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.

40 execs sign a pledge to make the internet a nice place

Industry lobby group the GSMA has launched its ‘digital declaration’, signed by executives from 40 technology firms and telcos, aiming to make the digital economy a safer place, accessible to all.

With the likes of Bharti Airtel, China Mobile, Sharp, SK Telecom and Vodafone signing the deal, the GSMA is embracing its hippy calling of peace, love and digitisation. The declaration pins the hopes and dreams of the industry onto several different principles, which theoretically should lead to a warm and embracing internet.

“Social, technological, political and economic currents are combining to create a perfect storm of disruption across all industries,” said Mats Granryd, Director General of the GSMA. “A new form of responsible leadership is needed to successfully navigate this era.

“We are on the cusp of the 5G era, which will spark exciting new possibilities for consumers and promises to transform the shape of virtually every business. In the face of this disruption, those that embrace the principles of the Digital Declaration will strive for business success in ways that seek a better future for their consumers and societies. Those that do not change can expect to suffer increasing scrutiny from shareholders, regulators and consumers.”

Looking at the principles themselves, they are relatively simple. Respect the privacy of digital citizens; handle personal data securely and transparently; take meaningful steps to mitigate cyber threats; and ensure everyone can participate in the digital economy as it develops whilst combatting online harassment. Its broad enough to allow wiggle room, but accurate enough to ensure all the right buzzwords are ticked off the list. You can have a look at the full declaration here.

While it is certainly a step in the right direction to get these organizations to sign a document recognising the importance of often ignored concepts such as inclusion and security, perhaps the next step should be to engage governments and regulators.

The CEOs of these technology and telco giants will certainly play an influential role in the success of the internet, though these are companies which will be playing within the rules set by higher powers. Policy, regulation, legislation and public funding will play an incredibly powerful part, though with such varied political regimes across the world, getting them to at least acknowledge these constant principles should be a priority.

Another interesting omission from the list are the powerful and influential internet players. The likes of Google, Amazon and Facebook will perhaps play a more significant role than the telcos and technology vendors who have already signed the document as they slip into the grey areas of regulation. The OTTs have been effectively doing what they like to date, such is the difficulty in matching regulation with the pace of change in this segment, and while such a document is little more than a PR ploy, it would at least demonstrate some accountability.

Loon bolsters connectivity credentials with advisory board signings

Alphabet’s latest X graduate Loon has added industry heavyweights to its advisory board as the business searches for commercial credibility in the world of connectivity.

As the ludicrous dream starts to become a reality, Loon has added three industry veterans to its ranks. Former McCaw Communications CEO Craig McCaw, Evernote CEO Ian Small and Verizon EVP Global Media & New Business Marni Walden will all be added to the roster, bringing with them years of experience and, perhaps more importantly, connections in the telco space.

“As Loon transitions to a commercial business and looks to partner with MNOs worldwide, we’re adding some serious expertise to our ranks with a new Advisory Board that brings together top wireless innovators with decades of experience in the industry,” Loon CEO Alastair Westgarth wrote in a blog post.

For those who have missed out on this blue-sky thinking idea, Loon is Alphabet’s latest attempt to branch into the connectivity segment. Previous efforts might have been a flop, just have a look at the success brought through Google Fiber, but this is something slightly different; its attempting to create a new segment rather than steal business from established players.

By floating these massive balloons 18-23km above the earth for periods of up to 100 days, the Loon team claims each balloon can create a connectivity cone with coverage to a ground area 80km in diameter. The balloons are fitted with a broad-coverage LTE base station and a high-speed directional link used to connect between balloons and back down to the internet infrastructure on the ground.

In an industry which has constantly struggled to bridge the digital divide due to the expense of deploying infrastructure, this is a genuinely innovative approach to providing connectivity. It helps lessen the financial pressures of delivering the internet, adding to the connectivity mix.

Back in November at AfricaCom, Westgarth gave some insight into the business on the main conference stage. At the time he announced the beginning of a commercial relationship with Telkom Kenya, as well as outlining the wider ambitions of the business. This is an idea which has big commercial potential, most of which will be in the developing markets. These are after all areas where ARPU is low and deployment is staggered. It would appear to be the perfect mix for Loon’s proposal to bring the internet to the masses.

