América Móvil strengthens its position in Brazil with Nextel acquisition

The Latin American mobile heavyweight América Móvil has agreed to acquire its competitor Nextel in the Brazilian market for $905 million.

Shortly after the deal was announced by América Móvil on Monday, and the board of NII Holdings, which owns 70% of Nextel, announced that it would propose to the shareholders to accept the offer. The other 30% of Nextel is owned by AI Brazil Holdings, the local operation of Access Industries, an American private company whose portfolio includes natural resources, telecoms, internet services, as well as Warner Music, among other media interests.

The nature of the deal, “cash free / debt free”, will let NII and AI Brazil keep all the cash while América Móvil will not assume Nextel’s debts. Although the total transaction value is less than 1.5 times of Nextel’s annual revenues in 2018 ($621 million), it represents almost four times NII’s market capitalisation on its latest trading day on NASDAQ ($229 million), indicating the buyer’s relatively strong confidence in the business prospect.

Brazil is a highly competitive market. According to research by Ovum, by Q4 2018, Vivo (owned by Telefónica) led with one third of the total mobile market, while TIM and Claro (América Móvil’s existing operation in Brazil) were vying for the second place, each serving about a quarter of the total mobile subscribers. Nextel had slightly over 1% market share. The rest of the market is served by Oi (a JV between Altice Portugal, formerly Portugal Telecom, and Telemar, Brazil’s largest integrated telecom operator).

After the acquisition, América Móvil plans to combine Nextel with Claro to “consolidate its position as one of the leading telecommunication service providers in Brazil, strengthening itsmobile network capacity, spectrum portfolio, subscriber base, coverage and quality, particularly in the cities of São Paulo and Rio de Janeiro, the main markets in Brazil.”

For NII, selling Nextel in Brazil represents the end of an era. The company once operated mobile services in multiple North and Latin American markets, including the eponymous professional radio service in the US, which was later acquired by Sprint. Brazil is its last operation, where it has been struggling in a classic four-operator market. Not only has it not been able to break into the leader group, but also seen business declining fast. The revenues in 2018 were a 29% decline from 2017 ($871 million), which itself was a 12% decline from 2016 ($985 million).

“The announcement of this transaction marks the culmination of an extensive multi-year process to pursue a strategic path for Nextel Brazil and provides our best opportunity to monetize our remaining operating assets in light of the competitive landscape in Brazil and long-term need to raise significant capital to fund business operations, debt service and capital expenditures necessary to remain competitive in the future,” said Dan Freiman, NII’s CFO. Earlier potential buyers included Telefónica Brasil, Access Industries (NII’s JV partner), though the most concrete case was TIM, which, according to Reuters, approved a non-binding offer in November last year. None of these negotiations has come to fruition.

“Management and our Board of Directors believe the transaction is in the best interest of NII’s stockholders,” Freiman added.

UK and Germany are a bit rubbish at mobile – Opensignal

A new study from mobile analytics company Opensignal notes the UK and Germany are falling behind in terms of mobile performance.

It took a look at the two operator groups that have networks in both countries and found they all deliver relatively low mobile broadband speeds in those two countries. As you can see in the charts below, Telefónica does a fair bit worse in the UK and Germany than in Spain, but maybe that’s to be expected since it’s a Spanish company. However the trend continues with Vodafone, for which the UK and Germany are two of its worst performers.

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“So what’s the reason for these relatively poor mobile broadband speeds in Germany and the U.K.?” said Opensignal Analyst Peter Boyland. “It certainly isn’t market maturity or competition, as both countries have had mobile networks for decades and levels of competition, numbers of operators, etc. are comparable with their neighbours.

“Topographically, both countries have challenges in terms of size and population density, but no more than, say, Italy or Spain. It would be easy to blame poor performance on underinvestment in network infrastructure, but the reality is a combination of many factors including regulation, availability of spectrum, and mergers and acquisitions among network operators.

