In a couple of small media gatherings at the event we spoke to Jay Parikh, Head of Engineering and Infrastructure at Facebook, and VP of connectivity Yael Maguire. Parikh explained that TIP is not just a product of Facebook’s own connectivity needs but also of conversations he was having with operators two or three years ago in which they implored Facebook to get involved.

The biggest mutual problem faced by Facebook and the operator community is the exponential growth in traffic over networks combined with the increasing difficulty and cost of providing it. “We were worried that innovation was slowing down,” said Parikh, in reference to the collective concern felt at the time, one which the big kit vendors were failing to sufficiently address.

In response to persistent questioning about the return Facebook expects to get on its significant (but unspecified) investment, Parikh insisted that this isn’t a short term thing for his company. The strategic objective is to catalyse the telecoms industry and ROI will be gauged by the presence of novel connectivity innovation, as opposed to direct financial considerations.

It’s easy to be sceptical any time a company claims to be doing something for the greater good, but equally this would be a strange area for Facebook to diversify into if it was only looking for a new profit centre. Having said that the world’s dominant etailer now makes much of its profit from its cloud business so you never know.

Parikh kept his cards pretty close to his chest regarding any TIP financial metrics but it’s relatively easy to believe that a cash-rich Silicon Valley company might be prepared to spend money a bit more speculatively than a traditional outfit. Facebook considered its own fortunes to be intrinsically allied to those of the global telecoms industry, so helping it innovate is viewed as sufficiently self-interested by itself, for now at least.

When asked what the top priorities are for Facebook from TIP, Parikh cited the connectivity insights programme, which aims to give operators additional data to help operators make informed decisions derived, in part, from anonymised Facebook user data. Rural access work is also important as Facebook seeks its next billion users, and Telefónica’s work in Peru was cited as an example of this.

The third priority is Terragraph, which is positioned as an alternative to fixed wireless access delivered over unlicensed 60 GHz spectrum, of which there is plenty, with an emphasis on backhauling wifi. This is a key concern of Maguire’s, who noted that average video speeds are declining across the board thanks to the aforementioned imbalance between demand and supply.

Maguire explained that Terragraph started as a project designed to look into the viability of using the 60 GHz spectrum for backhaul. At such a high frequency there are a bunch of propagation challenges, with even oxygen itself contributing to signal degradation. But it turns out that if you get the precise line of sight alignment right and don’t try to transmit any further than 200m, then it can be used in much the same way we’re talking about FWA over mm wave for 5G.

In keeping with Facebook’s general tone on this stuff Maguire played down any direct antagonism between Terragraph and mm wave FWA, insisting they just wanted to offer up alternatives. I was also keen to stress that this technology is specifically intended for high bandwidth wireless backhaul. “It’s not a solves all problems technology,” he said.

So, in summary, Facebook says it’s not looking for any immediate return from its involvement and investment in TIP. Instead it expects to benefit from the telecoms industry innovating as a faster pace than it would have if Facebook hadn’t decided to get involved. Aside from justifiable scepticism about any company being so sanguine about immediate, demonstrable ROI there’s little reason not to take Facebook at face value on this, while also keeping a watchful eye out for mission creep as things progress.

Two tiers very evident in US telco rankings

OpenSignal has released some more granular insight on the performance of the top four telcos in the US and it is very clear there are two tiers; Verizon and T-Mobile US are best-in-breed, AT&T and Sprint are not.

When the firm released its State of Mobile Networks in the US report T-Mobile US was recognised as the leader for pretty much everything, but when you look deeper into the statistics in the individual regions, the competition is a lot closer than top-line figures would suggest. Verizon beats T-Mobile US in some areas, is level in others and not far off the pace in the rest.

While the leader in the race is a lot closer than perhaps it might have been initially presented, what is clear is that AT&T and Sprint are not in the same league. The tables below demonstrate this point quite effectively.

OpenSignal 4G

On the availability side of things, the distinction between first and second tier is very clear. What should be noted is that the last 12 months have seen a great level of improvement from Sprint and the team has said it will continue investments to improve this coverage. Perhaps it will close the gap over the next year, but that is not a promise it will be able to compete on the speeds front.

Interestingly enough, while the US is one of the best in the world for 4G coverage, it doesn’t compete on the global stage when it comes to download speeds. Again, we can see there are two tiers in the operator rankings when it comes to speed with T-Mobile establishing a bit more of a buffer over Verizon in the top tier, but the overall average falls below the 16.9 Mbps global average. Admittedly, many of the countries above the US are smaller and do not face the same challenges when it comes to geographical variety, but this is a pretty poor performance from a country which claims to be at the front of the digital revolution.

A couple of weeks back we noted the companies who are performing best in their individual markets are the ones which are investing in their networks and not getting distracted by other more colourful ventures. This is another story which adds credibility to the theory. With 5G just around the corner, we would hope AT&T doesn’t get drawn into a long and bitter legal battle with the Department of Justice over its acquisition of Time Warner as that could spell disaster for its standing in the 5G world.

Ofcom pats UK MNOs on the head for doing what they’re told

UK mobile operators vowed to hit Ofcom’s 90% geographical voice coverage target by the end of last year and they have. Good operators.

To commemorate this touching gesture of compliance Ofcom has written to each of them to say well done in a manner reminiscent of getting a commendation from a teacher. The specifics of the letters involve acknowledgment of their previous letter claiming to have done what they were told and confirming that Ofcom doesn’t think they were lying.

There are some intriguing variations within those letters, which detail the extent of UK geographical coverage by each MNO and even the date they sent their letter of claimed compliance. As you can see from the table below Vodafone, O2 and Three were all comfortably over the 90% threshold, and send their letters with plenty of time to spare. For EE, however, it seemed to go down to the wire and it just crept over the line at the 11th hour.

UK MNO geographical coverage

Inevitably Ofcom doesn’t want operators to rest on their laurels. There will be a 700 MHz spectrum band auction in 2019, we’re told, and Ofcom is proposing that spectrum should come with rural coverage strings attached. The precise nature of those strings wasn’t detailed but a balance needs to be struck between doing the right thing and turning that spectrum into a chalice, poisoned with onerous obligations.

Lastly Ofcom has published a document entitled ‘Enabling 5G in the UK’, which features a bunch of measures and top-tips designed to, well, enable 5G in the UK. 5G is the next generation of mobile technology, we’re informed, and Ofcom feels an obligation to muck in to the collective effort.

Apart from encouraging everyone with periodic pats on the head, Ofcom wants to make yet more spectrum available for 5G fun. On top of the aforementioned 700 MHz action and the stuff due to be bid on this year, Ofcom also wants to dig up some 3.6-3.8 GHz spectrum for auction in 2019. Apart from that 26 GHz seems to be the targeted millimetre wave band and there are some vague aspirations for 66-71 GHz too.

Ofcom 5G spectrum plans

There are some other initiatives, such as trying to make accessing base station sites easier, helping out with backhaul by stimulating fibre investment, and making sure European net neutrality regulations don’t get in the way of network slicing. On the whole this set of announcements paints a plausible picture of Ofcom being on top of things, which is presumably one of the main reasons for issuing it.