Amazon takes one small step for satellite connectivity

Amazon has submitted its application to the FCC to deliver home broadband services to rural communities in the US through its Kuiper Systems satellite programme.

In a filing with the FCC, Kuiper Systems, a wholly-owned subsidiary of Amazon.com, plans to deliver high-speed, low-latency broadband services to consumers, businesses, and other customers worldwide through a constellation of 3,236 satellites in 98 orbital planes at altitudes of 590 km, 610 km, and 630 km, us Ka-band radio frequencies.

Aside from providing broadband solutions to rural and hard-to-reach communities, the plan is also to enable MNOs to expand wireless services to unserved and underserved mobile customers and provide high-throughput mobile broadband connectivity services for aircraft, maritime vessels, and land vehicles.

While Amazon has plugged its bank account to entice the FCC, it is also leaning on its existing operations as a means to support the new venture. It has stated it has the ‘global terrestrial networking and compute infrastructure required for the Kuiper System’, as well as the ‘customer operations capabilities’ acquired through its various businesses from eCommerce through to AWS cloud computing.

It’s a comprehensive filing from Amazon, and we suspect it peak some interest at the offices of the FCC.

“The Kuiper System will deliver satellite broadband communications services to tens of millions of unserved and underserved consumers and businesses in the United States and around the globe,” the application states.

“According to the FCC’s 2019 Broadband Deployment Report, 21.3 million Americans lack access to fixed terrestrial broadband with benchmark download and upload speeds of 25 Mbps/3 Mbps, and more than 33 million Americans do not have access to mobile LTE broadband speeds of 10 Mbps/3 Mbps. Amazon will help close this digital divide by offering fixed broadband communications services to rural and hard-to-reach areas.”

Once the ugly duckling of the communications family, the satellite segment has been given a new lease of life in recent months. Amazon and Tesla are two companies which are attracting the lion’s share of headlines, but there are several firms, such as OneWeb, Telesat and LeoSat Technologies, with grand plans to launch constellations over the next few years to bridge the connectivity gap.

And it isn’t just satellites which might be filling the skies over the next few years. Google’s Loon is another business attempting to break the mould when it comes to connectivity. Last week, Google finally received the relevant permissions to start testing its balloons to deliver connectivity, with commercial services set to launch over the coming months.

Even internally the telco industry is seeking to disrupt the status quo. Fixed wireless access for broadband solutions are becoming increasingly popular as a means to deliver connectivity over ‘the last mile’. AT&T and Verizon are charging ahead in the US, with companies like Starry challenging, while numerous telcos have announced their own ambitions in Europe, including Vodafone and Three in the UK.

Although there are still ambitions to deliver the full-fibre dream, the commercial realities seem to be getting in the way. It is incredibly expensive to deliver home broadband through wires, especially when you go to regions such as the US, where the geography is so diverse and vast, or Africa, where ARPU remains a problem in justifying ROI. The digital divide is present everywhere, to varying extremes, and it seems the traditional approach to home broadband is not going to be able to meet demands.

That said, some territories are even out of the reach of Bezos. In the application, Amazon has requested a waiver from delivering connectivity to Alaska, as it would be too far north for the constellation. It perhaps undermines the validation Amazon has put forward, delivering connectivity where it is too difficult for others, though whether this has any material impact remains to be seen.

Although progress is clearly being made here, what is absent from the application are any details on the design of the satellites or timetables for launches. Should permission be granted, we suspect Amazon would move forward very quickly however, Bezos is a space-buff after all.

Interestingly enough, Bezos’ side venture Blue Origin could be in the running to launch the satellites, though Amazon would have to be very careful here. As a publicly-traded company, this could be viewed as a conflict of interest.

The OTTs have constantly been a threat to the delivery of connectivity, a segment owned by the telcos to date, and have faced numerous complications is staging a coup (see Google Fiber). Using satellites might just be a way to carve a niche. It will be an expensive job, but these are companies which have the funds, the desire and the culture to make such a dream a reality.