“The fact remains that Germany and the U.K. are punching well under their weight in terms of mobile network speeds. Both countries are on the verge of 5G launches, but it is likely to be some years before the benefits of these new networks are felt by most mobile users. And there is growing discontent among the business community in Germany, with claims that poor broadband speeds are hindering economic growth. Germany and the U.K. may not be able to wait for the 5G opportunity, as their operators urgently need to make improvements in their mobile network experience today.”

Something’s certainly going on when two major operator groups can only manage around half the performance in the UK and Germany as they can in their leading markets. As Boyland said this situation will be the product of a number of factors, but our gut-feel is that regulation and spectrum availability are probably the most significant of them.

Telefónica and Microsoft team-up to own connected ecosystem

Every telco is attempting to figure out how to survive in the newly-defined digital world and Telefónica’s approach looks to be one of the most interesting attempts yet.

Speaking at Mobile World Congress in Barcelona, Telefónica CEO Jose Maria Alvarez-Pallete was joined on stage by Microsoft CEO Satya Nadella to preach the promise of its ‘fourth platform’ and the power of digital assistant ‘Aura’ as a play to capture the fortunes of tomorrow’s digital ecosystem. Many are attempting to realise the glories of the connected economy, but this approach, leaning on the ‘gated community’ lessons of the OTTs looks to be one of the most encouraging yet.

“We decided cognitive intelligence was an amazing new opportunity,” said Alvarez-Pallete. “It is a new wave of interaction with our customers.”

The idea, which has been in the making for the last two years, is a relatively simple one on the surface. Build an effective digital assistant (tick), an intuitive interface (tick), a network designed for intelligence (tick) and open all this up to third parties (the next tick). It is remarkably similar to the ‘gated community’ model which has been championed by the likes of Facebook.

Although there are services and products which will be designed by Telefónica, there are more intelligent ways to monetize the consumer. The digital assistant and ‘Movistar Living App’ help Telefónica own the relationship with the consumer, but by opening the gates of this cultivated community Telefónica can monetize the relationships and (in-directly) the services which are build on top of its own intelligent network.

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However, for this idea to work the services have to be captivating and innovative. Telefonica must give customers a reason to use ‘Aura’ and the ‘Movistar Living App’ as the focal point of their own connected world. Effectively, Telefonica will have to go head-to-head with the likes of AWS and Google who are also trying to own this relationship with their own digital assistants. This is where Microsoft will be able to help.

Under Nadella, Microsoft has been reborn as a new company. After a brief fall from grace, the now cloud-defined business is fast becoming one of the most innovative players in the market, and part of this is built on its own AI platform and cognitive intelligence offerings. If Telefonica is going to go toe-to-toe with some very innovative players and own the connected ecosystem, the power of Azure (machine learning research, speech recognition etc.) will be critical to this success.

Another crucially important factor to success here will be earning, and maintaining, customer trust. Facebook succeeded so forcefully in the first few years because no-one questioned the data-sharing business model. Perhaps this was because no-one could understand these concepts, but the world has changed. Privacy is a priority for consumers, and Telefonica will have to prove it is serious about keeping personal information safe and managing the relationships with third-parties responsibly. Without this trust, Telefonica’s drive towards evolution with fail and the business will be nothing more than a dumb pipe.

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What is worth noting is that the strategy is off to the best possible start. Aura has been launched in six different countries, across 30 channels and has developed more than 1000 different usecases. By the end of 2019, these numbers will have improved to 9, 50 and 1500 respectively. The ambition and the growth potential is certainly there.

Owning the ecosystem which is fast developing behind the connected economy, including the smart home, is an opportunity which looked to be lost for the telcos. With the likes of AWS and Google seemingly wrestling control away with their own smart speakers and integrated personal assistants, it might have been a case of another missed opportunity due to inaction. Telefonica is looking to right this wrong however.

