Handsets are now the biggest hurdle to adoption in Africa – MTN CEO

Connecting the African continent is always going to be a complicated job, but the availability of handsets is now the biggest challenge according to MTN CEO Rob Schuter.

When most people visit the continent of Africa, they are likely drawn to touristic countries such as Morocco, South Africa or Tunisia, and while some scenes might jar, the picture is misleading. These countries might not be as advanced as those in Europe or North America, but they are not a fair representation of the wider continent either, as Schuter highlighted at AfricaCom 2019.

MTN has roughly 220 million subscribers across the region, though only 87 million are mobile broadband customers. Like traditional banking, only a third of the African continent is connected to the internet. Deployment of connectivity infrastructure might be motoring along, but adoption of these services is not.

There is of course a myriad of reasons for this, but according to Shuter, the affordability of handsets is at the top of the list.

Average monthly earnings in Africa are as little as $100 a month. ARPU is $4, which is perhaps on the steep side, though most entry level smart-feature phones cost $40. This is where it becomes difficult for an individual to take the step into the digital economy; how many individuals can justify 40% of their monthly income to purchase a device?

That said, the situation is not as dire as it used to be. MTN has launched the Smart S device, a hybrid device with the appearance of a feature phone but with some internet services capabilities, Vodacom has launched a number of different alternatives such as the Vibe 4G or the Smart Kicka 3, while Nokia and Alcatel have debuted their own devices as well. But despite the efforts to decrease price, more work needs to be done.

During one of the keynote panel sessions, Shuter’s point was echoed by Schalk Visser, CTO of Cell C, a challenger MNO in South Africa. Visser said there as still a remarkable number of unconnected individuals in the connected areas. Infrastructure has been deployed, addressing one of the key barriers to digital inclusion, though it is clear only a fraction of the problems are being addressed.

But while this is a significant challenge, it should also be noted the African connectivity conundrum is a tapestry of complication.

CHASE is a useful acronym to bear in mind here. Coverage, Handsets, Affordability, Service bundles and Education. The mobile ecosystem cannot exist with infrastructure to provide the coverage, handsets to act as the interface, affordable tariffs, and ecosystem of services and individuals who are educated in the ways and means of the internet economy.

Digital inclusion is of course a significant challenge for anyone based on the African continent, but affordable and reliable handsets are now the top challenge.

Is the UK’s Shared Rural Network a ploy to extinguish spectrum obligations?

The UK government and operators have pledged to spend £1 billion on rural coverage, but is it enough to convince Ofcom to drop the deeply unpopular coverage obligations placed on the 700 MHz and 3.6 GHz spectrum licences?

Next year Ofcom will auction licences for valuable spectrum assets in the 700 MHz and 3.6-3.8 GHz bands, and while these airwaves are incredibly attractive to the telcos, the attached coverage obligations are not. This has been a point of conflict in the industry over the last few months, with Vodafone being particularly critical.

Sources have suggested to Telecoms.com that the Shared Rural Network is an effort to appease the demands of the UK regulator. Over the coming months, we are likely to see a consultation from Ofcom, and perhaps it will be tempted to drop the universally unpopular coverage obligations which have been attached to the 700 MHz and 3.6-3.8 GHz spectrum auctions as a result of the Shared Rural Network.

Looking at the obligations, the MNOs who profit from securing the valuable spectrum assets would have had to dig even deeper in the pockets to fund the obligations. Not only would geographical coverage have to be increased to 90%, an additional 500 sites would have to be built and the winning telcos would have to provide good quality service outdoors for at least 140,000 premises to which it currently does not.

One of the issues with these obligations is that there is no consideration to how they might individually influence each other. An auction winner might not have to build an additional 500 towers or add an extra 140,000 premises to the coverage cone to get to 90%, but that didn’t matter. The money and effort would have to be spent in any case.

Telcos generally do not like being told how to spend their money, and these obligations were met with widespread criticism. Ofcom created a common enemy to unite the telcos, which is no easy task, to figure out a way around these demands. This appears to be the driver for the Shared Rural Network; invest in rural together, to rid the landscape of what is perceived by private industry as unreasonable coverage obligations.

As you can see from the statement below from Ofcom, the plan seems to have been successful, though we will wait for the ink to dry.