These appointments however perhaps suggest Loon is not a firm satisfied with the developing markets alone. These are three US executives who have considerable experience in the domestic market. Of course, there will be connections in the international space with telcos in the developing nations, but perhaps Loon has spotted an opportunity in the US. These executives would certainly help pave the way for conversations across the homeland.

Of course, this is just a theory and the PR team have been, just as you would expect, pretty evasive when asked the question. However, the digital divide is certainly a challenge in the US. For those who are lucky enough to live in the cities, they’ll have no concept of connectivity challenges, but the vast expanses and challenging terrain of the US open up numerous, huge not-spots, despite what the telcos actually tell you.

Loon has been touted as an innovation for the developing markets but seeing as the US telcos are clueless as how to solve the domestic digital divide, why not. These executives will certainly know the right people in the right places.

The US digital divide – does anyone have a clue what’s going on?

Depending on who you listen to the severity of the digital divide varies greatly. But with so many different opinions, how do you actually know what is going on? And if you don’t have a clue, how can you possibly solve the problem?

This topic is one which carries a particularly heavy amount of political charge, for good reason might we add, and is not limited to the US. Digital inclusion is a buzzword and objective associated with almost every nation due to the increasingly complex and embedded role digital is having in our lives. Every society should be considering strategies to ensure everyone is taken forward into the digital utopia, but the success of such initiatives is questionable.

Here we are going to have a look at the US market, but not question how successful the political administration and telcos have been at closing the gap, but whether they have the right foundations in the first place. To tackle a problem, you have to actually know what it is, and this is where we feel the industry is failing right now.

First of all, let’s start with the obvious issue. The telcos clearly favour the denser urban environments due to the economics of connectivity; providing customers the internet is an expensive job in the beginning. Not only do you have to buy the materials and the equipment, you have to process planning permission, deal with lawyers and do the dirty-job of civil engineering. But, you also to have to have the confidence customers will buy services off you. When there is such a sparse residential population in a region, it can be difficult to make the equation add up.

This is the issue in the US, and perhaps why the digital divide is so much bigger than somewhere like the UK. The land mass is substantially bigger, there are a huge number of isolated communities and connectivity tariffs are much more expensive. The problem has been compounded every time connectivity infrastructure improves, creating today’s problem of a digital divide.

But, here lies the issue. How do you solve a problem when you have no idea what the extent actually is?

An excellent way to illustrate this is with a road-trip. You know the final destination, as does everyone trying to conquer the digital divide, but if you don’t know the starting point how can you possibly plan the route? You don’t know what obstacles you might encounter on the way to Eden, or even how much money you will need for fuel (investment), how many packets of crisps you’ll need (raw materials such as fibre) or how many friends you’ll need to share time at the wheel (workforce).

The industry is trying to solve a problem when it doesn’t understand what it actually is?

The FCC don’t seem to be helping matters. During Tom Wheeler’s time in-charge of the agency, minimum requirements for universal broadband speeds were tabled at 25 Mbps, though this was then dropped to 10 Mbps by today’s Chairman Ajit Pai. Rumours are these requirements will once again be increased to 25 Mbps.

Not only does this distort the image of how many people have fallen into the digital divide, it messes around with the CAPEX and OPEX plans of the telcos. With higher requirements, more upgrades will be needed, or perhaps it would require a greenfield project. Once you drop the speeds, regions will once again be ignored because they have been deemed served. If you increase these speeds, will the telcos find a loophole to ignore them, or might they unintentionally slip through the net?

Under the 25 Mbps requirements it has been suggested 24 million US customers, just over 7%, fall into the digital divide, though this is an estimate. And of course, this 25 million figure is only meaningful if you judge the digital served customers as those who can theoretically access these products.

A couple of weeks ago, Microsoft released research which suggested the digital divide could be as wide as 150 million people. We suspect Microsoft is stroking the figures, but there will certainly be a difference because of the way the digital divide has been measured.

