Nokia UK CEO: Where are the bodies to build the networks coming from?

Cormac Whelan, Nokia’s UK CEO raised an interesting point in a recent conversation with Telecoms.com. Where are the employees to implement ambitious rollout plans?

As it currently stands, the UK is rapidly upgrading its nationwide broadband network. Virgin Media is expanding its fibre footprint by more than 100,000 premises a quarter, while Openreach is doing the same number each month. CityFibre has got approval to expand its fibre footprint to 70 cities across the UK, and various different alt-nets are scaling as well. Toob is growing in Southampton, Gigaclear is growing in the South-West and HyperOptic is scaling in London.

Arguably, the UK has one of the fastest growing fibre initiatives across Europe. Yes, it missed the memo which was sent to everyone else years ago, but it is finally arriving to the fibre feast. There are calls to increase the pace further, see BoJo’s ridiculous comments, but you have to wonder how much quicker the industry can actually go.

“Where are the bodies going to come from?” Whelan asked during a conversation at the Connected Britain conference in London. It’s a simple question, but one few have actually asked.

Last year, Openreach recruited 3,000 staff to help with its fibre plans, and it plans to add another 3,000 across 2019. Virgin Media’s Project Lightning is continuing to progress, and it is recruiting. If the alt-nets want to continue to scale, they will also need more bodies. But, finding these individuals is not simply a case of slapping a hard-hat on Joe Bloggs. These are specialised careers with a lot of training, soon enough the candidates are going to start drying up.

One of the big issues facing the industry, as Whelan points out, is the attractiveness of working elsewhere. The UK is a cosmopolitan society, but that is changing. With Brexit on the horizon, the UK is becoming less appealing to EU workers. There are more EU citizens arriving on UK shores than leaving, but immigration is at its lowest levels since 2013.

The big question which will need to be asked is whether it is more prosperous for workers who have the skills attractive to telcos to work in the UK or in the country of their birth? This is not suggesting that all field engineers are of EU dissent, but due to education trends over the last couple of decades there are less UK citizens suited to these professions than in previous generations.

The millennials were a generation ushered towards university. The percentage of UK citizens who are now in their 20s, 30s and early 40s have a higher proportion of degrees than previous generations. It is becoming less attractive to go to university nowadays, such is the horrendous price of tuition fees, but that does not fix the problem. Attracting workers from the EU was one way to fill the gaps in these fields of expertise.

As Whelan pointed out, Poland has an on-going broadband initiative running nationwide, while so do Hungary and Germany. Soon enough, the Czech Republic will be kicking off their own projects and so will numerous other EU nations. The UK is not the only place in Europe running large scale broadband schemes, but with Brexit on the horizon it is becoming increasingly unattractive as a place of work for EU citizens. Just as the UK telco industry needs to hire more field engineers, the availability of candidates might just start drying up.

Addressing BoJo’s preposterous claims 100% FTTH could be delivered by 2025, Robert Kenny, co-founder of Communications Chambers, suggested Brexit would be his downfall. Fortunately, the point Kenny is making also supports the argument being made here.

“Brexit has resulted in a large number of continental European engineers and construction workers returning home from the UK, meaning that telcos are having a nightmare recruiting the staff necessary even for the current pace of deployment,” Kenny wrote on LinkedIn. “Quite how they would radically accelerate is not clear.”

Some might suggest technology can take over and plug the gaps. Yes, the likes of Openreach and Virgin Media are getting better and faster at rolling out fibre networks. However, Whelan believes the technological gains will only help these companies maintain the current rate, to increase the pace of deployment there is only one solution; hire more people.

The UK is making progress. After years of ignoring the benefits of a fibre diet, the penny seems to have dropped. However, as with everything in life, some people will never be happy. It doesn’t matter is the UK is adding 3-4 million fibre premises to the network a year, more is always better. But more might not be possible before too long.

CityFibre puts forward the case against telecoms consolidation

Whenever CityFibre CEO Greg Mesch takes the stage at an industry conference you can expect a combative presentation and once again he delivered.

