Private networks: something of a big deal

Telecoms.com periodically invites other scribes to share their views on the industry’s most pressing issues. In this piece Ray Le Maistre, Editor-in-Chief at Light Reading, notes that with mobile operators and vendors scrambling for new business opportunities, the burgeoning wireless private networks sector could be a mini honey pot.

One of the biggest, and hardest to answer, questions asked every day at telecoms operators and vendors concerns new business opportunities – the identity of new revenue streams.

That question has been highlighted even more in the past few years as operators, in particular, seek to justify their 5G investments and develop a return on investment (ROI) plan that combines lower opex with additional revenues.

There won’t be a single answer to that question, of course: It will be a mixed bag of savings (hopefully!) and sales opportunities.

One of the more immediate revenue stream opportunities right now is wireless private networks, and the good news is that this opportunity doesn’t require 5G. Instead, the potential looks set to be enhanced by the availability of a full set of 5G standards (including the yet-to-be concluded core network specs) and the maturity of associated technology.

In the meantime, 4G/LTE has already been the cellular foundation for an increasingly thriving wireless private networks sector that, according to ABI Research, will be worth $16.3 billion by 2025 (see https://www.abiresearch.com/press/private-lte-will-be-us163-billion-opportunity-2025-and-foundation-5g-services-end-vertical-markets/).

Another market sizing prediction, this time by SNS Telecom & IT, pitches annual spending on private 4G and 5G networks at $4.7 billion by the end of 2020 and almost $8 billion by 2023.   

However this plays out, there’s clear anticipation of growing investment. What’s particularly interesting, though, is which organizations might pocket that investment. That’s because enterprises and/or organizations looking to benefit from having a private wireless network have a number of options once they decide to move ahead with a private network – here are three permutations that look most likely to me:

  1. Build and run it themselves – technology vendors get some sales in this instance
  2. Outsource the network planning, construction and possibly even the day-to-day. management of the network to a systems integrator (SI) – the SI and some vendors get the spoils. It’s possible here, of course, that the SI could be a technology vendor.
  3. Outsource to a mobile network operator – the operator and some vendors will get some greenbacks.

For sure there will be other permutations, but it shows how many different parts of the ecosystem have some skin in the game, which is what makes this sector so interesting.

What’s also interesting, of course, is what the enterprises do with their private networks: Does it enhance operations? Help reduce costs? Create new business opportunities? All of the above?

Let’s not forget the role of the regulators in all of this. In the US the private wireless sector has been given a shot in the arm by the availability of CBRS (Citizens Broadband Radio Service) shared spectrum in the currently unlicensed 3.5 GHz band: This has given rise to numerous trials and deployments in locations such as sports stadiums, Times Square and even prisons.

In Germany, the regulator has set aside 100MHz of 5G spectrum for private, industrial networks has caused a storm and even led to accusations from the mobile operators that the move ramped up the cost of licenses in the spectrum auction held earlier this year. (See Telcos complain about auction as German regulator bags €6.5bn https://telecoms.com/497897/telcos-complain-about-auction-as-german-regulator-bags-e6-5bn/)

In the UK, Ofcom is making spectrum available in four bands:

  • the 1800 MHz and 2300 MHz shared spectrum bands, which are currently used for mobile services;
  • the 3.8-4.2 GHz band, which supports 5G services, and
  • the 26 GHz band, which has also been identified as one of the main bands for 5G in the future.

The process to enable companies and organizations (Ofcom has identified manufacturers, business parks, holiday/theme parks and farms as potential users) in the UK to apply for spectrum will go live before the end of this year, with Ofcom believing that thousands of private networks could be up and running in the coming years.

Network infrastructure giant Nokia believes more than a dozen countries are planning to allocate spectrum specifically for private wireless networks, and that will suit the Finnish vendor just fine as it’s building a sizeable business by focussing on the specific needs of such buildouts.

It recently boasted that it already supports more than 120 private wireless networks around the world, with its customers including 24 in transportation, 35 in the energy sector, 32 in public sector and smart cities, and 11 in manufacturing and logistics. The company believes that, potentially, the number of private network base stations could dwarf the 7 million deployed by the world’s commercial mobile network operators, possibly by as much as twofold.

Nokia isn’t alone in spying this business opportunity, of course, although it has clearly built itself a solid foundation on which to build: Sweden’s Ericsson, as you’d expect, is also hot for such business, while specialists such as Redline and Federated Wireless are also chasing business.

So where is this market heading? And what are the drivers for further private network rollout? That’s something I’ll be checking into at the Private Networks in a 5G World (https://tmt.knect365.com/private-networks/) event in London (November 26-27), where the likes of Shell, Heathrow Airport, the Antwerp Port Authority and multiple major mobile network operators and technology developers will be sharing their stories.