OTTs Telcos
Cash Cash rich organizations, with incredibly profitable core business models to fuel expansion Incredibly constrained thanks to disruptions to profit-machines such as voice and SMS. Already committed to expensive business of traditional connectivity leaving limited funds for cash-intensive R&D outside bread and butter operations
Desire Constantly searching for new ideas to fuel growth on the spreadsheets. Expectations are high with shareholders and core models will slow down at some point. Do not have the same limitations placed on them (legacy business models and technologies) as the telcos Seem to be fighting too many short-term fires to cast an eye on the horizon. 5G and fibre are taking up so much attention, there seems to be little desire to disrupt themselves. Focusing on protecting what they have
Culture Cultivated a culture of exploration and fail-fast. Willing to fuel ideas without immediate commercial gains if there is potential for profits. More of a big-picture mentality to business Traditional businesses, with traditional leadership and traditional employees. Rarely search beyond the norm for profitability

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?

Google Loon up-and-floating to aid Peru earthquakes

Commercial contract negotiations with Telefonica Peru have allowed Google’s Loon to respond to Amazonian earthquakes within 48-hours of receiving the call.

While the prospect of delivering connectivity via hot air balloons might baffle some, Google’s old-school approach is proving it has a valid and justified place in the digital world. Not only can the balloons deliver connectivity to underserved and commercially-unattractive regions, but the fleet can be quickly mobilised to assist in areas hit by natural disasters.

“Over the past few months, we have been in negotiations with Telefónica on a commercial contract that would utilize Loon’s balloons to extend mobile internet access to unserved and underserved areas of Peru, specifically remote parts of the Amazon region,” Loon CEO Alastair Westgarth wrote on Medium.

“On Sunday morning, a magnitude 8.0 earthquake struck the region. After requests from the government of Peru and Telefónica, we quickly re-directed a group of balloons to the impacted area. Early Tuesday morning, the first balloons arrived and began serving LTE to users below.”

While many might see the internet and the digital euphoria as somewhat of a first-world luxury, connectivity is being interwoven into the foundations of society. Disaster management is only enhanced by technological break-throughs, from drones delivering supplies, big data analytics to assess real-time updates, or basic means of communication, connectivity is crucial in every aspect of the efforts.

Following the earthquake in Peru this weekend, Loon was able to establish a network over the affected region within 48-hours. This is not the first time Loon has responded to such an incident, but this time, due to on-going commercial discussions with Telefonica Peru, Loon was already integrated into the MNOs network allowing such a quick response.

Back in 2017, Loon once again aided the Peruvian Government following flooding in the Northern regions of the country. In Puerto Rico following Hurricane Maria, it took four weeks to deliver a service to the impacted areas with AT&T and T-Mobile. The speed of response this time around was down to already progressing conversations with Telefonica Peru.

“It takes a lot of planning and setup to make balloon-powered internet work,” said Westgarth. “Before we can begin providing service, we need to install ground infrastructure, integrate with a mobile network operator’s (MNO) network, secure regulatory and overflights approvals, and of course launch balloons and navigate them to a desired location.”

The issue which Loon might face in the future is being pigeon holed into a niche aspect of the connectivity mix.

There is of course nothing wrong with being the first-choice option to assist with recovery efforts following a natural disaster, but the team will want to be known for more than that. Loon has ambitions to become one of the key jigsaw pieces in delivering a connectivity solution across society consistently, not only when worst-case scenarios present themselves.

In September, during the AfricaCom conference, Westgarth took to the stage to outline the ambitions of the Loon business. Westgarth pointed out that this is not a suitable substitute for traditional infrastructure, but an opportunity to enhance coverage. The balloons can offer a cost-effective and time-efficient alternative to traditional infrastructure. It might not be as attractive from a technology perspective as fibre or 5G, but it is more realistic.

In proving its effectiveness of Loon in aiding disaster management efforts, Loon might be encouraging people to overlook the opportunities which are available to enhance connectivity in everyday life.

What is worth noting is this is not just an option for the developing markets, but also for the developed ones as well.

In the larger countries, the US for example, delivering connectivity to the rural communities is an on-going challenge. While this might be satisfied over the coming years, there are still regions which will be not-spots where there is no population. The commercial case for traditional connectivity might not ever be justified for some of these regions, though IOT usecases might emerge in the coming years. This is where alternative connectivity solutions, such as satellite or Loon, could plug the gap.

In the developing markets, the business case for Loon as a consistent connectivity option is much more obvious. With ARPU considerably lower, justifying network deployment in the more traditional sense becomes much more difficult. Loon can provide a more feasible alternative.

