Collaboration will be key for telcos in an era of shared 5G networks

Telecoms.com periodically invites expert third parties to share their views on the industry’s most pressing issues. In this piece Virat Patel, Managing Director of Pioneer Consulting Asia explores network sharing in the 5G era.

A proposal was recently put forward in the US that its 5G networks should be built and maintained by the US government. In part, this recommendation was made with the view of mitigating espionage risk by Chinese network equipment providers. However, another reason for this recommendation was that the sheer cost of rolling out a nationwide 5G network may not be justifiable based on the potential returns any single operator will be able to generate.

For previous generations of network technology, including the most recent 4G networks, each provider has rolled out their own nationwide network. While there are instances of tower sharing and leasing as well as wholesale agreements, for the most part the operators own their network infrastructure.

The challenge is that for 5G to deliver on its promises of low latency (sub 10ms) and high bandwidth, the number of cells required per km represents a 10-fold increase on the current density. This results in much high capex requirements for telcos and is likely to reduce their willingness to deploy the infrastructure to less populated areas which unfairly penalizes residents in these parts with slower connectivity speeds.

If the government takes responsibility for rolling out the 5G network, this would reduce capex wastage by providing a single 5G network across the country instead of multiple operators deploying their own overlapping networks. Some fear that this will lead to an inefficient government market place that stifles competition, exactly the kind of utility telecom the US government broke up in 1984.

However, there are precedents that suggest government sponsorship of infrastructure can in fact lead to more competition. In efforts to provide high quality broadband with nationwide coverage, governments have already taken steps to launch government supported networks known as national broadband networks (NBNs). Singapore has one of the most successful implementations of an NBN in which the government drove the development of passive and active infrastructure through incentives and fostered a highly transparent and competitive retail market. This model has led to some of the lowest broadband prices in the world. Completing the public to private sector initiative, the entity that owned and wholesaled the passive infrastructure was IPO’d in 2017.

Can the 5G business case work without some form of network sharing?

While 5G standards are still being finalized, the business case for 5G is unlikely to stack up without the sharing of networks – both passive and active components. Even if government ultimately does not take on the task of building out 5G networks, there appears to be a strong business case for operators to go beyond tower sharing and consider sharing radio access and backhaul to minimize their individual capex. Should either of these scenarios materialize, Telcos will no longer compete on network availability or core connectivity services (since all will be identical) but rather on digital services and operational cost efficiencies.

In this scenario of shared 5G networks, how can telcos differentiate their services?

Telcos will need to leverage new technologies and tap into emerging consumer trends to offer services that deepen consumer engagement with their services in a cost-efficient manner.

Below we have outlined emerging technologies and trending services that telcos should consider offering to build differentiation in an era of shared infrastructure:

AI – AI will lead to both cost efficiencies by automating internal processes and delivering better customer experiences, both important areas for telcos to improve at. One area already gaining momentum is AI supported customer service channels. Through AI powered solutions’ that can better sort and respond to natural language queries, operators will be able to reduce issue resolution time thereby improving customer sentiment toward their brand while also saving costs

Digital ecosystem apps – Pioneered by Wechat and now appearing around the world, digital ecosystem apps offer customers a single app to manage their daily needs from voice and messaging communications to ordering transport, groceries and meals to making payments. With mobile carriers enabling subscribers’ mobile lives, a well-designed app with strong partners can leverage their subscriber base for easy access and drive deeper engagement

Video Content – The proliferation of OTT video apps is leading to a tyranny of choice for consumers and the inconvenience of needing and using too many apps to watch content. While telcos have so far struggled with their own standalone OTT video apps, they are well positioned to offer an aggregator platform that curates other apps onto one platform and facilitates single billing through direct carrier billing.

Indeed, these technologies/services are not mutually exclusive – Digital ecosystem apps may well include video services which in turn leverage AI.

We believe telcos should partner with digital service providers rather than use a “build it ourselves” approach, which they have tended to adopt in the past.

How will telcos achieve 5G success?

In summary, the key to telcos’ 5G success will lie in successful collaboration – with other telcos on infrastructure and with emerging digital players for innovative digital services.

 

Meet Virat Patel and other experts in the APAC telco space in the region’s only dedicated 5G event, 5G Asia 2018, taking place in Singapore this September.

Ericsson managed services contract with MBNL gets extended

MBNL, the network joint venture between UK MNOs EE and Three, has decided to keep Ericsson on as its managed services provider until 2020.

Managed services is a big part of Ericsson’s business, but has been its most problematic division of late thanks to a bunch of ill-advised historical contracts apparently entered into in a desperate drive for growth. Current CEO Börje Ekholm has prioritised profitability over growth and thus encouraged the abandonment of the worst of these, among which the MBNL deal clearly isn’t.