O2 confirms 2019 5G launch

Telefonica’s UK business O2 has confirmed it will launch 5G in 2019, though there will be much more of a business twist to the new connected euphoria.

Mixed in with the management team reporting financial results for the last twelve months, the team announced the network upgrade, which will be fuelled by a £1 billion CAPEX investment over 2019. What is worth noting is the O2 management is pitching 5G with more of a business facade than competitors are offering.

Although specific dates have not been revealed, the network will first launch in Belfast, Cardiff, Edinburgh and London, while the rollout will continue throughout the rest of the UK through 2020, as compatible smartphones become more readily available.

“Mobile is one of the most powerful opportunities for growth in the economy and 5G is just the next step,” said COO Derek McManus. “We’re building a 5G economy is coalition with British business.”

What is not entirely clear is how much of this £1 billion investment will be directed towards 5G and what will be left over for the 4G network. O2 has been investing healthily in its network over the last couple of months, CAPEX investments in 2018 accounted for 12.9% of total revenues, and CEO Mark Evans expects this to continue.

According to Evans, 5G will not be forced on consumers once launched, but there will naturally be early adopters queuing up. Selling 5G to the consumer is going to be a tricky task for many telcos, 4G is arguably fast enough for all available applications and services, and to ensure O2 is generating ROI, the enterprise world is going to be a focus for the team.

This is not necessarily out of character for the telco either. Over the last couple of months, O2 has been targeting enterprise for growth, perhaps realising fortunes are not going to be realised in the consumer segment. As the market leader, O2 now has 32.6 million connections on its network (including MVNOs) and the expense of artificially attempting to force future growth might exceed the benefit. Growing in the enterprise market, while maintaining a leadership position in the consumer world, is certainly a sensible strategy.

“The company is taking a cautious wait and see approach to 5G,” said independent analyst Paolo Pescatore. “However, it can’t afford to be left behind. It is apparent that initial consumer appetite for 5G will be limited. A greater focus on enterprises is a sensible approach.”

Over the last couple of months, O2 has been running its FTSE 100 5G testbed to identify the usecases which mean the most to British business. Although McManus was not forthcoming on specific partners and customers, he did suggest there was strong progress being made in the agriculture, retail, transport and industrial segments. O2 will certainly not turn away any consumers who want to upgrade to 5G, but there does seem to be much more of a business twist to the super-charged network plans than we’re seeing at other UK telcos.

That said, while there is certainly a stronger focus on business, fixed wireless access seemingly has not been ruled out as a 5G usecase, potentially opening the door for a convergence offering. Evans pointed out that there would certainly be customers who would use the 5G connectivity for FWA but stopped short of completely ruling out this type of service from O2.

According to both Evans and McManus, FWA can make sense in some circumstances, take rural locations as an example, but long-term there are better options. With the country being fibred up, FWA as 5G validation is weak.

Moving over to the financial results, there are certainly some healthy numbers here. Total revenues for the last twelve months went just past £6 billion, a 5.4% year-on-year increase, while operating income was £1.6 billion, a 11.8% boost in comparison to 2017. O2’s subscription base grew to 25 million, with the total of 32.6 million including MVNOs such as Tesco Mobile, Sky Mobile and Lycamobile, as well as its own sub-brand Giffgaff.

CFO Patricia Cobian pointed towards increased data consumption and the introduction of three new offers as fuel for the positive results. In Q1, O2 updated its roaming plans to include the US and Australia (amongst other countries), while in Q2 the team launched a family plan and in Q3 Custom Plan debuted, allowing customers to decide how they pay for subsidized devices. With net additions standing at 282,000 across 2018 and churn below 1%, the offers certainly seem to be having a positive impact.

The Priority initiative has once again proved successful for the business. Some might feel this is a card which is underplayed by the O2 team, but customers certainly enjoy it. Over 8 million Priority offers accepted across the year, 42 million entries made to prize draws and £26.7 million saved in offers and freebies.