Loon is crafting itself a useful niche which will appeal to numerous countries who have a history of being impacted by natural disasters, but it will have to be careful not to pigeon-hole itself into this nice.

Vodafone and EE 5G tariffs point towards a new form of digital divide

If the technology industry wants 5G to change the world, placing prohibitive pricing on data tariffs is a strange way to go about it.

The count-down clock to 5G is heading towards the small numbers, and now Vodafone customers will be able to pre-order 5G-ready devices and decide on what tariffs they are able to afford. Unfortunately for some, the prices might prove to be too much of a premium for wallets to stomach.

Devices and various different tariffs are now available for pre-order through the Vodafone website.

Tariff Samsung Galaxy S10 5G Xiaomi Mi MIX 3 5G
5 GB Red Extra £149 upfront, £58 monthly £99 upfront, £50 monthly
15 GB Red Extra £99 upfront, £62 monthly £99 upfront, £54 monthly
30 GB Red Extra £49 upfront, £66 monthly £49 upfront, £58 monthly
60 GB Red Extra £49 upfront, £70 monthly £49 upfront, £62 monthly
25 GB Red Entertainment £99 upfront, £69 monthly £49 upfront, £61 monthly
50 GB Red Entertainment £49 upfront, £73 monthly £49 upfront, £65 monthly
100 GB Red Entertainment £49 upfront, £77 monthly £49 upfront, £69 monthly

All contracts set at 24 months

What is missing from the above table is a nod to Huawei. Vodafone has hit the pause button on devices from the under-fire Chinese brand. As with EE, Huawei’s 5G phone will not be sold through the Vodafone website for pre-order. It would appear this will be the case until the difficulties with the operating system and ecosystem are ironed out.

Despite these complications, the prices are what the prices are.

“Given its high-profile battle with EE to lead in 5G, I expected Vodafone’s initial tariffs to be punchier,” said Kester Mann of CCS Insight. “The entry £50 offer includes just 5 GB of data; on a 5G network, customers could quickly burn through that.”

Mann is absolutely correct; 5 GB will not last long given the promise of the 5G ecosystem and the usecases envisioned. However, upgrading to bulkier tariffs is perhaps cost prohibitive, potentially creating a new digital divide.

As it stands, the price is prohibitive for some. £52 as a starting point is a high barrier to entry. It seems only the privileged will be comfortable with spending so much on a connectivity contract, creating a society of ‘haves’ and ‘have nots’ and another potential digital divide.

Although there have been promises 5G tariffs will be priced on similar levels to 4G, the premium should come as little surprise. People will be prepared to pay for bragging rights.

It should also be noted EE has priced the connectivity options at the same levels. Vodafone have slightly undercut EE for 5G tariffs, but not by much. This is perhaps a situation which we should have expected. Until all four MNOs are on the market with a 5G proposition, threatening to steal valuable postpaid subscriptions, the price will remain lofty.

Tariff OnePlus 7 Pro 5G Samsung Galaxy S10 5G Oppo Reno 5G
30 GB, one swappable £64 a month, £50 upfront £74 a month, £10 upfront £59 a month, £50 upfront
30 GB, two swappables £69 a month, £50 upfront £79 a month, £10 upfront £69 a month, £50 upfront
60 GB, two swappables £74 a month, £30 upfront £84 a month, £10 upfront £69 a month, £30 upfront
60 GB, one swappable £69 a month, £30 upfront £79 a month, £10 upfront £69 a month, £30 upfront
120 GB, three swappables £79 a month, £10 upfront £89 a month, £10 upfront £74 a month, £10 upfront
100 GB, two swappables £74 a month, £10 upfront £84 a month, £10 upfront £69 a month, £10 upfront
10 GB, two swappables £59 a month, £170 upfront £69 a month, £130 upfront £54 a month, £170 upfront
10 GB, one swappable £59 a month, £70 upfront £69 a month, £30 upfront £54 a month, £70 upfront
10 GB, two swappables £64 a month, £70 upfront £74 a month, £30 upfront £59 a month, £70 upfront

All contract set at 24 months

As you can see, the prices are not consistent with the overall rhetoric of the industry. For many years, the industry has preached of democratizing connectivity, while 5G was supposed to be a technology which benefitted the masses.