Ericsson gets some 5G work from MTN South Africa

Swedish kit vendor Ericsson is helping out MTN South Africa with its 5G RAN, transport and core.

MTN expects to start rolling out its commercial 5G network sometime next year and has revealed that Ericsson will be one of the vendors heavily involved in the process. There’s no talk of exclusivity, however, so we can assume at least one other is mucking in, while complicating the picture further is MTN’s recent warm words about the OpenRAN project.

“South Africa is undergoing a huge digital transformation, which will open up new business opportunities and boost the nation’s economy,” said Giovanni Chiarelli, CTIO of MTN South Africa. “To enable and speed up this process, MTN, with Ericsson as our partner, is rapidly upgrading our network to deliver the quality, capacity, and overall network performance that our enterprise and customers demand. Launching 5G will accomplish this transformation and, with fixed wireless access, will ensure high quality, increased capacity, and greater reliability for our customers.”

“With this deal MTN South Africa will be one of the true 5G pioneers in Africa,” said Nicolas Blixell, VP of Ericsson Middle East and Africa. “We will work closely with them, just as we have done with other generations of technology, to bring the benefits of 5G to them and their customers. Citizens, enterprises, industry and society in general in South Africa are set to benefit enormously from 5G and we are here to help MTN South Africa make that happen.”

Ericsson now claims 76 commercial 5G agreements or contracts with unique operators, of which 30 are publicly announced and 23 are live. Here’s Ericsson’s latest 5G deal win map which, for some reason, doesn’t feature this one. Bit of an internal communications breakdown there it seems.

Pan-African initiatives are only way to solve its connectivity conundrum

Connecting the unconnected is an ongoing challenge for anyone in the African telecoms industry, but where do you find the $435 billion to plug the holes?

It might sound like an extraordinary number, but when you consider the size of Africa, 30,37 million km², and the population, 1,216 billion, it starts to look a bit more reasonable. This is a challenge which has been discussed extensively over the last few years, though a viable solution has not been tabled.

This is not to say there is no progress. This week, Liquid Telecom announced it had completed the construction of a new high-capacity fibre link running 2,600-kilometre (km) across the Democratic Republic of Congo (DRC), while Orange is about to begin work on an international backbone network in West Africa, connecting eight countries. These are promising steps forward, but the monumental scale of the challenge suggests such projects are little more than a drop in the ocean.

With such a significant mountain to climb, new ideas and new approaches need to be considered. Speaking at AfricaCom, Carole Wamuyu Wainaina of Africa50 has called for greater harmonisation between the 54 nations across the continent.

One of the challenges with developing a communications infrastructure to take Africa into the digital era is the moving parts. 54 sovereign states, most of which are not the wealthiest, are moving forward with independent connectivity plans. There is nothing wrong with this, but a common strategy would be significantly more efficient, both in terms of time and money.

This is not necessarily a new idea, Europe relies on the power of many after all, and there are initiatives in place in Africa. Wainaina pointed to some small-scale joint-initiatives to deploy electricity infrastructure as an example, but these are limited in their nature. For success to accelerated, a genuine pan-African approach should be considered. Pooling resources, talent and ideas could realise significant efficiencies.

The last few years have seen an attempt to create some cohesion between the nations, meetings between the ICT Ministers are not uncommon, but this seems to be all they are at the moment; meetings. At some point, the talking will have to stop, and action will have to be taken. Few government officials like to do anything new or innovative, though big challenges require big actions.

The creation of a pan-African deployment plan might be the only way to deploy connectivity infrastructure which spans the width and breadth of the continent, but rhetoric will have to turn into action sooner or later. Politicians like to talk, promise and posture, but that achieves nothing.

Vodafone drops OpenRAN bombshell

At the TIP Summit in Amsterdam Vodafone announced it was thinking of shifting all of its European mobile sites to OpenRAN technology

The thinking has got so far that is set to issue a 5G tender, which would involve up to 100,000 sites, for the work, according to Light Reading. The announcement was made live on stage by Yago Tenorio, Vodafone’s head of network strategy, on the opening morning of the latest TIP (Telecoms Infra Project) Summit.

“It is a really significant opportunity for OpenRAN to scale,” said Tenorio. “We are willing to swap out sites if we have to. The ambition is to have modern, up-to-date, lower-cost kit in every site. We are not announcing the results today because this just kicked off but stay tuned because it may be a significant acceleration of the open RAN ecosystem.”

