Tory leadership favourite makes 2025 FTTH commitment

Former-Foreign Secretary and the favourite to be the UK’s next Prime Minister Boris Johnson has undercut DCMS and Ofcom commitment for full-fibre by eight-years.

Writing an op-ed piece for The Daily Telegraph, Johnson (BoJo) has suggested his government would commit to delivering fibre-to-the-home (FTT) broadband connectivity to 100% of the UK population by 2025, beating out current commitments by eight years.

“Think what we could achieve if the whole country had the same lightning access to this essential tool of progress,” BoJo stated. “If the Spanish can do it, why can’t we? Let’s say goodbye to the UK’s manana approach to broadband and unleash full fibre for all by 2025.”

As it stands in the Future Telecoms Infrastructure Review (FTIR), the UK Government has targeted full-fibre broadband for all households by 2033. This might sound like a ludicrous amount of time, though it is the final 10% which is envisioned to be the most difficult. There has been progress in upgrading the UK from copper to fibre, though the UK does seem to be falling behind other European nations.

According to the latest statistics from the Fibre to the Home Council Europe, 1.5% of UK subscribers have adopted fibre services. The industry is suggesting 7% availability of fibre services, while the Government is targeting 15 million premises to be connected by 2025. Steps forward have been made, albeit smaller ones than the likes of Spain, Latvia, Lithuania and the Nordics.

The issue with connecting all of these homes is down to the commercial gain for the telcos. When you get to the rural regions of the UK, delivering FTTH, or even fibre-to-the-cabinet, is not commercially attractive. Not only do you have to worry about the raw materials, there is the complication of civil engineering and the difficulties of navigating the red-tape maze of local authority governance.

This is why the Government is not worried about the first 90% of UK premises, but it is the final 10% which everyone should be concerned over. To connect these final premises, the telcos would have to be encouraged with public funds, as the commercial gain is seemingly below-par.

“But when I mentioned another priority of mine – almost casually – those farmers smote their weatherbeaten hands together and roared their assent,” said BoJo. “They want better broadband. They are indignant at the current failure to provide it – and they are absolutely right.

“A fast internet connection is not some metropolitan luxury. It is an indispensable tool of modern life. You need it for your medical prescription, for paying your car tax, for keeping up with the news and with your family and friends. It is becoming the single giant ecosystem in which all economic activity takes place. It is the place you find bargains. It is the place you find customers.

“It is not only the place you can find a job. It is the means by which you can be interviewed, and your talents uncovered, without incurring the cost of a rail ticket. If your area has a truly fast broadband connection, that area will be a better place to live, to invest, to set up a business; and that area will have a better chance of retaining talented young people and allowing them to start-up businesses and bring up their families.”

Undercutting Government objectives is of course a good way for a leadership hopeful to gain column inches and woo party members, many of whom will live in the more affluent rural areas, but is it actually possible? BoJo has already faced criticism because of dubious claims, just think back to the £350 million a week savings which was emblazoned across the bus during the Brexit campaign.

Telcos can of course be coerced into getting on with their jobs faster than they would like to, but this is an arduous process; the telcos have become masters of stubbornness. And as you can imagine, BoJo has been light on details as to how this accelerated rollout would be achieved, simply stating it would require more government investment.

So here is the question; does BoJo genuinely believe he can speed-up the transition to a fibre diet, or is this another suspect claim which will lead to another member of the general public taking him to court?

Telenor and PCCW question the need for speed

There are telcos who are rushing to launch 5G services, there are some who simply aren’t ready and there are a few who don’t seem that bothered right now.

During a panel session at 5G World, an interesting point was put forward by both PCCW and Telenor; if you don’t need 5G, why bother rushing to the finish line?

PCCW Group CTO Paul Berriman pointed to the current state-of-play. Data consumption is increasing, though the network is not being strained as it is elsewhere. Hong Kong as an incredibly high penetration in terms of FTTH, so the fixed wireless access usecase falls through. PCCW is also waiting on the release of 3.5 GHz spectrum, which will add impetus to the 5G mission. Right now, Berriman doesn’t feel that compelled to act as the business case is yet to present itself.

Telenor is taking a similar stance, in the sense it is not being rushed. Ingeborg Øfsthus, CTO of Telenor Norway, pointed to the tsunami of unknowns. The maturity of the technology is a worry, as is the development of the business cases. Øfsthus said the team does not have the pull from the verticals to rush a launch, and while there are some interested parties, there would have to be demonstratable scale before they are interested.