At the moment, the risk of a digital divide is very apparent. The rich will get the benefits while the poor remain in the 4G-era. While the genuine 5G usecases are yet to emerge, this is not necessarily an issue. 5G offers little more than increased speeds right now, a premium which isn’t really needed with the applications and services which are currently on the market.

Over the next 6-12 months, Three and O2 will enter the fray with their own networks. This should cause the price of 5G connectivity to tumble. Hopefully at least, as the current state-of-play is a connectivity world which has been designed for the privileged.

BT’s rural position is nothing more than defensive strategy

BT has unveiled its own proposals to bridge the rural divide, but this strategy is just as much about protecting its own attractive position as it is connecting the unconnected.

In a letter to the Daily Telegraph earlier this week, BT’s consumer CEO Marc Allera outlined the vision for a digital society where everyone reaps the benefits. BT is proposing infrastructure tit-for-tat in the regions where there is coverage from at least one of the UK MNOs, and a more simplistic infrastructure sharing proposal in the genuine not-spots.

Both ideas are completely reasonable, and both are geared towards protecting a competitive edge for BT, created through years of mobile infrastructure expansion.

Although there are arguments that rural roaming or network sharing propositions would slow down investment and the rollout of mobile infrastructure, following the money is perhaps a better means to understand BT’s underlying strategy. With every change made in the telco landscape, there is financial gain and loss. When BT proposes an idea, you must question what the financial gain or loss is.

The reason Allera is making noise through the mainstream press right now is due to the negative PR the company attracted a couple of weeks back. O2, Vodafone and Three proposed an infrastructure sharing initiative, which was promptly rejected by BT, painting the picture of a spoilt child having a hissy fit because he has been told to share his favourite toy train. However, when you delve into the details, you see BT’s rejection was a sound commercial decision.

In short, the trio of competitors proposed opening-up current mobile infrastructure, forcing any mast owners to allow competitors to place radio equipment on the structure in areas which have been deemed underserved. This sounds fantastic for the consumer and the Government’s ambition of 95% geographical 4G coverage by 2022, but it effectively erodes the position BT/EE has spent years attempting to craft.

BT/EE has the best mobile coverage throughout the UK. This is not only average speed, but geographical spread. Some might dispute this point, but year after year test from the likes of Opensignal and Ookla crown EE the champion. This has allowed it to tell customers they will be able to get fantastic signal almost everywhere in the UK, an advantage over rival MNOs.

The cost when it comes to expanding 4G coverage is not necessarily anything to do with the radio equipment, but everything else. Acquiring the land, negotiating local planning laws, constructing the site, wiring it up with fibre and electricity, the raw materials and the man power, all add up to make an expensive proposition. It’s no wonder telcos want to open competitor’s masts as opposed to building it themselves. It’s much faster and significantly cheaper to simply pay an engineer to fix radio equipment to an existing mast.

Should the trio’s proposal of collaboration be accepted, this would effectively kill this advantage and completely undermine a long-term commercial strategy. No competent business person would agree to such an initiative, especially considering how much it would have cost.

Now take into consideration the BT alternative.

Firstly, in the areas where there is only one telco present, BT would allow one of its rivals to use its infrastructure, but only if the competitor opens one of its own masts to BT. This creates the collaborative framework legislators and regulators are keen to see but protects BT’s competitive edge, and prior investments, and allows it to enhance its own coverage footprint. Yes, it does help a rival, but the pros outweigh (or at least equal) the cons, and it doesn’t allow competitors to bypass the process BT/EE would have painfully gone through in the past.

This would be the idea for areas where there is a telco present, but for the genuine not spots, where none of the MNOs can provide service, a more straightforward infrastructure sharing agreement can be created. All four would contribute to a pot and all would be free to put whatever radio equipment on the mast.

This does not necessarily encourage competition, but these not spots offer very little commercial potential to anyone. Extending coverage to these areas is not about providing a service to customers but meeting the coverage expectations of the Government. Sheep don’t pay phone bills after all, but occasionally a rambler might want to Instagram said sheep.

While this might not sound like the ‘we’re all in this together’ rhetoric which has been banded around, realistically this very few people would think contrary to this position. These are commercial businesses which are in place to compete with rivals and make money. BT might be spinning their argument to suggest such collaborative schemes would slow down infrastructure rollout, but 99% of decisions in big business always come down to money.