In the research, Microsoft measured internet usage across the US, including those who have broadband but are not able to surf the web at acceptable speeds. Microsoft considers those in the digital divide as those who are being under-served, or have no internet at all, whereas the FCC seems to be taking the approach of theoretical accessibility. There might be numerous reasons people fall into the digital divide but are not counted by the FCC, price of broadband for example, but this variance shows the issue.

Another excellent example is in Okta’s speed tests across Q2-Q3 which have been released this week. The Okta data suggests a 35.8% increase in mean download speed during the last year, ranking the US as the 7th best worldwide for broadband download speeds. According to this data, average download speed across the US for Q2-Q3 was 96.25 Mbps. This research would suggest everything is rosy in the US and there is no digital divide at all.

As you can see there is no consolidated approach to arguing the digital divide. Before we know it campaigning for the next Presidential Election will begin and the digital divide will become another political tool. Republican’s will massage the figures to make it seem like the four-year period has been a successful one, while Democrat’s will paint a post-apocalyptic image.

And of course, it is not just the politicians who will play these political games. Light Reading’s Carol Wilson pointed out Microsoft has a commercial stake in getting more bandwidth to more people so that more people can access their cloud apps and make them more money. Should we trust this firm to be objective in contributing to the digital divide debate? Even if the digital divide is narrowing, Microsoft will want to paint a gloomy picture to encourage more investment as this would increase its own commercial prospects.

The issue which is at the heart of the digital divide is investment and infrastructure. The telcos need to be incentivised to put networks in place, irrelevant as to the commercial rewards from the customer. Seeing at this bridge is being built at a snail’s pace, you would have to assume the current structure and depth of federal subsidies is simply not good enough.

The final complication to point out is the future. Ovum’s Kristin Paulin pointed out those in the digital divide are only those who are passed by fixed wireless, not taking into account almost every US citizen has access to one of the four LTE networks. Fixed Wireless Access will certainly play a role in the future of broadband, but whether this is enough to satisfy the increasingly intensifying data diets of users is unknown. 5G will certainly assist, but you have to wonder how long it will take to get 5G to the regions which are suffering in the divide today.

Paulin points to the affordability question as well. With the FCC only counting those US citizens who cannot access the internet in the digital divide, who knows how many citizens there are who can’t afford broadband. A New York times article from 2016 suggested the average broadband tariff was $55 a month, meaning 25% of the city, and 50% of those who earned under $20,000 would not be able to afford broadband. The Lifeline broadband initiative project is supposed to help here, but Paulin politely stated this is suffering some hiccups right now.

If citizens cannot afford broadband, is this even a solution? It’s like trying to sell a starving man, with $10 in his wallet, a sandwich for $25. What’s the point?

Mobile broadband might well be the answer, Nokia certainly believes a fibre network with wireless wings is the answer, though progress is slow here. Congestion is increasingly becoming a problem, while video, multi-screen and IOT trends will only make the matter more complicated.

As it stands, the digital divide is a political ping-pong ball being battered as it ducks and dives all over the landscape. But, the US technology industry needs to ask itself a very honest question; how big is the digital divide? Right now, we’re none the wiser, and it will never be narrowed without understanding the problem in the first place.

Microsoft suggests FCC is telling Porky Pai’s

New Microsoft research suggests the digital divide in the US is much more prominent than any of the politicians, who are supposedly fixing the problem, would let you believe.

The digital divide is one of the most active political ping-pong balls in recent years, with US politicians seemingly using the desirability of bufferless cat videos to gain support in some of the country’s poorest communities. If you believe what the FCC has been telling the media, this disparity has been getting smaller, though it is still large.

The Microsoft research suggests very little or no progress is being made and the FCC is misleading US citizens.

Looking at the statistics, the FCC claims the digital divide currently stands at 22 million across the US. The threshold seems to be what many would consider basic broadband speeds. With so much of the world become digitized it is critical every person is not only granted access to new opportunities, but also allowed to continue using basic services (such as banking) which are increasingly moving into the digital world.

Looking at the Microsoft research, the team is suggesting around half of US citizens, 162 million, are not using the internet at broadband speeds. The difference between the two numbers is quite staggering, and while it does question to competence at the FCC, the answer might be a bit simpler; it’s all a game of politics.

