GSA forms working group for Fixed Wireless Access

The Global mobile Suppliers Association (GSA) has announced the launch of a working group to standardise the quickly developing fixed wireless access (FWA) segment.

While there are pockets of enthusiasm for FWA solutions growing throughout the world, success to date has been muted. Perhaps the introduction of a formal working group will add credibility and validity to the technology.

“As technology has improved, operators have been turning to mobile networks to deliver home and office broadband services, in some cases offering mobile-based services as an alternative to fixed-line broadband technologies,” said Joe Barrett, President of the GSA.

“The home/office broadband services on offer are no longer limited to mobile data subscriptions associated with mobile phones, dongles, or even MiFi devices. They now include use of mobile technology to provide the main broadband connection for a home or business in the form of a fixed wireless access services.

“In a relatively short space of time, fixed wireless broadband access has become a mainstream service offer and the formation of this new GSA Working Group is testament to the acceleration in industry activity in Fixed Wireless Access.”

Originally positioned as an alternative to traditional broadband networks and services, the sustainability of this technology has been widely questioned. There are of course niche usecases which will ensure it has a permanent fixture in the connectivity landscape, but a mainstream challenge to the status quo is almost impossible in the developed markets.

For the developed markets, usecases for rural communities, where the deployment of traditional broadband infrastructure is cost prohibitive, are attractive, as are products for customers who might not consider their current dwelling permanent in the long-run, students for example. In less developed markets, there is a very interesting usecase for FWA.

Last week, Vodacom announced the launch of 5G services in South Africa. This might be considered a mobile push by some, but when you come a partnership with Huawei with low penetration of traditional broadband infrastructure, it looks slight a play towards FWA.

As Omdia’s Dario Talmesio points out, 5G FWA offers high-capacity services which are quick to deploy, cutting out the need to dig up roads or deal with the bureaucratic nightmare which planning permission can be. The broadband market in South Africa is there to be disrupted with new technology, and Vodacom has got a running head start on its rivals.

South Africa is one market where this is relevant, but there are numerous others. Regions where ARPU is lower making ROI more difficult or bureaucracy is high making progress difficult. India is another market which comes to mind, as does Indonesia.

The GSA has currently identified 395 operators in 164 countries selling FWA services based on 4G, while an additional 30 have 5G FWA services. This is a technology which has potential to take-off in certain usecases, though this is not going to dislodge traditional broadband networks.

Vodacom launches 5G in South Africa as broadband market looks vulnerable

With some lockdown protocols still in place and low broadband penetration, launching 5G with a fixed wireless access (FWA) spin is telecoms opportunism at its finest.

Having recently assigned temporary spectrum by regulator ICASA, Vodacom is making use of 50 MHz in the 3.5 GHz band to launch 5G services in Johannesburg and Cape Town. Mobile subscriptions will of course be on the radar of the company, but with the Huawei 5G CPE PRO FWA router also available to purchase, there is an opportunity to disrupt the traditional broadband market.

“Vodacom’s 5G launch in South Africa comes at an important time as it will help us improve our network efficiency during the COVID-19 national state of disaster,” said Shameel Joosub, Vodacom Group CEO.

“During this difficult and unprecedented period, we are proud to offer world class network technology to South Africa, and all of its associated benefits, as we provide an essential service to keep the country connected. This is largely due to the allocation of temporary spectrum by ICASA which has already mitigated the network congestion we have experienced since the start of the lockdown period.”

Over the course of the coronavirus pandemic, mobile traffic on the Vodacom network has increased by 40%, while it has surged 250% on fixed networks. This presents a risk due to network strain and congestion, but an opportunity to launch an alternative to traditional broadband products while demand is at its highest.

South African broadband market (2019-end)
Internet service provider Subscriptions
Liquid Telecom 169,927
MTN South Africa 279,531
MWeb 119,400
Others 462,918
Rain 68,750
Telkom South Africa 2,165,000
Vodacom 235,337
Vumatel 15,042

Source: Omdia World Information Series

“We have talked to CSPs in emerging and also mature markets,” said Dario Talmesio, Practice Leader for mobile at Omdia. “FWA sales have doubled even in highly penetrated fixed broadband markets.”

With traditional broadband penetration down at 28.38% during the first quarter of 2020, Talmesio pointed out a significant opportunity for the right FWA proposition in South Africa. Its fast to deploy, affordable devices are emerging, and the demand is currently present under current circumstances.

With FWA, you don’t have to dig up roads, lay cables, seek planning permission from local authorities or cause major disruption to communities with construction. It is fast, simple and cheaper. And with the low broadband penetration, Talmesio suggests there is a very interesting opportunity.

The question of longevity and sustainability of FWA products in more mature markets have of course come under question, but in rural environments and nations where the economics do not drive ROI for traditional broadband deployment, FWA is a viable alternative.

Vodacom might be the first to launch services on the temporary spectrum licences, but there is certainly more potential considering what ICASA handed out to telcos in April. Some will of course be allocated to improve resilience of existing services, but the stage has been set for a FWA disruption in South Africa.