Why would BT want to help its competitors compete in a market which is incredibly difficult to find profits in the first place?

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.

T-Mobile uses FWA and digital divide as latest Sprint merger justification

T-Mobile US has announced the launch of an LTE Fixed Wireless Access service, which could address the connectivity needs of 50 million people, assuming the Sprint merger is approved of course.

It hasn’t been billed as an Uncarrier move from T-Mobile, however it has the potential to be quite disruptive. The team has pointed to statistics which suggest 61% of rural customers either have no or only one home broadband services available to them, offering a significant opportunity for CEO John Legere and his magenta army, if they can prove the concept works effectively.

In the first instance, T-Mobile plans to invite 50,000 customers to participate in the live trial, though should the bureaucrats approve the Sprint merger, the team would be able to open this up to 9.5 million customers by 2024. And thanks to 5G, T-Mobile is promising speeds “in excess” of 100 Mbps to 90% of the forecasted FWA footprint, also by 2024.

“Two weeks ago, I laid out our plans for home broadband with the New T-Mobile,” said Legere. “Now, we’re already hard at work building toward that future. We’re walking the walk and laying the foundation for a world where we can take the fight to Big Cable on behalf of consumers and offer real choice, competition and savings to Americans nationwide.”

Although FWA is not a long-term, realistic alternative to fibre, at least not on the current airwaves, T-Mobile could certainly craft a useful position here. Pricing the service at $50 per month, the team suggests customers could save $360 per year, assuming the average monthly cost of home broadband is $80.

For T-Mobile this is perfect timing to plug the benefits of the Sprint merger and gain the interest of influential politicians. With the 2020 Presidential Election machine beginning to crank into first gear, potential candidates and the President himself will be looking for soundbites to rollout to the Middle America rallies. The FWA service ticks two boxes here.

Firstly, with so many rural consumers (and potential voters) either unable to purchase a home broadband service, or only having a single option, T-Mobile is providing an answer. In most cases, the reason home broadband is not available is due to an inability for the telco to prove ROI or the geographical landscape makes it incredibly difficult. FWA addresses these problems.

Secondly, $360 is a lot of money. T-Mobile has a track record of undercutting rivals while delivering a service which is at least on par. This might well be an offering which will attract the interest of many.

Should any politician be involved in forcing the T-Mobile and Sprint merger through, it would be an excellent anecdote for the ambitious politicians to take to potential voters. Not only are they delivering Middle America the internet, they are doing it cheaper than what is available to everyone else around the country.

T-Mobile is promising the merged company will use a low-cost structure to aggressively capture market share by undercutting rivals. This strategy is not only a chance for Legere to further irritate AT&T and Verizon, but it is a massive plug for the merger. In an FCC document, T-Mobile suggests by “monetizing available spectrum and leveraging off of other deployed network assets, the in-home service will be profitable on its own”. The underlying message is quite clear; look what we can do once you greenlight the merger.

Interestingly enough, T-Mobile seems to be fighting the competition concerns in the wireless market, with the opportunity to enhance competition in the wireline market. Soon enough, the merger judges will have to decide what is more important; maintaining the four MNO balance or creating more competition in the home broadband arena.

“These pro-competitive and pro-consumer in-home broadband benefits are clearly merger-specific, verifiable, and compelling considerations to inform the Commission’s overall review of the merger’s effects on competition and the public interest,” the statement to the FCC reads.

Another point which will gain the attention of the pro-consumer politicians and bureaucrats is the promise of free hardware. T-Mobile is promising the LTE router will be provided and installed at no-cost to the consumer, and as soon as 5G is available in the area, the upgraded 5G router will be provided free of charge.

The merger is still hanging in the balance, but the promise of increased competition in the broadband world, especially with the prospect of a race to the bottom, might turn some heads. The pros and cons of the T-Mobile/Sprint merger are starting to become very interesting

BT shared rural network snub is not as it seems

Everyone agrees that there needs to be some sort of collaboration to meet the extra-ordinarily difficult coverage objectives of the Government, but BT is snubbing rivals’ latest plans?

According to The Times, O2, Vodafone and Three have tabled a plan which would see all four of the UK MNOs pool resources to tackle the digital divide. Shared infrastructure would reduce the financial burden of investing in geographical regions which offer little potential for ROI, due to the sparse or non-existent population.