In terms of value adds, O2 is doing a great job in rewarding customers but limiting its own exposure. For example, the Telefonica parent group has relationships in place all around the world to fuel the roaming offer, the custom plans make few changes to revenues and the Priority initiative is more about connecting two parties, rather than a big financial outlay. BT has tried to add value by spending billions on TV content, but O2 is using current assets in an intelligent way to create value for customers and partners.

O2 isn’t changing the world with these results, but the UK is a relatively sedate telco market. That said, the telco is in a very healthy position moving forward. With a sensible touch crafting a business visage to 5G, a loyal customer base and big investment plans, O2 will not be easily giving up its leadership position.

Telefonica and Seat get the MWC wheels turning

Telefonica is fuelling the hype as we motor towards MWC with connected car announcements alongside Spanish automotive giant Seat.

In an early effort to drive traffic towards its stand, Telefonica has carpooled with Seat to give the green light to three new innovations in the connected vehicles race. While there are sceptics who would want to curb autonomous vehicles enthusiasm, the duo is racing towards a happy middle-ground with three assisted driving use cases.

Firstly, the team will introduce pedestrian detection capabilities, which will allow traffic lights to sense the presence of pedestrians with thermal cameras, before relaying this information onto cars in the nearby area. Display panels will be able to inform the driver of potential risks on the road.

Secondly, connected bicycles equipped with a precise geolocation will notify vehicles in the area when the rider decides to turn right. The bikes will be detected by ultra-wideband beacons placed along the road, and should there be a risk of collision, the driver in the car will once again be notified.

While both these ideas will be powered by edge-computing, the final usecase will rely on direct communication interface. Should visibility be particularly low, stationary vehicles would detect moving vehicles, emergency lights would be turned on while the driver would, again, be notified on the display board.

These usecases might not be on the same level as the glories of autonomous vehicles, but there is a satisfactory amount of realism on display. Autonomous vehicles are not going to be on our roads for a long-time, and while that does not mean we should not continue to fine tune the technology, there has to be a focus on improving road safety today. This is exactly what is being done here.

Another similar concept is being developed in MIT. Here, an AI application analyses the way pedestrians are walking to understand whether there might be any risks. This sort of analysis is something we all do subconsciously, but a very useful and important addition to the connected car mix.

Using lidar and stereo camera systems, the AI estimates direction and pace, but also takes pose and gait into consideration. Pose and gait not only inform the pace and direction, but also give clues to future intentions. For instance, if someone is glancing over their shoulder, it could be an indication they are about to step into the road.

Looking further into the future, when autonomous taxis might be a real thing, this could also be incredibly useful. Of course, the simplest way to hail a taxi in this futuristic age will be through an app, but if the vehicle can see and understand an outstretched arm is a signal for a taxi, it would be a useful skill to incorporate into the AI.

All of these ideas are not only relevant for the long-term ambitions of the automotive industry but also very applicable today. Connectivity and AI can be incredibly beneficial for human-operated vehicles, especially with the advancements of edge-computing and leaning on the high bandwidth provided by 5G. Not everything has to be super-futuristic, and it’s nice to see a bit of realism.

Germany’s 5G auction has not got off to a flying start

Telefónica Deutschland has filed an urgent appeal against the country’s 5G auction terms. Deutsche Telekom may follow suit.

Telefónica Deutschland was seeking to halt the country’s 5G auction by filing an appeal for injunction at an administrative court in Cologne on Tuesday 5 February. Germany was scheduled to hold the 5G auction by the end of March and was expecting to raise up to €5 billion. The key items on the terms issued by the Federal Network Agency being contested are concerning the coverage requirements, especially the coverage in rural areas and along motorways, and the mandated network sharing with competitors (the so-called domestic roaming).

Telefónica Deutschland argued that the coverage obligations could not be fulfilled with the spectrum at auction, while the frequency in its possession is already being used by other expansion requirements.

