SK Telecom and Deutsche Telekom buddy up for 5G

Collaboration is one of the key works currently floating around the 5G world and it seems SK Telecom and Deutsche Telekom haven’t missed the memo.

At a meeting attended by roughly 100 executives, the two operators announced a partnership with the ambition of seeking the promised revenues in the 5G epoch. As it stands, 5G is nothing new. It’s bigger, badder and faster than 4G, but that is not going to satisfy the financial demands of the telcos who need to invest so heavily in the future-proofed networks. The joint venture company created as a result of this partnership will be first tasked with developing new 5G technologies.

Initial focus will be to develop 5G repeater and a 5G in-building solution, as well as a Multipath UDP solution to manage accesses for a seamless connectivity experience and MPEG Media Transport (MMT) technology for low latency media streaming.

“Through partnerships with companies throughout the world, SK Telecom aims to expand beyond the realm of mobile communications to become a global ICT company,” said Park Jung-ho, CEO of SK Telecom. “And I expect this, in turn, will lead to the revaluation of assets and competitiveness of SK Telecom.”

“DT/SK Telecom partnership continues to be of strategic importance for both DT and SK Telecom.” Said Timotheus Höttges, CEO of DT. “We want to work together to make tangible result and strengthen our partnership also with closer technical cooperation.”

This sort of joint investment should not perhaps come as the biggest of surprises considering the pair signed a Memorandum of Understanding (MOU) at the Mobile World Congress Barcelona 2019. There is also the fact Alex Jinsung Choi, DT’s SVP of Research and Technology Innovation, was formerly the CTO at the Korean telco.

As part of the agreement, SK Telecom will also contribute $30 million to DTCP, an investment management group with $1.7 billion assets under management and advisory from Deutsche Telekom. The group is tasked with seeking new investment opportunities in technology, media and telecommunication sectors across Europe, the US and Israel. Moving forward, DTCP will open an office in Seoul to identify new opportunities with SK in Asia.

Looking at the greater opportunities for telcos in the 5G era, this could work out to be a very useful partnership for DT. Offering more products and extracting more revenue from enterprise customers is seem as a key objective, and the Asian telcos have progressed further here. Conversations with the verticals have been in play for longer periods of time and these telcos are closer to creating specific products for specific verticals. DT could certainly learn a thing or two.

Ericsson and DT manage 100 Gbps over microwave

A trial of wireless backhaul over microwave jointly conducted by Deutsche Telekom and Ericsson has managed to top the 100 Gbps mark.

Current commercial microwave backhaul rigs only manage a mere 10 Gbps, we’re told, so this is a fairly substantial increase, albeit in a trial environment. This mega-fast data rate was transmitted over a distance of 1.5 kilometres, which isn’t a bad effort. It involved an 8×8 line-of-sight MIMO with cross polarization interference cancellation (of course), using a 2.5 GHz channel bandwidth in the E-band (70/80 GHz).

“This trial signifies the successful establishment of true fiber capacities over the air using microwave,” said Per Narvinger, Head of Product Area Networks at Ericsson. “This means that microwave will be even more relevant for communications service providers in creating redundant networks as a back-up for fiber, or as a way of closing a fiber ring when fiber is not a viable solution. By carrying such high capacities, microwave further establishes itself as a key transport technology, capable of delivering the performance requirements of 5G.”

“Advanced backhaul solutions will be needed to support high data throughput and enhanced customer experience in the 5G era,” said Alex Jinsung Choi, SVP Strategy & Technology Innovation at DT This milestone confirms the feasibility of microwave over millimeter wave spectrum as an important extension of our portfolio of high-capacity, high-performance transport options for the 5G era. In addition, it represents a game changing solution for future fronthauling capabilities.”

The reason microwave backhaul is suddenly a big deal again is that 5G is going to require a lot more base stations than previous generations, partly because it uses higher frequencies with poorer propagation characteristics. Backhauling all of those new sites with fibre will often be expensive and impractical, so if networks can fall back to a decent microwave link when that happens then everyone’s a winner.

DT CEO moans as bidding in German 5G auction tops €1 billion

Just for a change operators are moaning about the amount they have to pay for licensed spectrum, arguing that leaves less cash for infrastructure.

This time the country in question is Germany, which is in the middle of a 5G auction its operators have had a problem with from the start. According to the regulator bidding has already topped a billion euros and, while it still has a way to go before reaching the orgiastic excesses of the Italian one, muttering about the cost has already begun.