“We warmly welcome these commitments, which follow detailed discussions between Government, Ofcom and the mobile operators,” said an Ofcom spokesperson.

“These improvements will make a real difference to mobile customers across the UK, and we’ll ensure they’re legally binding by writing them into operators’ licences. We will also monitor and report on companies’ progress in achieving better coverage.

“Separately, we will shortly set out revised plans to release more airwaves for mobile services next year. In light of today’s agreement, we are no longer proposing to include coverage requirements in our auction process. We will now press ahead, with industry, on the urgent task of getting better mobile services to people wherever they are.”

These are promising noises being made by the regulator, but the Shared Rural Network is only a proposal for the moment, and Ofcom can still go back on the suggestion it will remove coverage obligations. However, the telcos should view this as a win.

The UK Government and the four MNOs have finally come to an agreement to fix the digital divide with a £1 billion shared rural network.

With £530 million being contributed by the MNOs and an additional £500 million being squeezed out of the UK Government, the aim is to increase geographical coverage of 4G networks to 95% of the UK. Part of this will involve reciprocal agreements between the telcos to share existing infrastructure, but the plan will also include joint investments to build telco-neutral sites for the total not-spots.

“Brokering an agreement for mast sharing between networks alongside new investment in mobile infrastructure will mean people get good 4G signal no matter where they are or which provider they’re with,” said Digital Secretary Nicky Morgan.

“But it is not yet a done deal and I want to see industry move quickly so we can reach a final agreement early next year.”

While the digital divide in the UK is no-where near as apparent as some places around the world, it does still exist. In recent months, this has also become a mainstream, politically charged issue and this is not a reversible change. The telcos will be under continued pressure to deliver connectivity in the nooks and crannies of the UK, though for it to be commercially viable this initiative will be crucial.

As it stands, only 67% of the UK landmass is covered by all four MNOs, while 7% are deemed total not spots, with zero coverage from anyone. Under the new plans, each of the MNOs will bring their own geographical coverage up to 92%, which when brought together, will bring 4G coverage to 95%.

Looking at the total not spots, although this is a secondary objective of the shared rural network, addressed further down the line, the aim is to bring this 7% of the UK which gets zero 4G coverage down to 3%.

“There is no other scheme like this in the world,” said Vodafone UK CEO Nick Jeffery.

“It will spell an end to annoying mobile ‘not spots’ for hundreds of thousands of people living, working and travelling in the more remote parts of the UK. By working together, we will deliver better coverage while offering more choice for consumers and businesses using far fewer masts.”

This is a good scheme, which should go someway to addressing some of the challenges which are being faced across the UK’s connectivity landscape. What is worth noting however, is this is not an overnight fix. To get to the 95% threshold suggested in this statement, it make take five to six years.

What is also worth pointing out, is the contributions by the telcos are unlikely to be equal. Those who have the most to gain from a shared rural network will likely be asked to contribute more to the CAPEX column, while the OPEX of these sites will be split evenly between the four MNOs.

And there are of course other questions which remain, such as, how will this process and mechanism be managed? The most logical answer would be for the four MNOs to create a joint-venture, invite Government stakeholders to sit on the board, to manage this process commercially. That said, we suspect Ofcom and the Department for Digital, Culture, Media and Sport will want to have more skin in the game and may well push for this management function to be an offshoot of an existing public sector body.

That said, the proposal is a promising one to address Government demands to meet coverage obligations and MNOs needs for investments to be commercially viable. But who gains the most from this initiative?

Looking at the 2018 Connected Nations report from Ofcom, O2 would have the most to gain and EE the least:

Operator Geographical coverage
EE/BT 84%
O2 74%
Three 78%
Vodafone 79%
All MNOs 66%

While these figures are a little bit dated, we can’t imagine the rankings have changed too significantly. One aspect which we were surprised about was the city-centric Three pipping O2 on geographical coverage across the entirety of the UK.

Just taking the figures at surface level, EE might be a bit irked with the Shared Rural Network as it erodes a competitive edge. EE can sell its services to customers with the promise of having the most widespread network across the UK, and the holding-hands approach to bring everyone up to 92% might undermine this. However, there are some advantages.

Firstly, 92% coverage will not appear overnight. It will take years to get to this number, allowing EE to maintain its competitive edge for some time. The other element you have to consider is the work it will take to get to 92%.

