Three goes live with 5G broadband service

UK telco Three has become the latest to join the 5G bonanza with the launch of its 5G Fixed Wireless Access (FWA) service in London.

With plans to launch the service in 25 cities throughout the UK, the FWA proposition looks to be a challenger to traditional broadband services. We have been told the new service will promise speeds of 100 Mbps between the hours of 8pm and 10pm, peak times for streaming in the living room, offering an alternative to fibre broadband for speed hungry customers.

“Three’s 5G is going to revolutionise the home broadband experience,” said Three CEO Dave Dyson. “No more paying for landline rental, no more waiting for engineers, and even a same day delivery option. It really is the straightforward plug and play broadband that customers have been waiting for.

“We’ve taken a simple approach with one single truly unlimited data plan to give customers the opportunity to fully explore 5G and all its exciting possibilities. The ease and immediacy of it all means home broadband using 5G is going to be key to the future of the connected home.”

Looking at the deal offered, there are some interesting elements. Three is promising a ‘plug and play’ experience, meaning customers will no-longer have to wait for an engineer to start the service, while contracts can be taken to new homes if the customer moves. This of course depends on whether Three has launched 5G in the new area, though removing the dependence on physical lines into the home can offer some benefits.

Although this does look like a promising opportunity to disrupt the traditional home broadband market, questions still remain over the long-term viability of FWA as an alternative to the delivery of connectivity over physical infrastructure.

There is a business case for FWA in the remote regions, where the commercial attractiveness of connecting ‘the last mile’ with fibre falls dramatically, though these are not the areas which Three will be targeting to start with.

The launch today is in certain areas of London, while Three is promising to connect 25 towns and cities by the end of the year. These will most likely be the more urbanised areas, this makes commercial sense after all, perhaps targeting regions where fibre penetration is lacking.

As Heavy Reading Analyst Gabriel Brown points out, £35 a month is not overly aggressive pricing, and the 100 Mbps download speeds are very achievable. Users might experience higher speeds during the day, though the proposition might well be more attractive financial and performance wise than many cable services today.

This is where Three could find its appeal. As Brown points out, accessibility to fibre services is a challenge today in the UK. If Three is able to target the regions where Openreach, Virgin Media and the fibre ‘alt-nets’ are missing, there could be a tailored audience for the speedy and reasonably priced 5G FWA service.

Played smartly, Three can drive additional revenues through the business. And while Three does already have 800,000 broadband customers with its 4G FWA service, this could be a notable driver of new revenues for the business. 5G network deployment is going to be an expensive business, therefore sweating the assets in every way possible will be an important factor.

This product opens up a new world for the challenger brand. Over the last few years, subscriber growth in mobile has been relatively flat, though should Three push towards the convergence game, there could be new opportunities to engage new customers with a new message.

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.

Unlimited data is inevitable with 5G, but try telling operators that

We’re quickly moving into the 5G era and many assume the concept of unlimited data bundles will be commonplace, but how will the telcos fare in this new world?

As it stands, the telcos are under pressure. This is not to say they are not profitable, but many shareholders will question whether they are profitable enough. Tight margins and a squeeze on core revenue streams are common enough phrases when describing telco balance sheets, but this could get a lot worse when you factor in unlimited data packages.

As Paolo Pescatore of PP Foresight pointed out, when you offer unlimited data you are effectively killing off any prospect of revenue growth per subscriber in the future. In some markets, there are still fortunes to be made, but in some, such as the UK where 4G subscription penetration is north of 100%, where are you going to make the growth revenues from when consumers are demanding more for less?

More consumers are seeking unlimited or higher data allocations but are not willing to pay for the experience. Some MNOs might be able to resist, but the more rivals who offer such tariffs the more the rest will be forced into line. It’s the race to the bottom which is profitable in the short-term, but growth will end quickly. The price per GB is only heading one direction and unlimited data allocations will end the prospect of upgrading customers.

O2 fighting for air

This is the conundrum which the telcos are facing in the UK right now. All four have announced their 5G intentions and all four are promising big gains when it comes to the next era of connectivity.