At a breakfast briefing in London, Vodafone UK CTO Scott Petty laid out the concerns in a relatively simple fashion; sheep don’t pay phone bills. This is the challenge the telcos are currently facing; the vast majority of the UK’s population have coverage, but geographical demands of the government are a different kettle of fish (or herd of sheep). When no-one lives somewhere, what is the incentive to invest in infrastructure to provide coverage?

While this might seem like a reasonable approach, BT is reportedly taking issue with the plan, at least according to The Times.

“BT has already invested heavily to create the widest 4G coverage in the UK, and we are keen to collaborate with Government and industry to extend rural coverage into areas where there is none today,” BT said in a statement. “To this end, we have recently proposed a new model for consideration over the coming weeks.”

It has been widely reported BT is snapping the olive branch put on the table from rivals, but BT suggests this is just PR spin.

Reading into this statement, BT is not objecting to the idea of collaboration, the spin which has seemingly been played over the last few days, but suggesting a different approach. And from our perspective, it is a completely reasonable objection to make.

When you look at different coverage surveys and 4G connectivity analysis reports, EE is regularly crowned the best performer overall, and takes top-spot for most of the regional measurements as well. There is a simple reason for this; EE has spent more money improving its geographical coverage than its competitors.

While this is an achievement which should be applauded, the idea of rural roaming and generic shared infrastructure would erode this competitive advantage which it has been building towards. Don’t forget, EE has not been building out this 4G network because it is run by people who are just nice guys and want to help everyone in the UK. This investment has been made to give the team something to shout about and create an advantage when attempting to secure more customers.

EE wants to be able to go to potential customers and tell them they won’t only have better signal in all the normal places, but everywhere they could possible think of going. It’s a long-term strategic decision to put it in a stronger position than its rivals. Should there be any surprise EE does not want its rivals to benefit from the hard work, foresight and investments it has been making for its 4G networks?

Reading between the lines, this is what the objection is based around. BT is prepared to have discussions on collaboration to provide coverage in areas where there is none but allowing competitors to piggy back on its investments is a commercially idiotic idea. Why would it give away such a competitive edge in an industry where profits are so difficult to come by? It has made investments in commercially unattractive areas, so its rivals should have to as well.

From BT’s perspective, this is simply an attempt for rivals to increase connectivity coverage, but not having to pay for the achievement. Collaboration should be focused on areas where everyone is facing complications, not those where everyone aside from BT has an issue.

Another point to consider is whether a shared network would actually work from a differentiation perspective? The telcos are fighting for subscriptions, but if they are all using the same network in the rural markets, it becomes nothing more than a race to the bottom, eating away precious profits and marching towards utilitisation.

Finally, does such a broad-brush approach to geographical coverage actually work? Does the discussion about generic rural network sharing detract from the critical point, which should be focus on areas which have zero coverage, instead of those which have partial coverage? This is a six of one, half a dozen of the other argument, as while it sounds reasonable to concentrate on the areas which are complete data black spots, try telling that to Joe Bloggs who is potentially being screwed by only having a single provider to choose from.

This is an incredibly complicated argument, most of which has not been considered by the initial blame game which has been building over the last few days. When you take the nuances into consideration, there is no right answer, and neither are any of the suggestions wrong. In truth, something has to be prioritised, and not everyone is going to be happy with the final decision.

It might be easy to hurl blame towards BT/EE for its objection to a collaboration plan, but to do so without considering the commercial realities of the telco industry is incredibly lazy. BT/EE is objecting to this proposal, not to the idea of collaboration, but so would any other business which had built this position.

A post-Brexit Ofcom worries us – Vodafone

With the anti-China rhetoric dominating the headlines in recent months, Brexit chatter has become unfashionable. But with the deadline fast approaching, what will Ofcom look like in the future?

Speaking at a breakfast briefing in London, Vodafone UK Chief Counsel and External Affairs Director Helen Lamprell let loose on the UK regulator. Cell tower height, rural roaming, potential reintroduction of international roaming charges, dark fibre and auction dilemmas, there seemed to be a lot of venting going on.

“The UK remains a challenging environment [regulatory], one of the most challenging in the world,” said Lamprell. “But we are seeing positive change.”