“This marks another significant milestone in our longstanding partnership with MBNL and our joint commitment to deliver superior network quality and performance to Three and EE consumers in the UK,” said Peter Laurin, Head of Managed Services at Ericsson. “We are delighted to continue our successful relationship and continue to evolve our managed services portfolio to deliver innovation and industry leading efficiencies through automation and analytics.”

“The agreement to extend the Design, Plan and Deploy services contract with Ericsson, for a further two years, reflects the strength of the collaborative relationship between Ericsson and MBNL,” said MBNL MD Pat Coxen. “This will continue the trend of collectively delivering great results and is a sign of true partnership. We look forward to continuing the great work with Ericsson in order to meet the demanding business objectives of MBNL and its shareholders.”

So far, so generic, but Ekholm and Laurin will be delighted by any positive news coming out of the managed services division. A major strategic decision has been to restrict its customers to those who already by Ericsson networking gear, which also seems to be a good way of restricting excessive deal-making zeal. You can hear more from Laurin about the strategy for his division in our Inside Ericsson piece.

Will the UK ever agree on the internet?

This week Telecoms.com has 16 year-old Shannon O’Connor joining the team for work experience, and today’s ‘thrilling’ task is to join Jamie at the Connected Britain event in London. Here are her thoughts. 

With the Connected Britain event bringing together executives from TalkTalk, CityFibre and Openreach, as well as government representatives, the question still remains as to whether they will be able to work collaboratively to progress?

As the speakers continue to roll out their plans for an accelerated investment in high capacity networking across the UK, there still seems to be a lot of busywork.

“If you could rollout out connectivity through reports and investigations, Britain would have faster broadband than Japan and Korea,” said Matthew Howett of Assembly, the chair at this year’s event.

But is there any action?

Minister for Digital and the Creative Industries, Margot James highlighted the inequality of connectivity not being reached within the rural areas of the UK. As major towns and cities continue to prosper and develop, those living in the outskirts face difficulties in sustaining accessible, basic broadband. Something which interested attendees intently as plans begin to emerge for infrastructure collaboration.

However, in the following panel it was clear that collaboration would not only create conflicting ideas between competitors but also allow those to question whether proper competition could ever come while working hand in hand.

Emerging from what the speakers said at the conference was quite simply uncertainty. There had been too much discussion and not enough action in developing fibre broadband within the public sector and beyond in the UK. There doesn’t seem to be any consistency or coherence; it seems asking adults to be mature and agree on a logical path is too much (and that’s coming from a teenager – Ed.).

As our Europe counterpart continues to prosper both economically and industrially, the UK continues to fall further behind because of an inability to agree.

A new consortium appears to lay another massive cable

A horde of big names has come together to build a high-capacity cable system that will connect Maruyama and Shima in Japan with Los Angeles in the USA and Daet in the Philippines.

So who is in the consortium; PCCW Global, Amazon, Facebook, NTT Communications, PLDT and SoftBank. Scheduled to be ready for service by early 2020, the Jupiter Cable will be approximately 14,000 km in length and has a design capacity of more than 60 Tbps.

“The demand for bandwidth in the Pacific region continues to grow at a remarkable rate, and is accompanied by the rise of capacity-dependent applications like live video, augmented and virtual reality, and 4k/8k video,” said Koji Ishii of SoftBank, co-chairperson of Jupiter consortium.

“Jupiter will provide the necessary diversity of connections and the highest capacity available to meet the needs of the evolving marketplace. TE SubCom has a proven record of success in the design and implementation of innovative, scalable and robust transoceanic cable systems, making the company the most reliable choice for the Jupiter supply partner.”

The cable itself has been configured as a trunk and branch system with submersible ROADM (reconfigurable optical add/drop multiplexer) using WSS (wavelength selective switch) for a gridless and flexible bandwidth configuration. The team claim the ROADM nodes in the design are the most advanced form of this technology to date, providing bandwidth reconfiguration flexibility in an undersea network.

Bandwidth demand over the trans-Pacific route has more than tripled in just four years, though this is only going to increase as new, bandwidth-intensive technologies including Virtual Reality (VR), social media applications, video streaming, and gaming content start to gain traction in the mass market.

“Consumers and enterprises continue to require significantly increasing amounts of bandwidth whether for their own applications, or for their interface with content providers, hosting companies and cloud services,” said Marc Halbfinger, CEO of PCCW Global. “The Jupiter network will play a crucial role in serving this increased demand across the key trans-Pacific artery.”

This is of course not the only cable which is being laid to deal with the rising demand of cat videos. Others include the Trident Subsea Cable, the Hawaiki cable and the FASTER cable. These are only three other examples, but the bottom of the ocean might start looking like the back of your PC before too long.

JUPITER Cable Map