Another interesting factor to consider is the disruption to the management of a telco as a business.

“The real challenge for us is to go from 3,000 base stations in Hong Kong to 30,000 base station,” said Berriman. “Going from 4 million smartphones to 40 million connected objects. Going from $20 ARPU to $2. We need to understand the business model behind it.”

The drive towards 5G has been breathless for some, but there are telcos who are waiting for the right conditions before entering the fray; the ‘built it and they will come’ attitude is not being shared by everyone.

“It is early in the cycle, but it is evolving rapidly,” said Channa Seneviratne, Executive Director at Telstra.

Seneviratne suggested Telstra was one of the first companies worldwide to launch 5G, but this was entirely based on circumstance. With 60-70% year-on-year growth on data consumption, Seneviratne couldn’t afford to sit back and wait for the technology to mature or the business case to be fully understood; the demand for capacity-offloading was today.

Another interesting case of rapid deployment is with Elisa. Here, VP Of Telco Efficiency Kirsi Valtari said 5G is absolutely perfect for their business model. Elisa operates slightly differently, selling unlimited tariffs which are tiered on download speeds. The faster download experience you want, the more you pay, but you never run out of data. 5G just allows them to create more products and expand horizons.

While desire for 5G keeps everyone busy assessing who has launched the fastest, it is always worth remembering that sometimes it just isn’t necessary.

Bahrain surges forward with 5G innovation hub ambitions

The Kingdom of Bahrain has announced itself onto the global 5G stage, claiming to be one of the first countries globally to provide commercial 5G services by June 2019.

Bahrain has not exactly been thumping its chest with rhetoric and bold statements to date, but Minister of Transportation and Telecommunications, Kamal bin Ahmed Mohammed now claims preparations for the rollout of 5G networks are finished, with the only missing piece of the puzzle being the availability of consumer handsets and equipment.

“Bahrain’s state of readiness is a testament to the leadership of the Government of the Kingdom of Bahrain in enabling the implementation of cutting-edge technology and promoting innovation, and the continuous support of all stakeholders including the TRA and the national Spectrum Strategy & Coordination Committee (SSCC), all of which serves to highlight the Kingdom’s continued role as a regional leader in telecommunications and ICT,” the Minister stated.

The regulatory hurdles have been cleared, while licensing and spectrum allocation set to be finalised by mid-April, operators are already well on the way to rolling out the relevant infrastructure. Whether this actually means nationwide geographical coverage remains to be seen, but the country is gearing itself up to claim the title of one of the 5G leaders.

There might be a few who would scoff at the idea of Bahrain taking the lead in the 5G race, but it should come as little surprise. Bahrain has ranked first in the Arab region in the ITU’s ICT Development Index (IDI) for the last five years, and 4th globally in the UN’s Telecommunications Infrastructure Index (TII). The Bahrain Government might not have been making too much noise over the last couple of years, but it is in a strong position.

In June last year, successful commercial trials for 5G were completed, while the National Broadband Network (NBN) has ensured fibre connectivity is spread throughout the nation. By the end of 2019, the Government plans to reach 95% of households and 100% of businesses. While this does support the development of other usecases, the side benefit of having suitable backhaul infrastructure supports the 5G ambitions also.

Although it is relatively unfeasible Bahrain will be able to use these foundations to dominate the global technology economy, it could prove to be an incredibly useful resource in attracting new businesses. Like San Marino, another nation state which will experience 5G before the vast-majority, Bahrain could position itself as a test bed for numerous different segments, from autonomous vehicles to virtual reality. The right foundations are certainly in place.

As it stands, Bahrain is in an enviable position. The red-tape has been suitably ordered, the networks are almost ready, it just needs the launch of more consumer devices. How many countries can say that?

Vodafone and O2 UK buddy up over 5G infrastructure sharing

Vodafone UK and Telefonica UK (O2) will be entering into a new infrastructure-sharing relationship ahead of the much-anticipated 5G rollout.

The duo already has an existing relationship for shared infrastructure activities, managed through the Cornerstone Telecommunications Infrastructure Limited (CTIL) joint venture, with this extension to include 5G at joint radio network sites. In theory, such a tie-up will allow the pair to accelerate 5G rollout plans over the coming months.