When looking at the figures it is important to understand the FCC estimates on the digital divide are based on those individuals who can theoretically access the internet. There might be various other reasons why they do not, price for example, but these factors do not seem to be considered. Why you might ask? We suspect it is not politically convenient.

If you look at the last US election campaign trail, the idea of the digital divide was a hot topic. Both President Trump and the Democrat candidate Hillary Clinton suggested tackling the issue would be a high priority for their administrations, buying favour in communities which could (and eventually did) turn the tide in the election.

The FCC is a body which is funded via the pockets of the tax payer, therefore it does have to demonstrate it is fulfilling the objectives set out before it. Holding telcos accountable to theoretically offering broadband access is a much simpler job than ensuring these business price it at a cost which would be deemed accessible.

The Microsoft research is based on those who are using the internet at speeds which would be deemed relevant to broadband. Slow broadband could be deemed as bad a no broadband in some cases, with websites timing out or taking so long to load little could be achieved. With this in mind, stories about kids making use of McDonalds wifi to do homework start to make sense.

As you can see from the graph below, wired technologies do generally take a lot longer to reach 100%, especially in a country which is as vast and varied as the US, though broadband has been sluggish in recent years.

Broadband Adoption

But before you start to congratulate Microsoft too much, you must take into account its position is also political, or perhaps PR-drowned is more accurate. One of Microsoft’s more prominent CSR (Corporate Social Responsibility) initiatives is closing the digital divide. If the problem is much worse than people originally imagined, the corporation coming in to help looks much more glorious.

On both side of the coin you have to take the claims with a pinch of salt. The FCC will continue to make bold statements on progress to ensure favourable light is shed on the Trump administration at a time where the White House will be starting to consider the next election, while Microsoft has a lot to gain commercially through the Airband Initiative, a five-year commitment to bring broadband access to two million unserved US citizens living in rural communities.

Microsoft is not wrong, and we suspect the way it is judging the digital divide is more accurate (usage vs. theoretical accessibility), but it always worth remembering there is always something to gain.

Speak to the right people and Africa is about much more than just the digital divide

Yesteryear’s conversation in Africa was all about balancing the commercial realities of bridging the digital divide, but this year’s AfricaCom has showcased the bigger ambitions of South Africa.

Perhaps we haven’t been giving the right people the podium in the past, but the conversation in Africa has always been focused on the same thing. How do you deliver connectivity to the masses on a continent which has significantly lower ARPU than more developed regions? While this is still a priority, this year’s AfricaCom conference is demonstrating there are bigger ambitions than simply enhancing coverage.

Yesterday we heard MTN’s ambitions to create a more agile organization which operates in the OTT space and can be branded as a digital services beast, and this morning’s presentations had a smart city twist. It might seem odd that we’re discussing such advanced ideas when basic connectivity is an issue, but why not? If Africa is going to compete in the digital era these conversations need to happen now, and these individuals need to be given their time in the limelight. The smart city segment in South Africa is an excellent example.

Looking at Cape Town, Omeshnee Naidoo, the city’s Director of Information Systems, told the audience the city has a fibre spine 1000km long but the project is still at the starting gate. The infrastructure rollout is set to finish in 2021, while the team has recently signed a memorandum of understanding with Google to provide public wifi. The next step is figuring out how the initiative can now incorporate the citizens.

Johannesburg is in a similar position. Lawrence Boya, the smart city Director, said the city also has a fibre spine 1000km long, and currently more than 1500 public wifi spots. The challenge now is optimising the infrastructure and making sure government services are making use of the assets not going down the private route. Boya also highlighted the team are trying to figure out how to take the concept of smart cities down to a personal level for the citizens.

In both of these examples, steady progress is being made and the idea of the smart city might not be that far away. More government help is needed, both from a policy side as Boya highlighted South Africa currently lacks the framework to make smart cities sustainable, but also collaboration. Naidoo suggested public sector across the board in South Africa is far too siloed. To be fair to some local governments however, data sets have been opened up to the general public, providing the fuel for these new ideas.