Starting with O2, the only one of the four MNOs not to have released 5G pricing to date, this is a telco which looks to be in the most uncomfortable position. Over the last few quarters, the management team has boasted of increased subscriber numbers, but this can only go on for so long in the consumer world. Soon enough, a glass ceiling will be met and then the team will have to search for new revenues elsewhere.

This is of course assuming it plans to go down the route of unlimited data, it might want to stick with the status quo. That said, if everyone else does, it will not be able to fight against the tide for fear of entering the realm of irrelevance.

The issue here is one of differentiation. The idea of attracting new customers by offering ‘bigger, meaner, faster’ data packages will soon end and telcos will have to talk about something else. O2 does have its Priority loyalty programme, but with rivals launching their own version this USP will fade into the noise.

Differentiation and convergence are two words which have been thrown around a lot over the last few years, though O2 has thus far resisted. Last year, CEO Mark Evans suggested he was not bought into the convergence trend and would continue as a mobile-only telco, though this opinion does seem to be softening.

If O2 is going to be competitive in the almost inevitable era of unlimited data, it will have to source growth revenues from somewhere. It is making a push into the enterprise connectivity world, which will bring new profits to the spreadsheets, though does it want its consumer mobile business to stand still?

Bundles of fun

This is where the other telcos in the UK have perhaps got more of a running start in the 5G era. EE has its connectivity assets in broadband and wifi to add value, as well as a content business of some description. Three is already known as the data-intensive brand, while its FWA push will take it into some interesting connectivity bundling options. Vodafone also has FWA, a fibre partnership with CityFibre and is arguably the leader in the enterprise connectivity market. The rivals are offering more than mobile connectivity as a stand-alone product.

Looking at Vodafone to begin with, the recent announcement is certainly an interesting one. The innovative approach to pricing, tiering tariffs on speeds not data allocation, will attract some headlines, while it is also super-charging its own loyalty programme, VeryMe. It has secured content partnerships with the likes of Sky, Amazon, Spotify and gaming company Hatch, while its FWA offering also includes a free Amazon Alexa for those who sign-up early enough.

Combining the FWA product or its fibre broadband service, courtesy of CityFibre, also gives them the ‘connectivity everywhere’ tag, a strength of BTs in recent years, to allow them to communicate and sell to customers in a different way. Perhaps it is missing a content play to complete the convergence bundle, but it is in a strong position to tackle the 5G world and seek additional revenues should the unlimited craze catch.

The same story could be said of Three. With the acquisition of UK Broadband, it has forced itself into the convergence game and kicked off the ‘race to the bottom’ with an unlimited 5G data offer. As long as you have a Three 4G contract, you can get 5G for no additional cost, assuming you have a 5G compatible phone of course.

Three’s strength and weakness lies in its reputation. It is known for being the best telco if you have an insatiable data appetite, this works very well for the 5G era, though it is also known for having a poor network. Three regularly features at the bottom of the network performance rankings, especially outside of the big cities where it has not done nearly enough to satisfy demands.

This will of course change over the next couple of months. Three is working to improve its network with additional sites and a new Nokia 5G core, however it will have to do a lot to shake off the reputation is has acquired over the last few years.

EE is perhaps the most interesting of the four. It has lost its position as the market share leader when it comes to 4G subscriptions, but it does have the reputation for being the best in terms of performance throughout the country. It is regularly the fastest for download speeds, but its 5G pricing is by far the most expensive to be released so far.

That said, with the BT assets it has for wifi and broadband, as well as the content options, there is plenty for the consumer to be interested in. Should BT be forced to readdress the pricing conundrum, it might not have the fear regarding a glass ceiling on revenues as there are plenty of other products to engage the consumer. It will be able to find additional revenues elsewhere.

MVNO no you didn’t

Outside of the MNOs, you might also start to see some competition. MVNOs are nothing more than ‘also rans’ today, but Sky has officially entered the 5G race. This is an interesting competitor, one who could cause chaos to the status quo.

Firstly, understand mobile is not the primary business for Sky. This is an add-on, where it is seeking to drive additional revenues and attract more customers through bundled services. It is the leader in the UK when it comes to premium content and has a thriving broadband unit also. Sky can add services on top of connectivity to make itself seem more attractive than the traditional mobile service providers.