“This legal uncertainty is extremely unhelpful for the necessary massive investments in future network expansion. Billions in 5G cannot be invested on the basis of unclear rules. It must be in the interest of all involved that clarity and planning security are created here before an auction,” said Markus Haas, CEO of Telefónica Deutschland.

Telefónica was also unhappy that politicians should demand network sharing between competitors. “We have already invested €20 billion in infrastructure in Germany. We have always said that we will continue to invest if the conditions are right,” Haas told the German publication Handelsblatt late last year. However, as a condition to approve its merger with E-Plus in 2014, EU regulators already required Telefónica to make 30 percent of its capacity available to MVNOs, in this case 1&1 Drillisch.

Meanwhile Telefónica insisted that even if there would be a delay in the auction, “this would not have any influence on a large-scale launch of 5G in Germany. This is because the spectrum available for auction for this purpose will not be allocated to the successful participants until the end of 2020 anyway,” the company said in a statement.

Deutsche Telekom may also consider its position differently now. It first told Handelsblatt “we have not yet made an urgent request, to avoid delaying the auction schedule.” But in light of the new appeal from Telefónica, “we are therefore examining all legal options,” the spokesperson added.

It is not the first time the telcos have resorted to legal measures. By the end of December, Deutsche Telekom, Vodafone, Telefónica, as well as the challengers United Internet and Freenet had all filed lawsuits against the government’s rules over the upcoming auction, but none was successful in halting the process.

Deutsche Telekom, Vodafone, Telefónica, and United Internet (trading as “1&1 Drillisch”) filed applications before the deadline of 25 January to participate in the upcoming 5G auction.

Vodafone and O2 UK buddy up over 5G infrastructure sharing

Vodafone UK and Telefonica UK (O2) will be entering into a new infrastructure-sharing relationship ahead of the much-anticipated 5G rollout.

The duo already has an existing relationship for shared infrastructure activities, managed through the Cornerstone Telecommunications Infrastructure Limited (CTIL) joint venture, with this extension to include 5G at joint radio network sites. In theory, such a tie-up will allow the pair to accelerate 5G rollout plans over the coming months.

“We believe that these plans will generate significant benefits for our business and our customers as we move into the digital era of connected devices, appliances and systems on a mass scale,” said Nick Jeffery, CEO of Vodafone UK. “Customers will benefit from the best 5G experience available and we will deliver even faster speeds by using our spectrum holding more effectively.”

“I’m excited by the potential of these plans to meet the future needs of our customers while delivering value for our business,” said O2 CEO Mark Evans. “In addition, these plans would allow us to utilise the spectrum we acquired in the last auction very effectively.”

Looking at the 5G ambitions, both companies are being relatively coy with the specifics. Vodafone has confirmed it will launch commercial 5G services during 2019, exactly when is unknown though, while O2 has already stated it will not enter the fray until 2020. For Vodafone, some industry analysts have commented it is pitting itself in a race with EE, suggesting the launch would be at some point during early summer.

Perhaps this is an indicator of the importance of 5G scale. Being the first to market may not mean anything in the long-run, it’s a gimmick to include in advertising more than anything else, but nationwide deployment will be critical. O2 has a marketing leading position to protect, while Vodafone wants to recapture the fortunes of yesteryear. Clearly offering the 5G network with the widest coverage will be critical to winning subscribers once 5G vaults towards mass market adoption, and this partnership seems to have an eye on that.

As part of the agreement, more responsibilities will be devolved to the CTIL, allowing the JV to improve the efficiency of its operations and pursue opportunities to add further third-party tenants to the assets. The companies also intend to upgrade their transmission networks with higher capacity optical fibre cables, readying the infrastructure for low-latency use cases such as VR, while there is also an eye on future transmission operating model which could drive synergies for investment and operations.

Although trying to get telcos to play nicely with each other is a tricky task, the idea of shared infrastructure has been on Ofcom’s agenda for some time. It might create a bit of a red-tape maze in the first instances, though there are clear benefits to the concept.