Commenting at its recent AGM, DT CEO Tim Höttges made it clear he has a problem with the fact that not all available spectrum is even being offered in the action, which he reckons is bound to have an inflationary effect. “An artificial shortage of public resources is being created, which may push up the price,” he said. “In the end, there is no money for the build-out.”

There was also some general dissent about excessive regulation, ease and speed of access to new cell sites and access regulation for new fibre networks that is considered counterproductive. But the main theme of his speech at the AGM was ‘sharing and participation’ and featured largely generic sentiments about the importance of communications networks and how totally committed to them DT is.

This auction is expected to hit at least three billion euros but, as we saw in Italy, auctions can easily become frenzied. European operators seem to be feeling increasingly inclined to challenge the terms of spectrum auctions but so far their attempts at legal challenges have yielded little. It does seem odd that the German state has held back a bunch of spectrum, however, and it would be interesting to know the rationale for that.

German Gov told to sell DT stake

The Chief of the Monopolies Commission in Germany has suggested the German government should sell its stake in Deutsche Telekom over conflict of interest fears.

Achim Wamback, the President of the Monopolies Commission, has made the call on the grounds the German government is currently sitting in a suspect position on both sides of the fence, according to local newspaper Wirtschafts Woche. Although there is no suggestion this position is currently being abused, owning a notable share of a major telco, while simultaneously exercising regulatory power over the industry could lead to market abuse. With the 5G auction set to take place in the immediate future, Wamback’s call will make for awkward reading in the Bundestag.

As it stands, the German government owns roughly 31% of DT, the profits of which will contribute to national coffers, meaning there is less of an emphasis on taxing the general public to raise funds. This will only be a minor impact on the taxation strategies, but every little helps for a governing party which has struggled to maintain power and influence in recent years.

If you try to take a purely impartial approach to the situation, you can see Wamback’s point; this is a conflict of interest. Nationalised businesses are always a talking point for the more left-leaning members of society, but they are deeply unpopular when things are going well in the economy.

This is not the first time the German government’s position in DT has been called into question however. During 2017, when Chancellor Angela Merkel’s grip on government was starting to loosen following federal elections, two potential coalition partners pushed for the sale as well. The Freedom Party and the Greens were unsuccessful with their ambition then, though the idea was never quashed.

Part or fully state-owned telcos are certainly not an unusual fixture on the global telco scene, though you have to question whether it aligns with the pro-competition sensitivities of the European Union.

Europe is losing in the race to secure digital riches – DT CEO

Despite politicians around the world declaring the importance of technology and insisting their nation is one of the world leaders in digital, Deutsche Telekom CEO Tim Hottges does not believe Europe is competing with the US and Asia.

This might seem like somewhat of a bold statement, but it is entirely true. The US, led by the internet players of Silicon Valley, have dominated the consumer technology world, while the China and Japan’s heavyweight industries have conquered the industrialised segments. Europe might have a few shining lights but is largely left to collect the scraps when the bigger boys are done feasting on the bonanza.

“Europe lost the first half of the digitalisation battle,” said Hottges, speaking at Orange’s Show Hello. “The second half of the battle is about data, the cloud and the AI-based services.”

In all fairness to the continent, there has been the odd glimmer of hope. Spotify emerged from Sweden, Google’s Deepmind was spun-out of Oxford University, while Nokia and Ericsson are reconfirming their place in the world. There is occasionally the odd suggestion Europe has the potential to offer something to the global technology conversation.

What has been achieved so far cannot be undone. The US and Asia are dominant in the technology world and Europe will have to accept its place in the pecking order. That said, lessons must be learnt to ensure the next wave of opportunity does not pass the continent by. A new world order is being written as we speak, and it is being written in binary.

If Europe is to generate momentum through the AI-orientated economy, it will have to bolster the workforce, create the right regulatory landscape (a common moan from the DT boss), but also make sure the raw materials are available. If data is cash, Europeans are paupers.

As it stands, less than 4% of the world’s data is stored in the European market, according to Hottges. This is the raw material required to create and train complex, AI-driven algorithms and business models. If European data is constantly being exported to other continents, other companies and economies will feel the benefits. More of an effort needs to be made to ensure the right conditions are in place to succeed.