Then again, there are only a couple of MVNOs who can pose this challenge. Sky is one, while there are persistent rumours Amazon wants to get involved with the connectivity game and Google has its own Fi service. These are also companies who are at the mercy of the MNOs in terms of the commercial agreement with the MVNOs, so damage is likely to be limited unless one network owner decides to go down the wholesale infrastructure route.

But you cannot ignore these companies. They are cash-rich, constantly searching for new ways to make money and have incredible relationships with the consumer. They are also the owners of platforms and/or services which are very attractive to the mass market; bundling could be taken into a new context with these firms.

Diversity is our strength

This is of course only looking at the services which are common throughout telco diversification plans today, there are other options. Orange has launched a bank, has experimented in energy services and is making a move towards the smart home in partnership with Deutsche Telekom. Over in Asia, gaming is an important element of many telcos relationships with consumers and this trend is becoming much more prominent in the European markets also.

Elsewhere, the smart home could certainly offer more opportunities for telcos to add-value to an emerging ecosystem, while the autonomous vehicles offers another opportunity and so does IOT. The issue which many of these telcos are facing is competition from the OTTs. Arguably, the battle for control of the smart home might already have been won by the OTTs, though the same could be said for autonomous vehicles and IOT.

In many of the emerging segments, telcos will remain a connectivity partner though they certainly need more than that. This will remain a consistent stream of revenue, though it will also sleepwalk telcos to utilitisation. In IOT, as an example, the major cloud players are crafting business units to engage enterprise businesses for edge and IOT services; this is a market which the telcos would love to capitalise on for both enterprise and consumer services.

Security is another which is increasingly becoming a possibility. The concept of cybersecurity is generating more headlines and consumers are becoming more aware to the dangers of the digital world. Arguably, the telcos are in the strongest position to generate revenue from this segment; there is trust in the brand and they have largely avoided all the scandals which are driving the introduction of new regulation.

Unlimited data is certainly not commonplace today, but with the services of tomorrow promising to gobble up data at an unfathomable pace, it would surprise few to see more people migrating to these tariffs. The question is how you make money once you have migrated everyone.

Diversification and the acquisition of new products is not a simple task, but then again, it is becoming increasingly difficult to imagine how single revenue stream telcos will be able to survive in the world of tomorrow.

 

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Vodafone UK enters the 5G FWA fracas

Vodafone UK has debuted its 5G Gigacube to further expand its connectivity portfolio, perhaps gaining more of a foothold in the broadband market.

Although Vodafone is primarily associated with the mobile segment in the UK, it has been making positive moves in the broadband market over the last twelve months. Having signed a partnership with CityFibre last year to deliver fibre broadband services, the 5G Gigacube offers another twist to the portfolio.

Vodafone claims the 5G Gigacube can offers speeds of up-to 1 Gbps, the dreaded conditional statement which been suggested to mislead customers, while 64 devices can be connected simultaneously, and the range can be as great as 90 metres. There are still a lot of unknowns and nuanced language in these statements, but it does seem to be priced competitively as you can see below:

Data allowance 100 GB 200 GB Unlimited
12-month contract £25 (£83 upfront) £33.33 (£42 upfront) £41.67 (£42 upfront)
30-day contract £25 (£271 upfront) £33.33 (£271 upfront) £41.67 (£271 upfront)

Interestingly enough, there have also been some clues into the way in which it will be marketed.

Due to the offering being mobile by nature, there aren’t geographical limitations, in theory. If you are a small business without a fixed office, the plug and play feature allows you to effectively carry connectivity wherever you are. This could be applied to a variety of situations, such a pop-up restaurants or bars, and could potentially open-up new markets for broadband products.

It also tackles another interesting challenge in the consumer broadband market. When a customer moves home, there is no guarantee that customer will be retained; it depends on offers which are available wherever that customers actually moves to. With a plug and play, mobile driven, broadband solution, contracts can be retained irrelevant as to where the customer lives.

Although we have been teased with the launch of the 5G Gigacube over the last couple of weeks, its debut today completes the puzzle when it comes to convergence.

Convergence is one of the most consistent buzzwords over the last couple of years, but that is for a very good reason. Not only are convergent customers more likely to be retained year-on-year, it increases the profitability of subscriptions. Most telcos would rather have one million customers taking two services than two million taking one, and this product offers Vodafone another opportunity to make the most of the buzz.