Although the pain of building passive infrastructure will be shared between the four MNOs, not evenly however, the purchase and installation of active equipment will be down to each of the telcos. EE does not have as much of a gap to bridge to reach 92%, freeing up time and resource. This could be spent on improving networks in the cities to reduce network congestion or improving connectivity on the transport links throughout the country. It might seem like a negative, but it can be turned into a positive.

While many in the industry will complain about the mountains of red-tape which is constructed through the aisles of the telco industry, this is an example of a forward-looking, collaborative initiative. It marries the coverage demands of the Government which are set forward in campaign promises, while being sensitive to the CAPEX and OPEX requirements of private industry.

Governments and regulators around the world should look at these proposals and take inspiration. The digital divide is not as great in the UK as elsewhere, though this is certainly a step forward.

Vodafone first to take advantage of spectrum sharing rules

Vodafone has announced it has entered into a three-year agreement with StrattoOpencell to share the use of it 2.6 GHz spectrum assets to deliver connectivity in Devon.

Following adjustments to spectrum license rules by Ofcom earlier this year, Vodafone becomes the first telco to share out the valuable airwaves. As part of the agreement, StrattoOpencell will deploy 4G small cells to deliver connectivity services to a holiday site in Devon.

“Vodafone has a long history of innovation, from sending the first text message to conducting the first 5G holographic call,” said Vodafone UK CEO Nick Jeffery. “We are delighted to become the first mobile company in the UK to share some of our spectrum to extend rural coverage.

“By offering some of our 4G spectrum to StrattoOpencell, we are helping to extend fast and reliable mobile network access for people in rural communities. Mobile connectivity in rural areas is just as important as it is for those in towns and cities, which is why we continue to work with others to help improve rural connectivity for all.”

Earlier this year, Ofcom made some amendments to allow for spectrum assets to be licensed off to third-parties by the telco which owns the airwaves. The changes are designed to more efficiently make use of the valuable assets. Vodafone is currently using the 2.6 GHz spectrum band in urbanised areas, though not in the rural communities. The high-capacity is attractive in the cities, though the shorter-range is less so when dealing with the rural areas.

This looks to be a very good example of proactive and forward-thinking regulation. If Vodafone is not making use of the spectrum in certain areas, why shouldn’t someone else? It is after all an asset which Vodafone is entitled to monetize in any (legal) way it sees fit.

Should a telco find a partner it would like to license its spectrum assets to, it has to seek permission from Ofcom detailing the band, location, bandwidth and power required. The regulator looks at it with a positive outcome in mind, though it will look for potential interference. The applications are dealt with on a case-by-case basis.

“Our new sharing approach aims to help more people access the airwaves they need to create local networks around the UK, including improving connections in rural areas,” said Philip Marnick, Group Director of Spectrum at Ofcom.

“Vodafone and StrattoOpencell are the first to take advantage of this. We look forward to seeing how others use our new spectrum access approach to support innovation and enable local communities to have better connections.”

Although this is only in Devon for the moment, the spectrum policy has been altered to enable more creative connectivity solutions in areas where fixed-connectivity is not an option. This might be difficult to reach places, or areas where permanent connectivity is not required. The success of the idea will be dependent on adoption, so it will be curious to see whether EE, O2 and Three elect to join the sharing scheme.

EU public WiFi program has met strong enthusiasm

The EU’s third round call for tenders to build public wifi networks has received over 11,000 applications in one day from municipalities across the Union.

The latest round of the WiFi4EU programme, which has 1,780 ‘vouchers’ to offer, was over-subscribed by more than six times during the one day window. More than 2,000 municipalities and municipality groups sent in their applications within two seconds of the opening of the call on 19 September, the Innovation and Networks Executive Agency (INEA), the EU Commission’s executive agency in charge of implementing the WiFi4EUEU said in a statement. The winners would be selected on first-come first-served basis, but geographical distribution would also be considered. Each member state has a minimum guarantee of 15 vouchers and a maximum cap of 142.

WiFi4RU was designed to build free, high speed, and secure wifi connections to the internet in public spaces across the member states, for example in parks, squares, libraries, public buildings, for residents and visitors alike. The recipients of the ‘vouchers’, each of which is worth €15,000, will then choose their subcontractors to build the access network, not in duplication with other existing free public or private wifi networks. The municipalities should commit to provide free internet access for at least three years, including free from advertising.