The main point of OpenRAN is to loosen the stranglehold the big kit vendors have over the RAN market with their proprietary technology by commoditising it. Vodafone’s move coincides with the commencement of its European 5G roll-out and at a time when it remains unclear which vendors will be allowed to participate in which countries.

It looks like TIP itself is quite heavily involved in pushing OpenRAN, having issued a request for information to the equipment industry on how to build a 5G network based on it, that will run on other commoditized tech such as x86 servers and use open interfaces. Apparently none of the big three kit vendors responded to the request, but plenty of other companies did, with Samsung especially putting itself in a strong position, so it looks like this could really shake things up.

MTN adds credibility to the OpenRAN movement

MTN has announced it will be partnering with Parallel Wireless to deploy 5,000 OpenRAN sites across its network.

The Parallel Wireless OpenRAN solution will allow MTN to deliver 2G, 3G and 4G connectivity simultaneously, targeting areas which are currently unconnected.

“OpenRAN is certainly not new to MTN. Our Group Technology teams concluded field trials in Zambia in 2018, deploying commercial sites from the start of 2019,” said Dirk Karl, Chief Procurement Officer at MTN.

“Our team has steadily been focused on creating viable RAN solutions alongside the traditional deployments of network technology suppliers in order to accelerate the rural expansion in our markets.”

Although OpenRAN has certainly attracted some attention, it is yet to make a significant splash in the telco pond. Emerging from the Telecom Infra Project (TIP), OpenRAN is an initiative to define and build 2G, 3G and 4G RAN solutions based on a general-purpose vendor-neutral hardware and software-defined technology.

Speaking to Telecoms.com on the side-lines of AfricaCom, Christoph Fitih of Parallel Wireless highlighted that the deal provides some much-needed credibility to the OpenRAN movement.

This is the challenge when it comes to OpenRAN. Many telcos understand the value the technology can offer, though telcos are traditional organisations. Most are incredibly risk-adverse, especially the smaller telcos, arguably the ones who will gain the most from OpenRAN. New ideas scare the telco industry.

From Fitih’s perspective, MTN’s confidence in OpenRAN validates the technology. Incorporating OpenRAN into its network should spark an interest in the minds of competitors, offering the movement confidence.

Whether this proves to be the spark which ignites the OpenRAN fire remains to be seen, though a stamp of approval from one of Africa’s most prominent and influential telcos certainly provides some weighty credibility.

KT boasts of 1mn 5G subs and European roaming deals

KT has announced its 5G subscriber base has gone past the one million mark and it has entered into 5G roaming agreements with operators in Italy, Switzerland, and Finland.

KT, South Korea’s second largest operator, announced that it has won one million 5G subscribers five months after the service was launched, and one month after its competitor, SK Telecom, the country’s biggest operator, hit the milestone.

Meanwhile, KT has also reached 5G roaming agreements with TIM in Italy, Sunrise in Switzerland, and Elisa in Finland. This means that KT’s 5G subscribers will be able to use the 5G networks provided by those three operators in the three European countries.

KT has standing agreements with operators in 185 countries for 3G and LTE roaming. The operator aims to extend those agreements to 5G when 5G services go live in those countries. Prior to the agreements with the three European countries, KT had already set up a similar agreement with China Mobile, despite the fact it hasn’t launched services yet.

According to KT’s price proposals at the time of 5G launch, customers on the starting package (paying KRW 55,000, or $46 per month) will have 8 GB roaming data while overseas, with the speed capped at 1 Mbps. Those on higher tiers (paying KRW 80,000 ($67) or KRW 100,000 ($84) per month) will have unlimited roaming data, but the speed will be capped at 100 Kbps. Customers on the premium tier of the 5G service (KRW 130,000, or $109, per month) will have the speed limited lifted to 3 Mbps.

KT is not the first South Korean operator to tie 5G roaming partnerships. SK Telecom 5G subscribers will be able to connect to Swisscom while travelling in Switzerland, while those on LG U+ will be able to connect to China Unicom’s 5G when travelling to its neighbouring country, after the latter’s 5G service goes live.

The only catch for KT 5G users intending to visit Europe is that the roaming can only be done on Samsung Galaxy S10 5G, the vendor’s first 5G smartphone, though KT said the service will be extended to other devices soon. Earlier this month, at IFA in Berlin, Samsung announced that it had already sold 2 million 5G smartphones and expected to double the volume to 4 million by the end of the year.

Huawei pledges $1.5 billion to its new developer program

Huawei has announced that it will invest $1.5 billion in the next five years to boost its developer ecosystem for the Kunpeng and Ascend computing platforms.