Conveniently, the data collected through Orange’s and DT’s new smart speaker ecosystem will be retained within the borders of the European Union. There need to be more examples like this, forcing partners to comply with data residency requirements, as opposed to taking the easy route and whisking information off to far away corners of the world.

Another interesting statistic to consider is the number of qualified developers in Europe. Recent research from Atomico claims there are currently 5.7 million developers across the continent, up 200,000 over the last 12 months, compared to 4.4 million in the US. Everyone talks about the skills gap, though it seems Europe is in a better position than the US if you look at the number of professional developers alone.

Europe has lost the first skirmishes of the digital economy, and to be fair, the fight wasn’t even close. However, the cloud-oriented, intelligent world of tomorrow offers plenty more opportunities.

Operators stress the need to collaborate over 5G

At Huawei’s MBBF 2018 event some of its operator partners talked up the need for greater collaboration, including among themselves, to make a success of 5G.

Howard Watson, CTIO of BT, said “we truly need interoperability,” when detailing all the many moving parts that need to work with each other in order to make all this 5G hype a reality. He identified the TIP initiative as an example of operators collaborating towards a common goal and was careful to stress that he thinks vendors can still raise their game in that area too.

Being given a keynote at MBBF is also a great opportunity for a spot of self-promotion and Watson didn’t hold back. We were reminded of the recent announcement of EE’s 2019 5G rollout plans and even its most recent 5G trial in London. He also took the opportunity to talk up BT’s group strategy, using the diagram you can find here, which BT is bafflingly keen on, to illustrate his point.

Once Watson got all this corporate chest-beating out of his system he did flag up one interesting feature of BT’s broader strategy: the tight integration of wifi into the overall connectivity picture for BTEE customers. BT is extending the IMS network it currently uses for wifi calling in order to facilitate this and will be doing some clever stuff to solve the pain currently experienced when trying to dynamically switch between wifi and cellular. Creating all this simplicity is very complicated, he concluded.

We also heard from Alex Choi, Head of T-Labs at Deutsche Telekom. He couldn’t resist a bit of light self-congratulation in flagging up its 5G efforts in Berlin (in partnership with Huawei). He too stressed the need for ‘an ecosystem approach’ to 5G and highlighted HD video streaming as a key use-case for consumers.

TIP offers start-ups a new way into the telco business

With internet traffic continuing to accelerate and innovation starting to stagnate, new ideas are needed to stimulate the telco industry. For the Telecom Infra Project team, start-ups could be the answer.

There have of course been numerous examples of start-ups disrupting an industry or creating an entirely new segment. Think of WhatsApp impact on the world of messaging or Netflix on content delivery, though navigating the waters of the telco industry can be a rough ride for start-ups. Few achieve the recognition their ideas deserve, possibly to the detriment of the industry.

“If the big players would buy them [start-ups] at a time when there is a product and they acquire them not to kill the product it would be okay,” said Axel Clauberg, VP of IP End to End & Infrastructure Cloud at Deutsche Telekom and Chairman of the Board at TIP. “We saw a couple of positive examples where it happened in the past, however many good ideas just don’t make it to that stage because when people start running a company and want to get funding by approaching a venture capitalist, suggesting their market is telco, the answer is no, sorry.”

“We were routinely being approached by start-ups who had really innovative ideas, but they were running out of money really quickly,” said Aaron Bernstein, Director, Connectivity Ecosystem Programs at Facebook and a TIP Board Member. “It was impossible for them to get the attention of VCs, and it really comes down to how do they go from zero to dollars as quickly as possible. That is what led to the creation of the TIP Ecosystem Accelerator Centre programme. How do we connect VCs who are interested in infrastructure with start-ups and operators who can create the idea of coaching to get them from zero to dollars much quicker.”

The TIP Ecosystem Acceleration Centre (TEAC) programme is an initiative which looks to creative the wrongs of telco life and bring new innovation into the fray. Several of the world’s largest Telecom Service Providers are hosting TEACs in the UK (BT), Paris (Orange), Seoul (SK Telecom) and Germany (DT), with the aim of creating breakthrough technologies that reimagine telecom infrastructure. TIP is an initiative which is all about doing something different to stimulate innovation, and accessing untapped ideas in the start-ups is certainly one way to go about.