The total budget for WiFi4EU is €120 million, which is handed out in batches. After the first two rounds of applications, which took place in November 2018 and April 2019, a total of 6,200 vouchers have been awarded, worth a total value of €93 million. With €26.7 million earmarked for the current round of applications, the budget is all but spent. However, the INEA announced there will be new opportunities to apply in 2020.

The public-funded free internet access will be welcomed by municipalities that receive large numbers of tourists, especially from outside the EU, to whom roaming charges would be high. It would also be good news for entrepreneurs or freelance workers that need to meet in small groups and work on their computers. Despite that 4G and even 5G connection is becoming more ubiquitous, very few computers, where heavy computing is being done, will be equipped with cellular connection in the near future. Public libraries, for example, would become ideal places for such meetings. It is already a common practice in places like Finland’s public libraries.

The programme will be a small negative for some ‘start-up incubators’, which are barely more than a place that leases a work desk and a high speed internet connection. It may even be a minor negative for places like the coffee shops, where many individual entrepreneurs would go for the internet connection, at the price of a coffee.

In 2016, the European Union published its digital vision, titled “Connectivity for a Competitive Digital Single Market – Towards a European Gigabit Society”, by which it aimed to achieve internet access downlink speeds for all European households of at least 100 Mbps. The current WiFi4EU program is a good complement for the out-of-home environment, despite that there is no speed guarantee.

UK Government does not understand digital divide – committee report

A UK parliamentary committee has unveiled a report that suggests while rural connectivity is improving, it is still not keeping pace with the urban environments.

The report from the Environment, Food and Rural Affairs Committee has suggested the digital divide is persistent. Steps forward have been made though the committee does not believe the Government has fully grasped the extent of the problem, the scale of the challenge, or the wider cost of poor connectivity for the rural economy.

“Despite improvements in coverage since our predecessor’s Report, our inquiry has shown that poor broadband and mobile data services continue to marginalise rural communities, particularly those living in hard to reach areas,” said Neil Parish, Chair of the Environment, Food and Rural Affairs Committee.

“Digital connectivity is now regarded by many as an essential utility, with many in rural areas struggling to live a modern lifestyle without it. There continues to be a lot of frustration felt by those living or working in rural areas– and rightly so.”

While the committee has conceded positive steps have been made by the Government is recognising the challenge, Parish does not feel it fully grasps the depth and breadth of the challenge.

“However, the Committee is not confident that the Government has fully grasped the scale of the challenge currently faced and is sceptical as to whether the Government will meet these ambitious new targets without considerable and potentially controversial reforms,” Parish said.

The Government has of course set very ambitious targets to close the digital divide, though it does appear the action plan to meet these targets has not been set in place. If the gains are only being dwarfed by progress in the cities, is this is a genuine solution?

Although it might sound like a first-world problem, the idea of connectivity should no longer be seen as a luxury; it is a fundamental part of the UK’s society.

This is the attitude some will take. You can’t get fast enough broadband, so outside and kick a ball instead of watching Netflix. However, if you consider many banks are now taking a digital-first approach, closing smaller branches in the countryside, connectivity becomes critical. At risk patients no-longer have to be limited to a ward if they can be effectively monitored at home. Agriculture can be revolutionised with technology also. There are certainly more benefits than simply removing buffering.

Another interesting element to this argument, aside from empowering businesses outside the major towns and cities, is the impact on well-being.

This is a very important aspect on improved connectivity and an element of the evolution of many forward-looking businesses. Trends are moving towards a flexible-working relationship between the employee and employer, with more companies being open to work-from-home environments. It improves the happiness of the employee, potentially increasing retention, and also allows the company to access new talent.

However, it does depend on consistent, reliable connectivity throughout the country.

Interesting enough, a sluggish approach to the broadband challenge could also have an impact on the fast-growing mobile economy, bolstered by the emergence of 5G.

“With 5G on its way, it is also crucial to ensure the background infrastructure (the fibre highway) is in place, using techniques such as fibre cabling directly to the outdoor antennas, combining fibre with power to the huge number of new ‘small cells” that will be required and leveraging existing fibre-to-the-home (FTTH) construction to add in extra 5G connection points along the way,” said Phil Sorsky, VP of the international business at CommScope.