“UK 5G roll-out is on the way and operators need to be more accepting of sharing infrastructure to ensure that coverage demands from consumers and businesses can be met as quickly as possible,” said Ingo Flomer, VP Technology at Cobham Wireless.

“Deploying new 5G networks typically require operators to install and maintain new antennas, hardware and cables, which requires significant planning, management and expense. By using one common architecture, operators can minimise cost and disruption.”

Fears the highly dense urban areas will be favoured over rural regions will certainly not be dismissed following this announcement as the cities are still much more attractive commercially, but with such partnerships the delay might not be as painful. A digital divide was created by the slow rollout of 4G, but shared-infrastructure relationships should ease this chasm, at least theoretically.

Telefónica pulls its SOCs up with Nokia’s help

Operator group Telefónica is changing its UK Network Operations Center into a Service Operations Center to show how customer-centric it is.

That was the distilled message from a press launch in central London this morning, co-hosted by its vendor for this project – Nokia. Building a SOC will allow O2 UK to make customer-led, as opposed to engineering-led, decisions about its network, we were told by Brandan O’Reilly, the CTO of O2 UK.

Telefónica has apparently already got started on this process in some of its other markets, including Chile and Germany, but this is a first for the UK and also the first time Nokia has been the vendor. So this seems like a big deal for them – hence the press event.

Tim Smith, VP of Nokia Software Europe, explained its SOC platform aggregates and standardises the various network data feeds in order to be able to compare and optimise them. It’s all about being proactive rather than reactive when it comes to network management and AI seems to play a big part, as you might expect.

A lot of the questions from the grizzled telecoms hacks in attendance focused on what specific benefits a SOC offers over a NOC and how they might be measured. While reduced churn is an obvious way to track ‘customer delight’, as Smith put it, Telefonica has its own metric called NCX (Network Customer Experience), which is currently at 79 and O’Reilly hopes will jump by at least a couple of points as a result of this shift. Here are the canned quotes from the press release.

“Telefónica has always aimed to offer the best possible experience to our customers which a reactive network monitoring approach to operations could never guarantee,” said Juan Manuel Caro, director of network and IT operations at Telefónica. “With SOC we have already transformed this in three of our markets reaching the next level in automated customer experience management, granting us flexibility and adaptability that serves as a key differentiator. Nokia’s solutions and services will allow us to achieve this goal in a competitive market like the UK.”

“Telefónica is pioneering the transformation toward customer-centric operations with the deployment of Nokia eSOC,” said Bhaskar Gorti, president of Nokia Software. “Nokia is proud to support Telefónica’s digital transformations and SOC deployments across the globe and with the flexibility to adapt to existing ecosystems in local markets.”

This all seems like quite a lot of effort to go to just to labour the ‘customer-centric’ concept that has become endemic to the point of cliché in the business world. But to be fair to both companies they are at least announcing concrete measures being taken in pursuit of that aim and thus holding themselves publicly accountable for delivering it.

Q3 validates O2 indifference towards convergence

Telefonica’s UK business O2 has continued a strong 2018 performance with a 7.9% increase in revenues in the third quarter, while it greedily captured an additional 120,000 subscribers.

The results perhaps justify the businesses decision not to enter into the convergence fight. Back in July, CEO Mark Evans confirmed the business would continue to focus on its mobile-only proposition, and wasn’t convinced entirely by the idea of bundled services. This statement is certainly contradictory to many telcos across the world, including its own cousin, Telefonica Germany, which plugged 5G FWA at Broadband World Forum. That said, the numbers speak for themselves.

Over the last three months, total revenues stood at £1.5 billion, up 7.9% year-on-year, while mobile service revenues grew by 3.4%, thanks to customers choosing larger bundles and MVNO growth. The O2 network now has 32.3 million customers, including MVNOs such as Lycamobile, making it the busiest network in the UK. Churn was also down to 1%, which O2 claims is the best in the UK.