The issue which Vodafone is keeping an eye-on is Brexit. According to Lamprell, Ofcom is one of the most conservative regulators throughout the bloc, though when it is freed from the tethers of the Body of European Regulators for Electronic Communications (BEREC), there is a risk it could become even more so.

There isn’t necessarily one massive bugbear from the telco, but several little aggravations which all combine to a much larger nuisance. Let’s have a look at mast height to start with.

Everyone wants signal, but no-one wants towers

As it stands, UK cell towers are limited to 25 metres in height. This obviously doesn’t take into account those masts which are placed on the top of buildings, just the actual structure itself. In most cases, this doesn’t have a massive material impact on operations, such is the population density of the UK, but when you look at countryside locations it becomes a much larger discussion.

Part of the up-coming 5G spectrum auctions will place coverage obligations on telcos. This is a reasonable request by the government, as telcos have shown they will not bridge the digital divide on their own, though as it stands 99% of the UK population is currently covered. Geographical coverage is no-where near this figure, though as there is little commercial gain from providing coverage to these remote locations, reaching the 90% objective is difficult.

One way which this could be done is by providing exemptions to the 25-metre limit in certain situations, such as the countryside, as CTO Scott Petty pointed out, for every 10-metres you go up the coverage ring is doubled.

All four of the major UK MNOs (EE, O2, Vodafone and Three) are meeting with the Department of Digital, Culture, Media and Sport (DCMS) this afternoon, and this will be a point on the agenda. Should these exemptions be granted, it opens the door for shared infrastructure also, as the main cost of these structures is civil engineering and construction, not the equipment on the tower. Both of these developments combined would aid the telcos in reaching the geographical coverage objectives.

This brings us onto another interesting point raised by Lamprell, rural roaming.

My restless, roaming spirit would not allow me to remain at home very long

“Rural roaming takes away our incentive to invest,” Lamprell said. “It’s a really, really dumb idea.”

Three are one of the companies pushing for rural roaming, but as the Vodafone team points out, it is the only MNO which hasn’t built out its rural infrastructure. However, should rural roaming be introduced it would cause a stalemate for investment.

As Petty points out, why would any MNO invest in its own infrastructure when it could force its way onto a competitor’s? All the telcos would be sitting on the starting line, waiting for another to twitch first, such is the pressure on the CAPEX spreadsheet column when investing in future-proofed infrastructure.

Moving onto the international roaming question, Vodafone is staying pretty agile right now. As it stands, the status quo will be maintained, though the team will react to the commercial realities of a post-Brexit landscape. Currently, as a member of the European Union, Vodafone is protected from surcharges when it comes to termination charges, though those protections will end with Brexit.

Vodafone has quite a significant European footprint, in most cases there is little to worry about, but for those territories which fall outside the Vodafone stomp, negotiations will have to take place.

There are several countries, Estonia is an example, which has higher termination rates than the UK. If the reality of a post-Brexit world is Vodafone is swallowing up too many charges from international calls/SMS/data, roaming charges might have to re-introduced in certain markets. This is all very theoretical currently however Ofcom will prevent Vodafone from replicating these charges from the European nations. Vodafone is sitting and waiting for the realities of Brexit right now, though it will not be a broad-brush approach.

“Our position today is to maintain the position we are in, but we will have to evaluate the situation at the time,” said Lamprell.

Ignore Luke, the Dark Side is great

Dark fibre. It used to be a popular conversation, but everyone seems to have forgotten about it recently.

Not Lamprell.

The focus of Ofcom over the last 12 months or so has been on opening-up ducts and poles, and while this certainly is progress, it only addresses part of the problem. Dark fibre is an aspect of the regulatory landscape which could add significant benefits to the industry but has seemingly become unfashionable.

Dark fibre, fibre cabling which is not currently being utilised by Openreach, could answer the backhaul demands of the increasingly congested networks quickly and efficiently. Mainly as it is already there. There is no need to dig up roads, apply for planning permission or procure new materials, it could be as simple as flicking a switch.

Openreach resistance and Ofcom’s aggressive focus on ducts and poles is perhaps missing a trick.

Going, going, maybe not yet

The UK is currently in somewhat of an unusual and unprecedented situation. It is one of the nations leading the world into the 5G. This is not to say it is in a podium position, but compared to the 4G era, the UK is sitting pretty.