It shouldn’t come as a surprise to be honest, but perhaps we are guilty of pigeon holing Africa. Too many people, and admittedly Telecoms.com does this too often, suggest the only challenges in Africa are focused on expanding the connectivity footprint. This is patronising and ignores the excellent work which is happening further up the stack. It’s not the case that these initiatives are difficult to find, but maybe we need to give them more airtime instead of taking the easy ‘Africa needs to improve connectivity’ angle.

Google’s Loon is actually starting to look like a genuine business

The idea of using balloons floating 20km above the earth to provide connectivity quite frankly sounds bat-sh*t, but Google’s Loon is actually starting to look like a feasible business.

Google is a company which certainly attracts criticism, but you cannot argue with the creativity which is nurtured. The company has a knack of taking an idea which no-one has much commercial faith in and running with it.

Take Google Maps as an excellent example. For years it was nothing more than a helpful tool for users, but now it is turning into a commercial success. And Loon might just be the next moonshot to make waves. Speaking at AfricaCom, Alastair Westgarth, CEO of Loon, gave some insight into progress being made at the business, but also some of the challenges faced when attempting to use balloons to deliver the internet to some of the worlds digital baron lands.

Loon started life as ‘Project Loon’, one of the freewheeling ideas to come out of the mysterious X labs at Google. The idea was initially conceived in 2012 as a means to connect the five billion people around the world who are still without the internet, and named so purely because of the audacity of the concept. Last year, with the team gathering pace, the ‘Project’ part of the name was dropped and the company spun out into its own separate company. Justification for the confidence came soon after, with the team signing its first commercial customer in Telecom Kenya.

“Something which we’re really excited to announce today is that we have all our necessary regulatory approval in Kenya for our operations,” said Westgarth.

“It took a long time, it took partnership with government, partnerships with regulators as well as the MNO you’re working with. As we went on that journey we’ve been working with Liquid Telecom, Nokia, working with Telecom Kenya to install ground stations to connect the balloons, and that process is almost complete. Also we’ve been making sure we have the interconnection between where the Telecom Kenya ground infrastructure is and where our ground infrastructure is, so when someone finally connects to a balloon the signal goes all the way through from our balloon to Telecom Kenya.”

What Westgarth pointed out is this is not a substitute for traditional infrastructure, but an opportunity to enhance coverage. With each balloon capable of delivering a 5000 square km cone of LTE connectivity, this is an opportunity for those countries who deal with hostile environments to deliver the internet and bridge the digital divide in areas where traditional infrastructure is a no go. Westgarth pointed out around 50-60% of the world’s land mass is yet to receive the connectivity euphoria.

With the technology and concept validated, the challenge now is to make Loon a viable business.

“As much as we want to do good things in the world, we also want to be a profitable business,” said Westgarth.

The technology has more than proved its value after launches in Peru following an earthquake which decimated Telefonica’s network, as well as Puerto Rico following Hurricane Maria. These were ventures which justified the six years of struggles attempting to keep a balloon the size of a tennis court in the air for more than a month, while also keeping it juiced up and automating the steering.

This was a challenge which took ages according to Westgarth, as engineers had to learn how to read wind forecasts, before applying that to the balloons logistics, and then automating the process. It turns out getting a balloon to stay in the same place is a tricky task, as is getting it up in the air in the first place. The engineers had to design a completely custom launch system which, again, has been automated. Then you have to figure out how to monitor the health of the asset, as well as bring it down safely, in the right place and collect all the equipment.

The issue now is on the commercial side. The team are talking to various operators around the world, with particular enthusiasm from Africa and South America, though business is being massaged as the team search for the right balance between CAPEX and OPEX investments from the operators. Right now the balloons operate on an as-a-Service model, though you have to remember this is still early days, a business which is very much taking the first steps of its journey.

The focus will continue to be on Telecom Kenya for the moment, it is important to nail the first project or the business will never be a success, though Westgarth hopes to have more customers in 2019. Africa is seemingly the best opportunity for Loon, though having done most of the testing in South America, there is interest from the operators, while certain Asian markets fit the bill as well.

The balloons are now up there, and staying up, the boring commercial side has to be figured out now. However, this is just another example of how Google’s bold and adventurous attitude can reap rewards; it’s not an accident Google is one of the most influential companies on earth. And now even 20km above it…