“We believe that these plans will generate significant benefits for our business and our customers as we move into the digital era of connected devices, appliances and systems on a mass scale,” said Nick Jeffery, CEO of Vodafone UK. “Customers will benefit from the best 5G experience available and we will deliver even faster speeds by using our spectrum holding more effectively.”

“I’m excited by the potential of these plans to meet the future needs of our customers while delivering value for our business,” said O2 CEO Mark Evans. “In addition, these plans would allow us to utilise the spectrum we acquired in the last auction very effectively.”

Looking at the 5G ambitions, both companies are being relatively coy with the specifics. Vodafone has confirmed it will launch commercial 5G services during 2019, exactly when is unknown though, while O2 has already stated it will not enter the fray until 2020. For Vodafone, some industry analysts have commented it is pitting itself in a race with EE, suggesting the launch would be at some point during early summer.

Perhaps this is an indicator of the importance of 5G scale. Being the first to market may not mean anything in the long-run, it’s a gimmick to include in advertising more than anything else, but nationwide deployment will be critical. O2 has a marketing leading position to protect, while Vodafone wants to recapture the fortunes of yesteryear. Clearly offering the 5G network with the widest coverage will be critical to winning subscribers once 5G vaults towards mass market adoption, and this partnership seems to have an eye on that.

As part of the agreement, more responsibilities will be devolved to the CTIL, allowing the JV to improve the efficiency of its operations and pursue opportunities to add further third-party tenants to the assets. The companies also intend to upgrade their transmission networks with higher capacity optical fibre cables, readying the infrastructure for low-latency use cases such as VR, while there is also an eye on future transmission operating model which could drive synergies for investment and operations.

Although trying to get telcos to play nicely with each other is a tricky task, the idea of shared infrastructure has been on Ofcom’s agenda for some time. It might create a bit of a red-tape maze in the first instances, though there are clear benefits to the concept.

“UK 5G roll-out is on the way and operators need to be more accepting of sharing infrastructure to ensure that coverage demands from consumers and businesses can be met as quickly as possible,” said Ingo Flomer, VP Technology at Cobham Wireless.

“Deploying new 5G networks typically require operators to install and maintain new antennas, hardware and cables, which requires significant planning, management and expense. By using one common architecture, operators can minimise cost and disruption.”

Fears the highly dense urban areas will be favoured over rural regions will certainly not be dismissed following this announcement as the cities are still much more attractive commercially, but with such partnerships the delay might not be as painful. A digital divide was created by the slow rollout of 4G, but shared-infrastructure relationships should ease this chasm, at least theoretically.

Shareholder attitudes on fibre are shifting – investor

Some telcos might have been afraid of committing to fibre deployment due to the vast expense and potential shareholder backlash, but attitudes are changing.

Over the last few years the need to invest in fibre has become increasingly evident, though progress is incredibly varied. Forward-looking telcos, Orange for instance, have been pumping cash into fibre deployment for years, while stuttering operators such as BT and Deutsche Telekom has chosen alternative technologies in an incredibly short-sighted move, maybe satisfy the bloodhounds in the annual general meeting, and the rising demands of the consumer.

While technologies such as G.Fast or vectoring might be appealing to the accountants, with the gigabit-economy around the corner, the shortfall is starting to look quite obvious. What was initially sold as a cunning move now looks to be nothing more than delaying the inevitable, with the overall result a net loss. But with attitudes towards fibre changing, the intensity of fibre rollouts might just increase. And it isn’t a moment too soon.

“We’ve seen the evolution of fibre as an asset class which is becoming much more accepted and more confidence in the take up and monetization potential of fibre,” said Chris Hogg, Investment Director at Amber Infrastructure, speaking on a panel session at Broadband World Forum in Berlin. “As an investor, we are getting a lot more confidence in the ability of the market to maintain the uptake level. It becoming a lot more visible and a lot easier to have confidence in these projects.”

Hogg’s position does offer him considerable credibility in making such comments, though he does work for a fund which specifically targets infrastructure projects and companies. This might not be the common attitude amongst the investor community. Kate McKenzie, CEO of wholesale network operator Chorus, does however confirm his position.

“We have definitely seen a change,” said McKenzie. “When we first started investors were sceptical about market adoption, but now investors are asking how they can go faster with the rollout.”