SDKs were also released at the same event when its Developer Program 2.0 was unveiled.The announcement was made at the 2019 version of the Chinese vendor’s annual Huawei Connect event in Shanghai. According to Patrick Zhang, CTO of Cloud & AI Products & Services at Huawei, the new program will cover five key areas:

  • Building an open computing industry ecosystem based on Kunpeng + Ascend computing processors
  • Establishing an all-round enablement system
  • Promoting the development of industry standards, specifications, demonstration sites, and technical certification system
  • Building industry-specific application ecosystems and region-specific industry ecosystems
  • Sharing Kunpeng and Ascend computing power, making it available to every developer

The focus areas are related to cloud computing and artificial intelligence. The applications and services the ecosystem aims to support are for server level, either in the centralized cloud or on the edge. To enable the ecosystem development, Huawei also published Kunpeng Developer Kit and ModelArts 2.0 AI development platform.

Despite that x86 architecture is still dominating the server market, ARM has worked to break the monopoly, and Huawei is one of ARM’s leading licensees. Earlier this year Huawei released Kunpeng 920, its CPU based on ARMv8 design. Huawei aims to expand its share in the server market with Kunpeng’s superior computing power claimed by Huawei, most likely starting from the market in China.

But Huawei’s ambitions go way beyond moving more boxes. Its cloud service has been promoted for its strong AI capability, supported by the Ascend AI chips. The Ascend 910, the latest version, was released in August, which the company claimed is the world’s most powerful AI processor.

By enriching its ecosystems, Huawei hopes it will be able to deliver a full suite of solutions, including supporting digital transformation undertake by increasing numbers of telecom operators.

This is the second iteration of Huawei’s Developer Program. The Developer Program 1.0 was launched in 2015.

China Telecom and China Unicom jointly build and share 5G RAN

China Telecom and China Unicom, two of China’s three leading telecom operators, and two of its four 5G licensees, will jointly cover parts of the country with one shared 5G radio access network.

The two companies, both listed on the Hong Kong Stock Exchange, signed the “Framework Agreement on Co-building and Co-sharing 5G Networks” on Monday. According to the Agreement, the two operators, by sharing the radio spectrums to their names, will “build together” and “share together” one 5G radio access network in 15 major cities, including Beijing, Shanghai, Shenzhen, Guangzhou, etc. The 5G core networks will be built separately.

The Agreement also laid out the plan on how to divide the work between the two in the cities they will share the network. Territories each will cover is divided roughly based on the number of 4G base stations. For example, in Beijing, China Telecom will build 40% of the 5G base stations, while in Shanghai it will build 60%. Each company will be responsible for investing in, maintaining, and operating the base stations it builds. The Agreement also commits “non-aggression” between the partners, for example, collaboration with third parties by one partner should not harm the interest of the other partner. Details of revenue settlement in the shared networks will be worked out later.

On top of that, the two companies will build their own separate 5G networks in other parts of the country. China Telecom’s own network will extend to 19 provinces, while China Unicom’s will cover 10.

The two operators, together with China Mobile, the world’s largest mobile operator by subscriber numbers, and China Broadcasting Network Corporation Ltd, were all awarded 5G licences in June, well ahead of what the industry had expected.

Mobileum grows assurance profile with WeDo acquisition

Mobileum has announced it will acquire risk and business management solutions provider WeDo Technologies, bringing together two of the bigger names in this niche segment.

Following the purchase of Evolved Intelligence in October 2018, Mobileum is seemingly on the move to dominant the market. The acquisition of WeDo adds additional weight to its analytics armoury, aiding telcos to detect and prevent fraud on their networks, as well as increasing the physical presence of the firm around the world.

“We are excited to partner with WeDo and support them in the next phase of their growth,” said Bobby Srinivasan, CEO of Mobileum. “As we continue to grow Mobileum, organically and inorganically, the addition of WeDo’s strong product engineering, customer footprint, consulting and services teams to our existing talented workforce around the world will allow us to expand the depth and breadth of our offerings.”

“The combined business offers our customers a richer and more diverse portfolio of solutions in the domains of Revenue Assurance, Fraud Management, Network Security, Roaming and Interconnect. As the mobile industry continues to evolve, this transaction will allow us to continue to invest in the future architecture, assuring the success of our customers along a journey of continuous transformation.”

The newly combined business will have 1,100 employees in 30 offices, serving 700 customers in 180 different countries. The existing WeDo platform and architecture will be maintained, though it will also be integrated with the Mobileum Active Intelligence platform.

Pinning down how big the revenue assurance and risk management software market actually is, however, is not the easiest of tasks.