“We continue to put the customer at the heart of our business, delivering leading propositions and unique customer experiences, as demonstrated by the launch of our revolutionary O2 Custom Plans, exclusively available in our direct channels,” said Evans. “O2 Custom Plan offers customers real choice, by giving them control, flexibility and transparency, and has once again driven the O2 point of difference in the market.

“Our on-going commitment to invest in our network includes enhancing 4G connectivity and preparing the ground for 5G. As champions of mobile we continue to build for the future, where mobile is one of the most powerful opportunities to strengthen the UK economy and enrich our society.”

This laser like focus on mobile is probably best for everyone involved. Despite O2 leading in the market share race, it has consistently been condemned for having the worst network in the UK. This has been confirmed quarter after quarter, by a variety of different sources. Some might come to the conclusion the consistency of poor performance simply suggests the management team does not care that much. However, efforts are being made to improve this record.

In the most recent spectrum auction, O2 claimed all the available 2.3 GHz spectrum to enhance its 4G offering. This spectrum has already been put to use, while most recently O2 suggested it was going to improve connectivity in 339 rural communities throughout the UK. The business is investing in its network, with the financial results indicating O2 spent £192 million on CAPEX over the quarter, which works out at roughly 12.5% of total revenues. This is not the highest around, but it is a healthy number.

O2 is the first of the UK MNOs to release its financial results for the third quarter, so there isn’t a fair comparison to make at the moment. However, 7.9% growth is going to be a very tough number to beat. Perhaps there is something in this ‘do what you know how to do’ mentality from O2.

BBWF 2018: Telefonica Germany pitches case for FWA

Telefonica’s UK business O2 might be avoiding convergence like the plague, but for its cousins in Germany, FWA is one of the biggest drivers for the adoption of 5G.

Speaking at Broadband World Forum in Berlin, Cayetano Carbajo Martín of Telefonica Germany is not fearful of the convergence distraction. In fact, it might just save the country from a connectivity embarrassment.

“5G implementation will be driven by different needs from fixed wireless access to ever increasing eMBB demand and even co-created new industry and service solutions,” said Martín.

As you can probably imagine, dealing with the tsunami of internet traffic is a big driver for 5G within Telefonica, but FWA is a long-term money making opportunity. In terms of the rate of growth, Martín highlighted traffic increased 160% over the last 12 months on O2’s network. Looking forward, even if you take a conservative estimate of 50% year-on-year growth, by 2027 internet traffic will be 38 times greater than it is today.

Looking at today’s resources, the network will hit full capacity by 2022 and the demand for new frequencies will become a necessity. And of course, these are conservative estimates not taking into consideration the unknown usecases of tomorrow. From a bandwidth perspective, 5G is increasingly becoming a necessity, with the deadline is becoming shorter and shorter.

This will also facilitate the telcos plans to venture into the FWA market. Martín highlighted there are no ambitions to explore the possibility of 4G FWA, it simply wouldn’t be able to compete with the experience of traditional broadband, though trials in Hamburg are readying the assault on the FWA space. If you listen to Martín, the opportunity is quite significant, with the CTO predicting 20-25% of Germany will convert to FWA, and perhaps this will dig Germany out of a hole.

Like the UK, Germany is one of those markets which has not glorified itself with an ambitious fibre rollout and is now playing catch-up. The FWA buzz which is beginning to build might just disguise a couple of blushed Bavarian cheeks should 5G-driven FWA be able to cover up the fibre-less cracks across the country.

What is worth noting though is FWA will not be the saviour many are plugging it to be. Some, no names mentioned, believe it might be able to bridge the connectivity gap between urban and rural environments, but this is exaggerated. The same financial pressures will be on FWA as there will have to be suitable population density to build the business case. FWA will not mean gigabit speeds will be democratized.

Even at what is supposed to be a fixed broadband conference, 5G has managed to muscle in on the action. It’s almost embarrassing how much its hogging the limelight.