Announced earlier this month, as the telco switched on its 5G networks, Vodafone will offer a convergence connectivity product, combining a home wifi solution with mobile for £50 a month. And to sweeten the deal, customers will also receive an Amazon Alexa speaker for free.

Vodafone has largely been viewed as an ‘also-ran’ over the last decade, O2 and EE have built a considerable leadership position, though the former-market leader has been rebuilding over the last few years.

The turnaround in the business does seem to coincide with the introduction of Vodafone UK CEO Nick Jeffery. During his tenure, the team has built a converged network, Redstream, addressed customer service with the introduction of chatbots, the retirement of legacy IT systems, reinvigorating the brand and creating a business which is contextually relevant. Although this is not mission complete, you can see the progress which has been made.

Vodafone feels like a new business at the moment and it couldn’t have happened at a better time. The world is about to enter into a new era of connectivity with 5G and FWA challenging traditional home broadband. Vodafone is positioning itself very well.

Industry says Government should focus on outcomes not specific tech

Being forward looking is an excellent quality to have in a national government, but when objectives are focused on technology not the desired outcome, it is a risky approach.

In this instance, it seems the UK Government can do nothing right. For years, the focus of the fixed industry was G.Fast not fibre, believing that the connectivity half-way house was a sensible strategy. There might have been adequate arguments made at the time, but with hindsight they do seem underwhelming.

Now the position is to drive towards a full-fibre, connected nation, with targets to connect every household with the future-proofed lines by 2033. However, some are now questioning whether this is an over-correction.

The issue seems to be that the UK Government is focused on technology, not delivering the desired outcome.

“We will cover the overwhelming majority of the UK with fibre, but there are also other technology developments which will contribute to a connected Britain,” said Clive Selley, CEO at Openreach. “These include FWA [Fixed Wireless Access] and low-orbit satellites, and we have mentioned balloons, we should be open-minded.”

Fibre should be the objective but doesn’t mean you have to deliver it to everyone and everywhere tomorrow. As Selly pointed out during his time on stage at the Connected Britain event, connecting the first 80% of premises to fibre is not an issue. It is expensive, it is time consuming, but its not complicated. The next 10% is going to be much more difficult, and the final 10% is where they haven’t worked it out yet.

Another interesting point is whether customers actually need fibre connectivity right now. In the desire to go end-to-end, you have to wonder whether fibre is needed for the last-mile. Long-term, of course it will be necessary, but it is about addressing the desire not the technology.

“In my opinion, government has been focusing too much on full-fibre,” said Three CEO Dave Dyson. “I would like the government to take a step back and understand what people actually need. Full-fibre is an answer, but it is not the only answer.”

Again, we would like to emphasise fibre should be the long-term aim. But, you have to ask what the actual objective of the UK Government is. In this case, it is to deliver faster connectivity to citizens across the entire country, irrelevant to the local environment.

Understanding fibre is the long-term objective, but the mid-term objective is accessibility to faster and more reliable connectivity is an outcome-focused strategy. This is where fixed-wireless access can play a role, as can low-orbit satellites and even balloons. The last mile can be delivered through a variety of options, as long as the foundation of the network is fibre, giving the option to extend in future years.

Unfortunately, it seems the UK is in a difficult position of its own making. In not embracing fibre earlier, it is behind the trends. A commitment to full-fibre might have been the right call 6-7 years ago, but the situation has changed. The current strategy does not necessarily present the UK with the best route towards the full-fibre nation; the plan should be evolved to consider context.

Here is pragmatic example, how many people actually need speeds north of 150 Mbps right now? Not many. Fibre is the best option for the long-term, but focusing on developing the foundations, delivering the experience which customers need and expect, while also creating a more sustainable approach to ROI should be the mid-term objective.

As Dyson pointed out, FWA offers the team a more readily available opportunity to drive revenue on a per-user basis. It allows them to react to customer demand as opposed to forecasts. However, for the proposition to work as promised fibre needs to be rolled at least to the cabinets everywhere.

This is a divisive topic. Some believe the telcos should bite the bullet and simply pay to get fibre everywhere. Holding them accountable is perfectly reasonable, but you have to also take into account the telcos have to make money as well.