The digital divide might not be as apparent in the UK as it is elsewhere, though it is still a persistent problem for British citizens. BoJo’s target of full-fibre coverage by 2025 might sound good, however it does appear there is a lack of thinking behind the execution of the strategy.

FWA is starting to gather momentum in UK

The idea of Fixed Wireless Access (FWA) has been belittled in the past, but it is moving beyond ‘flash in the pan’ territory and becoming a genuine alternative across the UK.

Some have been harping on about the benefits of FWA for years, while others have snubbed the concept for more traditional means of broadband connectivity, but there is growing interest in the technology throughout 2019. The latest to join the hype is Macquarie Capital, yet another private investment company looking to capitalise on the sluggish telco segment. Here, the team is backing the rollout of FWA solutions in rural communities.

“The roll-out of superfast and ultrafast broadband has too often focused on the UK’s urban centres – leaving untapped investment requirements in the UK’s rural communities,” said Oliver Bradley of Macquarie Capital.

“We believe that using Macquarie Capital’s unique principal investment and development expertise there is a significant opportunity to work with Voneus to accelerate the deployment of UK rural broadband, this will help unlock significant economic and social benefits for the UK.”

Working alongside emerging ‘alt-net’ Voneus, Macquarie Capital will invest £10 million initially and an additional £30 million through various different build-out phases. FWA will be the tip of the spear, as Voneus looks to focus on 900,000 homes across the UK countryside who still don’t have access to Superfast broadband services.

“Macquarie Capital’s backing is a huge endorsement of Voneus’ business model and vision, as well as an indication of how much work still needs to be done to connect the many homes and business across the UK that still do not have access to decent broadband services,” said Steve Leighton, CEO of Voneus.

While the only option for genuine 100% future-proofed broadband connectivity is fibre, the FWA revolution does offer considerable benefits. Firstly, it is faster to deploy as last-mile connectivity is over-the-air, removing the complications of civil engineering. Secondly, it is cheaper to deploy raising the interests of the telcos. And finally, it satisfies the need for the moment.

FWA could be viewed as half-way house on the road to full-fibre deployment as it offers the connectivity speeds which are required today. Some Government targets for broadband infrastructure are non-sensical as they focus on technology not the desired outcome. If the immediate desire is to deliver relevant download speeds in the home, this can be done through FWA solutions. There is no reason why FWA can’t address the immediate challenge, assuming of course there are on-going plans to rollout fibre infrastructure over a reasonable period of time simultaneously.

This is what Voneus is proposing. It will deliver FWA connectivity in areas which have largely been ignored by the traditional providers, while also working the business case to deploy full-fibre broadband in the future.

This approach might irritate some of the traditional telcos in the UK, but there are cases around the world where it has been proven a success. Over in the US, Starry is a FWA ISP which is rapidly expanding. Although it is focused on multi-dwelling units in major cities, the theoretical business model, and customer appetite has been proven.

Closer to home, Three and Vodafone have also launched their own FWA propositions for 5G. It will be interesting to see how these convergence strategies play out, but Three already has 800,000 home broadband subscribers through its acquisition of UK Broadband. This is an area of great potential for these two broadband challengers, especially should the reliability of FWA be proven as 5G rolls out across the country.

The idea of a fibre spine and wireless wings is not a new one, but it is certainly one which has merit. Here, Voneus could certainly gain traction in areas which have been neglected by the traditional player because of the high-cost of deploying infrastructure. FWA can be a good idea, just as long as its not the final goal for the ISP in question.

FCC allocates $20bn to close US digital divide

One of the genuine risks of the accelerated journey towards the digital economy is the widening digital divide, though an extra $20 billion from the FCC could help even the landscape.

Although the US is one of the most advanced digital nations in the world, the difference between the haves and have nots is quite staggering. If you were to compare the connectivity options for a millennial in San Diego to a farmer in rural Ohio, you wouldn’t assume it was the same country. Some might see it as a first world problem, however with the benefits of connectivity being applied to areas such as education and healthcare, it is irresponsible to allow this divide to continue.