Part of the reason for this has been early auctions to divvy up spectrum assets, however, moving forward there are some irregularities which is causing some head-scratching.

Later this year, Ofcom will kick-start another auction which will see 120 Mhz of spectrum in the 3.6-3.8 GHz bands, as well as 80 MHz in the 700 MHz band go up for sale. For both Lamprell and Petty, this auction doesn’t make sense. These are two bands which will be used for different purposes (coverage and speed) so why auction them off together.

If Vodafone had known this was going to happen back in April 2018, during the first spectrum auction, it might have altered its strategy.

“We could end up with a very fragmented spectrum situation,” said Petty.

From the team’s perspective, it seems Ofcom has only just woken up to the coverage demands of the UK government, and is using this auction as a blunt tool to meet the objectives. From an engineering perspective it doesn’t seem to make much sense to Vodafone.

“We are not happy with the rules,” said Lamprell. “But it’s rare for us all [MNOs] to be happy.”

Looking good but looking suspect

The UK is currently in a good position ahead of the 5G bonanza from an engineering perspective. With test hubs being set up around the country and telcos who are acting proactively, the UK looks like an attractive environment to invest in for R&D. It is by no-means leading the global 5G race, but it is in a healthy position.

However, political and regulatory uncertainty are a threat to this perception. The activities and culture of both DCMS and Ofcom over the next couple of months will has a significant impact on the 5G fortunes of the UK, as well as the ability to attract new talent, companies and investment.

Infrastructure commission warns UK government over lacklustre ambition

The National Infrastructure Commission (NIC) has issued a warning to the UK Government over its infrastructure ambitions, seemingly worried that Minister’s think the job is done.

“There is a real and exciting chance available to ensure the UK benefits from world-class infrastructure, particularly through the forthcoming National Infrastructure Strategy – a first for this country,” said Chairman of the National Infrastructure Commission Sir John Armitt.

“We cannot afford for Ministers to take their eye off the ball. With this issue at the heart of the Industrial Strategy, I would urge the Government to adopt the recommendations from our National Infrastructure Assessment, and use this to offer industry the long-term, fully-costed infrastructure plan they need.”

While various committees and departments have been readying the red-tape with reviews, assessments and consultations, Armitt fears the job is only part finished. The National Infrastructure Commission recommends infrastructure plans for the next three decades should be in place to ensure the UK is future-proofed for the digital economy, a much longer-term ambition than has been set forward by the government currently.

With the National Infrastructure Strategy set to be published over the next couple of months, we’ll get a clearer picture of the ambitions of the Government. This document has been pitched as a playbook to guarantee the economic prosperity of the UK, though it seems the NIC is worried momentum might be lost should the plans be limited to a shorter period of time.

Fibre connectivity is one area which has been mentioned by the NIC, as while there are targets from the government and Ofcom for the mid-2020s and 2033, these are relatively broad. The next stage of the plan, once 15 million homes have been ‘fibred up’, should be to extend the infrastructure into the rural communities. Unless the Government formalises this progression to the next stage, there is of course a risk of telcos going ‘off-piste’ and serving their own interests.

This scenario is perfectly understandable and perhaps the very reason the Government has to cast an eye onto the far-distant horizon. Telcos are commercial organizations after all, favouring upgrades in areas where there is a more immediate ROI. This is what created the digital divide in the first place, and without regulation to hold the telcos accountable, they will naturally favour investments in the more densely urbanised areas.

What is worth noting is that Armitt’s comments are not supposed to be a damning indictment of the progress made thus far. Steps forward to ensure UK infrastructure is in an appropriate position have been made, though the question is whether the momentum will be continued to ensure the continued success of the UK in the global economy beyond the documented stages.

To counter Armitt’s point, formulating plans for such long periods of time can create a rigid regime which does allow for reactionary measures. Who knows what the world will look like in a couple of years’ time; any plans will have to flexible enough to allow adaptability. It is a tricky equation to balance.

For anyone in the telecommunications and telco world, this is a bit of a recurring theme. Digital communications is a hot topic right now, such is the enthusiasm created by 5G, though the political interest peaks and troughs. The same political hype ramped up ahead of 3G and 4G before dying off. Soon enough another cause to champion will emerge, though should the NIC’s recommendations be taken on board, you would hope the regulatory framework has been put in place to ensure structured progression.