The Communications Fraud Control Association suggests fraud costs the telecoms industry more than $38 billion a year, with roaming fraud accounting for $10.8 billion of that figure. Estimates from Credence Research suggests the global revenue assurance software market was worth $2.5 billion in 2017, with growth projected at 11% CAGR through to 2026. This sounds promising, however Heavy Reading Analyst James Crawshaw has some doubts.

If we are to assume WeDo is the leading player in the revenue assurance software market, it will have a notable market share. Looking at WeDo’s financials, the team increased orders to more than €60 million for 2018. The numbers aren’t quite adding up here.

Either this is an incredibly fragmented market with thousands of suppliers making up the $2.5 billion, WeDo is not a leading name in the revenue assurance software market or the market is worth considerably less than $2.5 billion.

It is not necessarily the end of the world if the addressable market is smaller than analysts are currently estimating, as long as there is growth potential. There is of course opportunity to grow, though as Crawshaw points out, WeDo’s orders have not really increased significantly over the last few years, suggesting this is somewhat of a stagnant market.

Pai gobbles up Sprint and T-Mobile US merger

After months of headaches and sleepless nights, the tides of favour seem to be turning for Sprint and T-Mobile US as the FCC chief gives his blessing for the union.

254 days into the 180 days the FCC gives itself to approve mergers, FCC Chairman Ajit Pai has officially confirmed his position. It is still not quite 100% guaranteed for the two telcos, however with Pai’s recommendation, the future is looking very rosier.

“After one of the most exhaustive merger reviews in Commission history, the evidence conclusively demonstrates that this transaction will bring fast 5G wireless service to many more Americans and help close the digital divide in rural areas,” Pai said in a statement.

“Moreover, with the conditions included in this draft Order, the merger will promote robust competition in mobile broadband, put critical mid-band spectrum to use, and bring new competition to the fixed broadband market.”

Suggesting this was a protracted and painful process might be one of the biggest understatements of the year. However, it might have been necessary considering the significant impact a merger of this scale could potential have on competition, diversification and network deployment across the US.

Above all else, the US is a monstrous market with an incredibly small number of nationwide telcos. This does of course offer economy of scale to improve investment capabilities, though there is a risk of regional monopolies due to the sheer size and geographical variance across the country. Proposed mergers which would take the number of national telcos from four to three has been extinguished in the past, though this one has passed almost every test.

The greenlight from the FCC Chairman is an important step, adding momentum to positive news from the Department of Justice in the last few weeks. At the end of July, the DoJ’s antitrust division gave the thumbs up, assuming Sprint’s prepaid brand Boost is divested, and Pai has made the same demands.

This is one concession which many expected, but we have major issue with. Dish will acquire the Boost brand, allowing it to make use of its horde of valuable spectrum, satisfying the demands, though will this be enough to maintain the current levels of competition, the objective of both the FCC and DoJ? We do not believe so.

Firstly, instead of having four established telcos in the US, consumers will now have to choose from three telcos and a newbie with zero experience of effectively running a mobile business and network. Dish does not have the competence, experience, infrastructure, processes, billing systems or supply chain to run a mobile business, and it will take years to build these elements to the degree expected.

Secondly, Dish is now an MVNO. It will be able to make use of the T-Mobile network, but the FCC and DoJ has replaced a functional MNO with an MVNO and expects no-one to notice the difference. Both of these agencies expect Dish to have its own network up-and-running in a few years, but this is another ridiculous ambition.

As mentioned in the first point, this is a company which is not practiced in the dark arts of mobile. The three remaining traditional players took decades to rollout their own networks, and they are still not genuine nationwide telcos (there are still network gaps across the country). How is Dish expected to create a nationwide, 4G and 5G, network across a country of 9.8 million km2, with an incredibly variety of different urban densities, geographical landscapes and economic societies.

If anyone thinks Dish is going to be a replacement which can maintain the current status quo, they are quite frankly fooling themselves.

What is worth noting is that this is not the end of the road for Sprint and T-Mobile. It might have secured the relevant regulatory approval, but now it will have to combat the various legal challenges.

Led by New York Attorney General Letitia James, a coalition of State Attorney Generals have filed a lawsuit to block the proposed merger. The lawyers are arguing the merger would harm competition, and it should be blocked to maintain the status quo. As it stands, with four separate MNOs challenging each other, prices and mobile experience is improving for the consumer; the lawyers are arguing that the situation is not broken, it is in fact improving, so why should the FCC and DoJ try to fix an imaginary problem?

Although the approval process from the DoJ and FCC might have been considered a significant problem, the telcos will not have to face legal heavyweights from more than a dozen States. Lawyers have a way of being very difficult when they want to be, so there might well be a few more twists and turns in this saga.