When you consider context, financial demands and future-proofing the network, the equation is a very difficult one to balance. Fibre should be the long-term objective, but right now the demands are for faster broadband while also addressing the appetites of those in the rural communities. The other options to satisfy the connectivity demands of today should not be ignored, which is perhaps what is being done with the Government’s hardcore focus on full-fibre.

Strategies should be outcome focused not technology defined. This is perhaps the problem the UK is facing today.

We’ve hit the go button on 5G, now what?

If the years of sleepless nights and hype are actually going to mean anything, 5G has to deliver more than 4G possibly could, and right now it isn’t.

This might sound like an incredibly negative comment, but it is a realistic assessment of where the industry actually is today. Hitting the on button was simply the first phase, it delivers an enhanced 4G connectivity environment. The big question is what comes next.

“Is 5G a premium product?” Ovum’s Dario Talmesio asked at 5G World today. “Of course, it is a premium product. This is a step change to what we can experience on today’s products in 4G.

“At the moment, the monetization of 5G is similar to that of 4G. This is the most simplistic monetization model. But we won’t be able to do anything new until ‘real 5G’ emerges.”

This is where the big challenge for the industry is about to emerge. The first usecases are simplistic ones, building on the ‘bigger, badder, faster’ mentality of the telecommunications industry. It makes the ‘pipe’ bigger, allowing more data to flow through it, and faster, enabling faster download speeds.

An example of this enhanced connectivity model is over at Verizon. Speaking at the same event, Ronan Dunne, President of Verizon Wireless, pointed towards the increasingly worrying strain being placed on the network. 5G allows Verizon to meet these demands, reduce the strain on the network and increase profitability through technology efficiencies.

Another gain is on the convergence side of telecoms. In areas where Verizon does not have a fixed network, Dunne pointed towards the FWA alternative which 5G enables. Three UK is another company which is exploiting this product and there are numerous other telcos who are eyeing up FWA as a proposition to build bigger product portfolios.

Customers might be willing to pay for this incremental upgrade, but it doesn’t fix the bigger issue in the telco space; adding extra value, and therefore seeking new revenues.

This is not a new idea. One of the basic ambitions of 5G is to evolve the telco from a communications service provider to a digital service provider. But how are the telcos getting on in searching for pastures new?

As you can see from the slide below, it hasn’t been the most ambitious start.

INSERT PIC OF DARIO PRESENTATION

Although you can see there are ambitions to take advantage of newly emerging segments, these are areas which the telcos already operate in. Entertainment, media and smart cities will certainly add some weight to the telco cause, but they will have to venture further afield.

SK Telecom is one company which is pushing the boundaries of the acceptable norm, though this should not really come as a surprise considering the leadership position South Korea has crafted.

During his own presentation, Takki Yu confirmed SK Telecom is challenging itself to seek out new ideas and business cases.

“5G era has begun, let’s do anything which we can imagine,” said Yu. “That is the key message from SK Telecom.”

An interesting point made by Yu was about the mentality of SK Telecom. The team is aiming to bring anything which would be considered offline today into the mobile mix. It does sound very ‘blue-sky thinking’, but it is important to think about new ideas. Many telcos will claim they are doing this, though there is little evidence to support the PR plugs.

Looking at the POCs which SK Telecom is exploring, there is quite a bit of breadth. In partnership with the Sinclair Group, SKT is working towards 5G-based broadcasting services, it is investigating the potential of a 5G-hospital with Yonsei Severance, with WeWork it is working towards a 5G-smart office, with the Smart Manufacturing Innovation Center the team is exploring the next generation of smart factories and it has set-up a smart city in the Incheon Free Economic Zone.

As Ovum’s Dario Talmesio pointed out, the issue many telcos are facing is a lack of industry-specific knowledge. Creating these solutions for the verticals, and integrating them appropriately, cannot be done if the telcos remain as a silo. This is what the Asian telcos have been doing very well over the last few years; partnering with industry verticals. Unfortunately for the European telcos, they are playing catch-up here.