Allocation of temporary spectrum licences in South Africa
Service provider Spectrum band Block
Telkom 700/800 MHz 40 MHz
2300 MHz 40 MHz
2600 MHz 20 MHz
3500 MHz 12 MHz
MTN 700/800 MHz 40 MHz
2300 MHz 50 MHz
3500 MHz 50 MHz
Vodacom 700/800 MHz 40 MHz
2300 MHz 20 MHz
2600 MHz 50 MHz
3500 MHz 50 MHz
Liquid Telecoms 3500 MHz 4 MHz
Rain 2600 MHz 30 MHz

All Modes Lead to Home: The New Broadband Access Boom

Mobile broadband in the form of 4G and now 5G may have been grabbing the headlines for the past few years, but in the background the fixed line broadband market has been growing steadily, driven by both regulatory imperatives and operator expansion ambitions on the supply side, and the increasing use of bandwidth-hungry applications on the demand side.

Here we are sharing the opening section of this Telecoms.com Intelligence special briefing to look at the status of the broadband market and explores how stakeholders can best capture the opportunities and overcome the challeges.

The full version of the report is available for free to download here

Introduction: The Many Flavours of Broadband

Although demand for ever higher-capacity broadband connections are often associated with entertainment services, for example high-definition video streaming or connected gaming, much of the demand for fixed line broadband connectivity is linked to the pervasiveness of digital lifestyles, as growing numbers of people require reliable Internet connectivity to support an ever broader range of applications — remote working, financial services, medical care services, e-commerce and more – and an increasing number of devices.

Ovum, the research firm, reported that by Q1 2018, 1 billion consumers worldwide had been connected to broadband access networks. The firm forecast that the total number of broadband subscribers would top 1.1 billion by the end of this year. More than 20 million broadband subscribers per quarter have been added during the past two years.

Broadband access is an encompassing concept. Competing technologies have flourished during the past two decades. Some ride on the legacy copper PSTN networks – the various iterations of DSL technology and, most recently, Gfast – while others deliver fast Internet connections via cable networks, especially in North America. Satellite connections have also played a (limited) role.

In recent years, fibre connections running all the way to homes or buildings – collectively, fibre-to-thepremises
(FTTP) — has evolved from a niche, high-end solution to becoming a mass market proposition, though this varies wildly from country to country. This medium promises the fastest broadband access speeds to support the most demanding of applications and, as will be evident at the Broadband World Forum in Amsterdam (October 15-17), it is
still witnessing ongoing technological innovation as various flavours of passive optical networking (PON) technologies, such as XGS-PON and NG-PON2, come to market.

Meanwhile, thanks to the ascendency of 4G cellular technologies — primarily LTE, but also WiMax – and the arrival of 5G, fixed-wireless access (FWA) is also gaining increasing, albeit still limited, traction. This option is usually associated with rural and/or underserved areas but is now becoming a viable option in urban areas where the deployment of fibre is challenging or deemed uneconomic.

In addition to the differences between technologies, what qualifies as ‘broadband’ has also been evolving. In 2010, when Finland became the first country to set out the national policy to define access to broadband Internet as a basic right, the threshold was set at 1 Mbps downlink.

The FCC has been using 25 Mbps/3 Mbps (downlink/uplink) as the benchmark to evaluate how well fixed broadband has been deployed. By way of contrast, the US regulator has adopted 5 Mbps/1 Mbps as the benchmark for mobile (LTE) data service coverage.

At the beginning of September 2019, the Norwegian government started the consultation process to make broadband access a statuary obligation by the operators, becoming the latest country to elevate or aim to elevate broadband access to the status of a legal right. Here the government proposed two sets of metrics on which to gather comments: 20 Mbps/2Mbps and 10 Mbps/2 Mbps.

In its policy paper, titled ‘Connectivity for a Competitive Digital Single Market – Towards a European Gigabit Society’, published in 2016, the European Union’s vision included Internet access downlink speeds for all European households of at least 100 Mbps.

Sweden is the most aggressive country when setting its broadband targets. The country’s ‘Broadband Strategy’, published in 2016, defined a ‘completely connected Sweden by 2025’ in three tiers: 98% of all households and businesses should have access to a downlink speed of at least 1 Gbps; 1.9% should have access to 100 Mbps; and the remaining 0.1% should have access to at least 30 Mbps.

For any deployment of broadband connectivity to succeed, a number of factors need to be in place: There must be market demand that can be met by broadband connectivity; the technologies being used should be tried, tested and future-proof; the broadband service providers must be able to achieve a positive return on investment; and there should be a favourable regulatory environment.

Given the current market conditions impacting the suitability of the different technologies (see the next section), projected potential service uptake, and the drivers on the supply and demand sides, this report will focus on developments related to two key technologies: FTTP and 5G-based FWA.

The rest of this briefing includes sections on:

  • The Winners and the Others
  • It’s the Economics: When Fibre Makes More Sense than 5G, and Vice Versa
  • How the Public and Private Sectors Can Help
  • An interview with Nick Green, 5G Business Lead and Marketing Director, Three UK

To access the full briefing please click here

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.