The issues from yesteryear were relatively simple. With profits being squeezed at the telcos thanks to the intervention and disruption of the OTTs, shareholders asked whether such vast expenditure on fibre was necessary. Firstly, did the network need such a facelift when it is dealing with the demands of the 3G and 4G world, and secondly, would the consumer appetite for fibre be there? Some investors doubted the business case, and these are the telcos who are falling behind when it comes to fibre rollout.

But what has changed over the last couple of years? Firstly, the consumer has demonstrated he/she is prepared to pay more for fibre connectivity. Secondly, new services emerged (Netflix for example), and new segments grew substantially (gaming) pushing the networks to the limit. Finally, 5G. The first point demonstrated there would be buyers for the new products, while the latter two suggested telcos would not even be able to offer adequate services unless the money was spent.

The takeaway here is simple; spend or die. Unfortunately for those who are late to the party, expenditure will squeezed into a smaller timeframe, while they’ll be playing catch-up in the time consuming task.

With 5G emerging, the investments in fibre become a little bit more palatable for investors however. With the incredible data rates promised with 5G, fibre is a necessity to ensure network performance. And while it might be able to act as a replacement for the last mile for broadband, fixed wireless access, the sites still need to be fibered up. It is as much an opportunity for connectivity as it is a threat to traditional broadband products.

“We’ll always need fibre to service the base stations,” said Dana Tobak, CEO of Hyperoptic, a UK fibre-to-the-premises broadband provider. “Some people think they’ll only need one connectivity technology in the future, but as our appetite grows, we’ll need more routes to the internet.”

For those investors who back fibre deployment plans over the years, well done. Those who were too timid, bad bet, there’s catching up to do now.

Regionalised monopolies or all-out competition? That is the question

It is always better to be a leader than a chaser, but sometimes you play the hand dealt. The UK is playing catch-up, but what is the right way forward; regionalised monopolies or bitter battle for the consumer?

This is a question which was addressed by Minister for Digital and Creative Services Margot James at the Connected Britain event this morning, and is currently being investigated by those running the Future Telecoms Infrastructure Review. The idea is to strike a balance between the two, but that is much easier said than done. Sitting on the fence, appeasing all contributors, is never a healthy situation.

As you can imagine, there are pros and cons for both sides. On the monopolistic side of things, the telco would be confident of capturing customers and therefore generating ROI. The rollout would be notably faster due to the guarantee of customers, either through direct-to-consumer services or wholesale, but then there is a risk of another Openreach saga being reached.

Looking at all-out-competition, the consumer wins as there would be a heated battle on price and performance to capture revenues, but deployment will be much slower. Telcos would have to spread investment further over different regions, while also not having the same level of confidence in securing revenues.

There are of course other options, collaborative investments in networks is one which springs to mind, though we are not entirely confident in the telcos ability to place nice with each other. The Future Telecoms Infrastructure Review will provide more insight, but the government is staying suitably tight lipped there.

“We are a matter of weeks away from delivering the review, I have the unenviable task of telling you the government’s view without telling you the government’s view,” said Raj Kalia, CEO of BDUK, the government department responsible for overseeing the deployment of future-proofed infrastructure.

While there was very little of substance said at the conference, pertaining to the review that is, we got the impression the government will be leaning more towards the network sharing model. This will be the telecoms version of herding cats, but perhaps is one of the most sensible. Investment risk for the telcos is reduced, while there is still the opportunity to monetize. Depending on how the government intends to ‘stimulate’ deployment, there might still be an element of regionalised monopolies, but with multiple telcos contributing to the rollout, risk is reduced for the consumer on the other side of the coin.

One comment was directed towards the UK’s fantastic ability to conduct investigations and reviews, as a substitution for genuine action, but all eyes will be directed towards the Department of Digital, Culture, Media and Sport, as well as the much lauded Future Telecoms Infrastructure Review over the next couple of weeks.

The 5G race to deployment…. but is it optimized deployment?

Telecoms.com periodically invites third parties to share their views on the industry’s most pressing issues. In this piece Chintan Fafadia, Director of Product Management, RF Solutions, PCTel, details some of the considerations that you should factor into your 5G deployment.