Right now, the world might be wowed by the incredible speeds which are being delivered through 5G networks, but the truth of the matter is that this will not last forever. The wow-factor will fade, and soon enough customers will realise it isn’t actually that innovative. Soon enough, the 3GPP will unveil Release 16 and ‘real’ 5G will emerge. This is where the telcos will have to be very attentive or risk being relegated to the role of connectivity partner.

Three enters the 5G fracas with FWA offering

Three is promising to launch a 5G home broadband service in London in August, before rolling out the connectivity euphoria for both mobile and broadband in 25 cities by the end of 2019.

With EE and Vodafone already moving through the gears in the 5G race, it was never going to be long before Three made its debut. Initial plans had seen Three as a little big sluggish in the home-straight, though it appears the business is ramping up pretty quickly.

“It’s clear that consumers and businesses want more and more data,” said Three CEO Dave Dyson. “We have the UK’s best network for data and we have led the market on customer usage on both 3G and 4G technologies. We have worked hard over a long period of time to be able to offer the best end to end 5G experience. 5G is a game changer for Three, and of course I am excited that we will be the only operator in the UK who can offer true 5G.”

For the moment, the Three focus is going to be exclusively on fixed wireless access. This should not come as too much of a surprise, Three has been plugging the FWA business case over the last couple of months and it does offer the team new products to shout about. Three is somewhat of a specialist in the disruption game and have been eyeing up the fixed market since its acquisition of UK Broadband in 2017. Most might associate 5G with mobile, but it does present Three with a very interesting opportunity.

“It is the home broadband offering that really catches the eye,” said David Warner of uSwitch. “Until now, much of the discussion of 5G’s arrival has centred on how it will improve mobile connectivity and speeds, but its potential to upend the broadband market, and so quickly, is now being explored by Three.

“Those in areas or buildings without full fibre installed may now be able to choose the convenient option of plugging a 5G router straight into the wall and being online on ultrafast speeds in seconds. By the time full fibre does reach many people – with 2033 still the government’s target for full coverage – they may very well be perfectly happy with 5G mobile broadband connections.

That said, it won’t be long before Three enters the mobile fray. Network tests are currently being undertaken in the likes of London, Cardiff, Glasgow, Birmingham, Manchester and Liverpool, all of which will figure into the 25-strong list of cities to get the 5G euphoria before the end of the year. There are a couple of questions which remain however.

Firstly, you have to wonder what devices will be sold through Three tariffs once the mobile products are rolled out to the masses. As it stands, Three has two devices listed on its website. One is the HTC 5G Mobile Smart Hub, and the second, the Huawei Mate X.

While there is a risk associated with the Huawei device, Three has said it will continue to sell the Mate X though consumers will be confronted with warning signs to ensure an informed purchasing decision is made. Both EE and Vodafone have stopped taking pre-orders for the Huawei device, and will not until the OS situation has been cleared up. There are of course other devices on the market, but it does seem the details are yet to be finalised. Three has said these offers will be unveiled closer to the mobile 5G launch date.

Secondly, how will Three approach the pricing conundrum.

Three’s traditional strategy in the UK is to undercut rivals. The team has traditionally targeted those consumers who are heavy data users, and it would be a sensible bet to assume this successful plan will continue into the 5G era, but who knows.

The challenge which consumers are facing at the moment is price. There will be thousands who upgrade as soon as possible, but normal people will look at the price of 5G connectivity (for a decent data bundle) and struggle to justify the additional expense. EE and Vodafone have unveiled their tariffs, and we suspect they are north of where the market will settle.

The question is how much of a challenge to this duo will it present? The conditions are perfectly suited for Three to roll out lower tariffs and disrupt on price once again, but only time will tell as to whether it can justify such a plan considering the expense of deploying 5G networks in the first place.

FCC Chairman convinced by T-Mobile/Sprint concessions

FCC Chairman Ajit Pai has publicly stated he believes the concessions made by T-Mobile US and Sprint are enough to ensure the merger would be in the public interest.

Over the course of the weekend, rumours emerged over concessions the pair would have to make to get the support of the FCC, though rarely are sources so spot on. The merged business will now have to commit to a nationwide 5G deployment within three years, sell Sprint’s prepaid brand and promise not to raise prices during the rollout years, if it wants the greenlight of the FCC.