Whether it is the procurement cycle, the cut-throat nature of acquisition or simply running out of funds, gaining traction in the telco world is an incredibly difficult task for start-ups. Perhaps this is the reason the industry moves at such a sluggish pace compared to the internet players of Silicon Valley who embrace the concept of start-ups, but for a healthier ecosystem, all ideas need to be taken into account.

For the moment, the TEACs are small scale, but every idea has to start somewhere. Start-ups could be the saving grace the telco world needs to stimulate innovation and recapture lost revenues, but the ecosystem has to change to embrace them.

TIP 2018 is a wakeup call for the big kit vendors

The third Telecom Infra Project (TIP) Summit marked an further attempt by operators and Facebook to accelerate the development of the telecoms industry.

In his opening keynote Axel Clauberg, TIP Chairman and VP of technology innovation at Deutsche Telekom, was careful to stress that the big kit vendors are an important part of the telecoms ecosystem. But most of the discussions that followed on the first day of the 2018 TIP Summit was focused on fixing a telecoms kit market that TIP participants clearly feel is underperforming.

Clauberg spoke about the persistent exponential growth in data traffic that is set to continue for the foreseeable future. He stressed that, while he’s not saying kit vendors don’t do enough, the industry collectively needs to do better. The clear inference is that if we leave it to the incumbent vendors things won’t move quickly enough.

A lot of what this comes down to is putting into practice all the worthy talk of agility, devops, etc that everyone agrees is a great idea in principle. Through a network of ‘community labs’ minimum viable products are built and deployed. The message is that the traditional constraints imposed by the protracted standardisation process and exhaustive testing just won’t cut it anymore and telecoms needs to get a bit more Silicon Valley in its approach,

This seems to be where Facebook comes in. One of its core strategic needs is active user growth and it it’s running out of opportunities to do that in developed markets. So its quest for ‘the next billion’ is heavily dependent on improving access to connectivity in less developed regions. This requires some new thinking on both the technological and commercial fronts.

So TIP claims to be all about novel thinking, rapid turnaround and expanding the telecoms ecosystem to a broader range of players, including startups that traditionally find it hard to engage with operators, via its TEAC programme. The general aim seems to be to open up the whole ecosystem via things like open interfaces such that it undergoes a transformation equivalent to the computer industry a generation ago. Its all about more players, more choice and more flexibility.

You can see a summary of its many working groups below, which illustrates how broad its ambitions are. Another speaker said TIP reckons it can bring about a 30% reduction in total cost of ownership of running a network. This saving will ultimately come of if the pockets of the big kit vendors. Nokia is a TIP member but there’s no sign yet of Ericsson and Huawei, for whom the very existence of TIP poses some serious existential questions.

TIP 2018 working groups

DT writes €20bn cheque to target 99% 5G coverage by 2021

Deutsche Telekom has unveiled a ‘plan’ to make 5G a reality, including a commitment to spend €20 billion by the end of 2021 to roll it out.

Should the plan prove to be a success, DT plans to have 5G to 99% of the population by 2025, while geographical coverage would be 90%. The team believe these coverage ambitions are achievable for 4G by 2021.

“The digitalization of Germany is a challenge for our society as a whole,” said CEO Tim Höttges. “Our part is the networks. We take this responsibility seriously, which is why we are focusing on investment, innovation, and partnerships.”

To fuel the 5G ambition, DT has connected 22,000 of the 27,000 mobile base stations with fiber, and will be adding at least 2,000 each year through to 2021 to take the total up to 36,000. Not all of these stations will be equipped with 5G equipment to start with, though this is a part of the plan which is murkier. The less details available, the less accountable DT becomes we suppose.

5G is only part of the connectivity plan, with the fixed network getting its own upgrades. One of the first aspects of the plan is to initially install fiber to the curb, before extending the fiber to the home at a later date. This approach has been criticised, though DT has pointed out it is a fairer means to improve connectivity for a greater number of residents across the country.

“Of course we could have installed fiber to the home directly, but due to the shortage of underground construction capacity and the high investments needed, we’d only be serving 20% of households at most, instead of the 80% we do now,” said Walter Goldenits, CTO at Telekom Deutschland.

Progress is being made in Germany, the team have laid the 500,000th kilometre of fiber across the country this week, though it does still lag behind leaders in the European market. DT claims 250 Mbps are already available to around ten million households, while the ambition is to expand this footprint to 28 million by the end of 2019.