The promise of 5G is that it will usher in a new age of intelligent networking, encompassing both human communications and the Internet of Things. It’s a game changing technology but implementing it will push the wireless industry to higher levels of complexity in network deployment and management. The 3GPP (the standards body for 5G) defines three major applications for 5G, all of which have major implications for how 5G networks will be built and optimized:

  • Enhanced mobile broadband
  • Massive machine-type communications
  • Ultra-low latency

Achieving the intents of these applications will require upgrading the entire fronthaul and backhaul network. On the fronthaul part, the most challenging aspect of 5G from RF perspective is employing millimeter Wave (mmWave) frequencies to achieve higher capacity. The challenge with mmWave is that they have short range (200 m to 600 m), are affected by weather conditions, have very narrow beam widths and are directional. Industry trials and planned deployments currently focus on rolling out 5G both in existing sub 6 GHz bands (called FR1 bands in 5G nomenclature) and mmWave bands (called FR2 bands in 5G nomenclature) initially planned in the range of 24 GHz to 40 GHz.

Before we dive deeper into 5G and its proposed RF spectrum, it will be worthwhile to understand how the industry has evolved in terms of RF deployments and spectrum usage. First generation cellular networks were initially deployed globally on 850/900 MHz bands. As technologies progressed, newer bands at higher frequencies were identified for 2G and 3G rollouts, including 1700 – 2100 MHz bands. However, in the mid-2000s, this new higher-end spectrum was considered less desirable. The primary reason for this was that carriers were focused on coverage.

More recently, the focus has shifted to capacity. With the advent of LTE and the hockey stick curves in data requirements and utilization, the industry has struggled for more spectrum irrespective of its frequency range and propagation characteristics. In fact, spectrum ownership in the higher frequency ranges (>2000 MHz) is now considered an advantage for capacity requirements. Higher-frequency spectrum enables cell site densification because the radio waves do not travel as far, leading to reduced RF interference from nearby cell sites and these bands have wider bandwidths. Now, even higher-frequency spectrum in the mmWave frequency range is being pursued to meet the even greater data capacity demands of 5G applications.

Before deploying 5G in the 24-40 GHz mmWave band ranges, operators need to characterize the propagation profiles for these frequencies in the field. Such high frequencies can be highly susceptible to non-line-of-sight losses, body losses, losses encountered from moving objects like cars and buses, and foliage losses. Their characteristics will vary not only by the topology and the urban or rural environment but also by the construction material used in buildings in different areas of the world. Most operators are planning to deploy these technologies in highly dense urban environments or in-building environments as a capacity improvement tool or for use in fixed wireless deployments as the high-speed link for the last mile (or kilometer).

Accurately planning for these deployments will require wireless network design tools with propagation models that have been highly calibrated to numerous different conditions and are able to map the spectrum behavior for each one of them. These calibrations can be done using simulations. However, a higher level of accuracy requires highly accurate field measurements. These measurements are collected using highly calibrated tools like scanning receivers, which can collect data for multiple bands and technologies simultaneously. Accuracy in capturing these propagation profiles for use in 5G designs enables maximum usage of spectrum capacity, the most expensive asset of any mobile operator’s portfolio. Network quality is considered a leading cause of customer churn with a clear majority of cellular network issues coming from the fronthaul.  Consequently, improving network quality is a high priority which can result significant cost savings for operators in 5G deployments.

Another pre-deployment aspect to be considered for 5G is spectrum clearing. Whether the intended rollout is in the currently used sub-6 GHz bands (between 600MHz to 2.4GHz), in the newly proposed 3.5GHz to 4.9 GHz mid bands, or in the mmWave bands, operators will have to ensure clean spectrum on 5G frequencies before deployment. Test tools such as scanning receivers are extremely useful in such scenarios to cover multiple applications at the same time by collecting data for spectrum clearing along with model tuning needs.

While these are the challenges the operators will face before deploying a 5G network, the challenges they will need to overcome for optimizing their deployments will be even greater. 4G networks aren’t disappearing and will be around for at least another decade. 5G networks will be deployed either alongside existing 4G networks or on top of existing 4G networks, using multiple 5G Non-Stand Alone and Stand-Alone modes. These deployment scenarios, along with the plethora of options available for subcarrier spacing and channel bandwidths within the 5G bands, will all add to the complexity of 5G post deployment testing. In addition, there are many other aspects of 5G, including massive MIMO, fixed wireless access vs mobility, and numerous 5G applications, which we will cover in future posts. Stay tuned.

 

Meet PCTel and learn more about their solutions at 5G World 2018, taking place in London, 12 -14 June.