What is worth noting is this is not a greenlight just yet. Pai has said yes, though he will need a majority vote from the Commissioners. Commissioner Brendan Carr has already pledged his support, and we suspect Michael O’Reilly will in the immediate future also. The Democrats might want to throw a spanner in the works, but this would be largely irrelevant with O’Reilly’s support.

“In light of the significant commitments made by T-Mobile and Sprint as well as the facts in the record to date, I believe that this transaction is in the public interest and intend to recommend to my colleagues that the FCC approve it,” Pai said in a statement.

“This is a unique opportunity to speed up the deployment of 5G throughout the United States and bring much faster mobile broadband to rural Americans. We should seize this opportunity.”

As you can imagine, T-Mobile US CEO John Legere certainly has something to say on the matter.

“Let me be clear,” Legere stated in a blog entry. “These aren’t just words, they’re verifiable, enforceable and specific commitments that bring to life how the New T-Mobile will deliver a world-leading nationwide 5G network – truly 5G for all, create more competition in broadband, and continue to give customers more choices, better value and better service.”

The first commitment made by T-Mobile US and Sprint is a nationwide 5G network. Considering Legere has been claiming his team would be the first to rollout a genuine 5G network for some time, it comes as little surprise the FCC will want to hold him accountable.

Over a three-year period, presumably starting when the greenlight is shown, the new 5G network will cover 97% of the population. 75% of the population will be covered with mid-band spectrum, while the full 97% will have low-band. This is a very traditional approach to rolling out a network, as it meets the demands of capacity and efficiency, though there is a sacrifice on speed.

Perhaps more importantly for the FCC, the plan also covers objectives to bridge the digital divide. 85% of the rural population will be connected during this period, increasing to 90% after six years. This is not to say all the farmers fields will be blanketed in 5G, though it does help provide an alternative for the complicated fixed broadband equation in the rural communities.

Moving onto the divestment, selling Sprint’s Boost prepaid brand seems to be enough to satisfy the competition cravings of Pai. What is worth noting is this will not be a complete break-away from the business as it will have to run on the T-Mobile US network. Unfortunately, MVNOs in the US are not as free to operate as those in Europe, as switching the supporting network would mean have to change out all the SIM cards.

This becomes complicated as you do not necessarily know who your customers are in a prepaid business model. The situation certainly encourages more competition, it will after all not be part of the T-Mobile US/Sprint family anymore, but it is far from a perfect scenario.

Finally, Legere has promised tariffs will not become more expensive during the deployment period, another worry for the FCC should the duo want to meet the ambitious objectives to compete with AT&T and Verizon. However, it does appear Legere is promising 5G tariffs will not include a premium either.

And now onto the other side of the aisle. Commissioner Jessica Rosenworcel has tweeted her opinions on the concessions and it appears she is not convinced.

“We’ve seen this kind of consolidation in airlines and with drug companies. It hasn’t worked out well for consumers. But now the @FCC wants to bless the same kind of consolidation for wireless carriers. I have serious doubts.”

Rosenworcel has also suggested the decision should be put out for public consultation. We suspect Pai will want to avoid this scenario, as it would be incredibly time-demanding; the Chairman will want the merger distraction off his desk as soon as possible.

Commissioner Geoffrey Starks is yet to make a comment, but DO NOT, I repeat, DO NOT go on his Twitter page if you haven’t watched the latest Game of Thrones episode.

We understand the Democrat and Republican Commissioners are going to be at each other’s throats over pretty much every decision, however trolling any innocent individual with a GoT spoiler is a low blow.

Starks and your correspondent are going to have some issues.

When FWA starts to make sense

Fixed Wireless Access (FWA) attracts a huge range of opinions, but at Light Reading’s Big 5G Event, Starry put forward an interesting case.

Starry Internet is a fixed wireless broadband Internet service provider, founded in January 2016, operating across a small number of US cities. What makes Starry different from many of the other cable providers is an exclusive focus on FWA.

As a technology, FWA has certainly split opinion. Some see it as a 5G usecase which could justify the vast expenditure on the future-proofed networks, while others believe it is a distraction from what should be the ultimate goal; rolling out full-fibre broadband to all premises.