This is the conundrum which the FCC has faced in recent years. It is of course commercially attractive to drive connectivity options in the densely populated urban areas, but such are the sparse and environmentally challenging regions across some of the US, vast numbers of people are being left behind.

Here, the FCC is proposing the establishment of the Rural Digital Opportunity Fund, which will direct $20.4 billion towards closing the digital divide.

“In short, we’re proposing to connect more Americans to faster broadband networks than any other universal service program has done,” said FCC Chairman Ajit Pai.

“I’m excited about what this initiative will mean for rural Americans who need broadband to start a business, educate a child, grow crops, raise livestock, get access to telehealth, and do all the other things that the online world allows. And I look forward to kicking off this new auction next year.”

This fund will have a broader scope than the previous Connect America Fund (CAF), and will aim to assist regions which are not currently able to access download speeds of 25 Mbps and upload speeds of 3 Mbps, significantly higher than the caps placed on the CAF funds.

The funding will be allocated in two phases. Firstly, using data which has already been collected by the FCC, a reverse auction will be implemented to hand out the funds. Alongside this auction, a new data collection tool will be implemented to offer greater depth to the insight. In the second phase, the intelligence gathered through this tool will help allocate funds as well as to those communities which missed out in the first phase.

With what will be known as the Digital Opportunity Data Collection initiative, the FCC will aim develop more granular broadband deployment data. This initiative will aim to collect geospatial broadband coverage maps from fixed broadband ISPs, and also develop crowd-sourcing portal that will gather input from consumers as well as from state, local, and Tribal governments. Through crowd-sourcing the data, the FCC will hope to validate the information put forwards by the ISPs.

This is a sensible approach from the FCC, as while the ISPs will have the biggest treasure troves when it comes to data, they have also shown themselves to be misleading in the past. With such a tool at its disposal, the FCC can become a more intelligent organization, taking proactive steps towards fixing the digital divide as opposed to simply signing blank cheques for the telcos to cash.

“I appreciate the hard work that went into this item to fix the Commission’s broken mapping process,” said FCC Commissioner Michael O’Reilly.

“Like some of the very laudable mapping bills being considered by Congress, including those by Chairman Wicker and Senator Capito, this item takes important steps in creating a more accurate and useful picture of broadband coverage, which should allow the Commission’s universal service policies to better focus on those millions of Americans left behind without access to broadband service today.”

And while this might sound like a positive step-forward, Commissioner Jessica Rosenworcel, a political opponent of Pai and O’Reilly, has found something to be irked about. Rosenworcel fears the maps might be replaced by a difficult to find URL and handing control of data collection to the administrator of the funds is not the best way forward.

Although we should not be surprised by the objections, they are incredibly weak. Rosenworcel has said she likes the idea, though her objections are seemingly just trying to be awkward, playing the childish role of political opponent wherever possible. While we rarely have anything positive to say about Pai and his cronies in the FCC, this is a sensible move forward and Rosenworcel seems to be finding objections purely because it adds to the theatrics of politics.

What is incredibly difficult to understand is how severe the digital divide actually is in the US. The FCC suggests there are 21 million US citizens who cannot access acceptable broadband speeds, though Rosenworcel has quoted a report which claims the digital divide is as high as 162 million.

This outlandish claim pays homage to a report from Microsoft which should be taken with a bucketful of salt. Let’s not forget, Microsoft is a firm which will benefit from stoking the fire and attracting additional funds to fuel connectivity deployments in the rural community.

This in itself is one of the significant problems when attempting to tackle the digital divide; no-one actually knows what the starting point is. Depending on your commercial aims and political allegiance, the number of underserved citizens will vary wildly. How can one address a problem when the variables remain unknown? It is nothing more than shooting in the dark, hitting the mark occasionally but likely to miss the most important targets.

Alongside these changes in funding connectivity, the FCC has also released a statement which will address how funding for telehealth services is allocated.

This is where the idea of connectivity can be more than simply a means to access entertainment, taking the digital divide beyond the realms of first world problem. There are communities in the US who are underserved by medical services thanks to doctor shortages and hospital closures. The Rural Health Care Programme aims to address these challenges, making use of connectivity to ensure all US citizens have access to medical services as and when they need them.

The latest proposal is another reform to how funds are allocated, attempting to identify the regions which are most severely underserved. Funding will be increased by 43% to $571 million.

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.