While we can see there are some niche usecases for FWA, we do not believe it is a viable alternative for fibre-based broadband solutions, the Starry proposition makes a valid case which will be attractive for some broadband challengers.

“People are dying for choice,” Starry COO Alex Moulle-Berteaux said during his keynote session.

Over the first 18 months of Starry’s existence, the firm managed to set up a FWA network which covers two thirds of Boston premises. Although Moulle-Berteaux hasn’t unveiled subscription numbers, the progress has been solid enough to fuel expansion into other US cities.

What is remarkably impressive is Starry managed to deploy this significant FWA network in Boston for less than $5 million.

Moulle-Berteaux also claims the firm has experienced a 20% uptake when connecting a multi-dwelling residence in the first 60-90 days. Promising 200 Mbps, down and up, the team are targeting the cord cutters, offering internet connectivity exclusively, potentially reduce monthly out-goings.

This is why the FWA case is attractive to some. Low cost of entry, Moulle-Berteaux highlighted the use of unlicensed spectrum is helping here, the ability to deliver high speeds and speak to a generation of customers who are increasingly becoming sick of the traditional relationship with connectivity and content providers.

That said, while this is an attractive proposition, we can’t see around the idea that FWA is incredibly short-termist.

Yes, the speeds delivered now are promising and there are certainly prospects to increase further, there will be limitations. Mobile connectivity is always going to be second-best when measured against fibre-based broadband, because physics.

Fibre is the fastest and most reliable connection. It works by emitting and receiving a light signal through the cables that represents binary code. FWA can deliver speeds faster than copper-based broadband, but it’s airborne and a little more prone to external factors. FWA is an alternative, but telcos can get distracted by short-term gains leading to long-term pain. Just look at the BT decision to prioritise G.Fast over fibre. It’s a similar business decision.

However, the US is a market where there might be a valuable role for FWA propositions. As Moulle-Berteaux highlighted, customers like choice and due to the lack of competition in the broadband market, are becoming frustrated with their current providers. This frustration will explain why Starry has been successful in hoovering up subscriptions.

We’re still not convinced by the FWA promise. Fibre is a long-term solution which all providers should be striving towards and there is a risk FWA will become a distraction. However, there are cases where the value is incredibly high. In the US, where many customers are becoming frustrated with a lack of competition, we might have a validated usecase.

Sunrise plugs FWA in Swiss 5G launch

Swiss telco Sunrise has jumped on the 5G bandwagon with the launch of a Fixed Wireless Access (FWA) offering aiming to bridge the digital divide.

Like the UK, Switzerland is one of the more sluggish European nations when it comes to fibre penetration. According to the latest statistics from the Fibre to the Home Council, Switzerland currently has FTTH penetration rate of 7.8% across the country, potentially creating a digital divide. This offering from Sunrise is using such a chasm to promote its FWA offering.

“In the digital age, residential and business customers alike need fast Internet with speeds of up to 1 Gbps,” said Olaf Swantee, CEO of Sunrise. “But in many places, customers are waiting in vain due to a lack of fiber optic connections.

“With 5G for People we are filling this gap, e.g. in Unterkulm (AG), where the first Sunrise 5G pioneer switched on his Sunrise Internet Box 5G and can now use ‘fibre through the air’, which is ten times faster than fixed networks. 5G for People is closing the digital divide in Switzerland and making Switzerland Europe’s pioneer in digital infrastructures.”

The initial launch will focus on 150 cities, towns and villages across the country, with each location aiming for between 80% and 98% population coverage, the aim will be to provide an alternative to fixed broadband services, some of which will be considered sub-standards by the demanding consumer of today.

Interestingly enough, the claims themselves demonstrate the difference in attitude between advertising authorities in the UK and Switzerland.

Using a statement such as ‘fibre through the air’ and comparing the 5G service to copper fixed networks not fibre, might irk some advertising authorities. Although it is not a direct lie, it is not telling the entire truth of the situation. Some might suggest this is misleading the customer through omission of information. We suspect the Advertising Standards Authority (ASA) in the UK would have an issue with some of these claims.

Sunrise is on the charge through the Swiss alps, with its latest acquisition of Liberty Global’s assets adding momentum. First to market does not necessarily mean much in the long-run, but it is good ammunition to add to the armoury.