There was of course the customary pop at Openreach and the odd moan about the way fibre is advertised, but the crux of the talk at Connected Britain this morning focused on competition. No-one in the industry is brave enough to suggest competition is bad, but there are nuances to every argument. This nuance from Mesch effectively undermined the recurring argument that consolidation is good.

“Whoever takes over from Sharon White at Ofcom must not only encourage competition but protect it,” Mesch stated.

Competition is a buzzword which can be applied to almost every facet of the industry, and CityFibre has certainly benefitted from the hype. This is not to say the focus from government and regulators to promote competition is the only reason CityFibre is a success, it did after all spot a weakness in the fibre market and aggressively capitalised ahead of Openreach. But a nod to the desire to promote competition should be made.

Intensifying the focus on increasing competition will continue to benefit CityFibre, and arguably it will continue to benefit the UK, however it does present a problem for others in the telco industry. The more successful CityFibre is, the more the argument that CSP consolidation will be a good thing.

“The spark of competition has transformed into a small flame, but that small flame can be snuffed out if not protected,” Mesch stated.

It hasn’t been long since the UK was captured by the Openreach monopoly, and even after Virgin Media entered the fray, the country wasn’t exactly a competitive hotspot. CityFibre has added another dimension and the growth of ‘alt-nets’, such as HyperOptic, is further adding variety.

The UK telco landscape is certainly changing, and CityFibre has evolved as a business. To describe it as a plucky challenge would be a bit unfair nowadays, especially with the financial injection from Antin Infrastructure Partners and Goldman Sachs. Mesch said the board has approved expansion plans, and soon enough CityFibre will have deployed a fibre spine in more than 70 locations around the UK.

The success of CityFibre is arguably a factor which is pushing Openreach towards a fibre-first mentality, perhaps because Mesch and co. proved there was appetite in the market. And elsewhere, there are more competitors appearing on a more regional basis. HyperOptic is gaining scale in London, Toob has a presence in Southampton and Gigaclear is growing in the South-West.

Perhaps most importantly, the alt-nets are now being considered as realistic alternatives.

At the same conference, Sky UK CEO Stephen van Rooyen pointed out the company had unveiled an RFP in March with plans to announce the selected partners in the Summer. Sky is taking an interesting approach here, with plans to work on a regional basis with alt-nets instead of taking a nationwide procurement approach.

Arguably, because of the likes of CityFibre and the increasing popularity of the alt-nets, fibre is being pushed up the agenda and this isn’t even considering the ludicrous and idiotic statements made by Tory Leadership content Boris Johnson.

For the UK Government and regulator, the increasingly prominent role of fibre validates and justifies its pro-competition, anti-consolidation position. If the fibre landscape can benefit from increasing the number of players, the same arguments and theories can be applied elsewhere. This success effectively undermines any pro-consolidation voices which might still exist.

UK steps up its consumer protection crusade

The UK government has announced it wants to give some regulators the power to fine companies unilaterally without involving the courts.

The main beneficiary of these proposed new powers will be the Competition & Markets Authority, which exists to regulate markets. The plan was unveiled by Business Secretary Greg Clark as outgoing Prime Minister Theresa May rushes through a bunch of commitments in an apparent bid to have something to show for her time in charge. Specifically this refers to claimed ‘loyalty penalties’ in which existing customers are given insufficient information about available deals.

A key part of this initiative seems to be to give the CMA the power to interpret and enforce the law itself, without needing to trouble the judiciary. Why the matter of a few punters paying a bit more for their utilities is a matter of sufficient gravity to suspend the rule of law is not made clear, but Clark seems to want the CMA and possibly other regulators to be able to fine companies whenever they feel like it.

The Government has already committed to legislate in order to give consumer enforcers the power to impose fines on companies for breaches of consumer law by applying to the courts,” wrote Clark in his letter to the CMA. “We will follow this through and also want to go further to ensure that enforcers have the powers they need to incentivise firms to comply with the law. This will include empowering the CMA to decide itself whether consumer protection law has been broken and then impose fines for wrongdoing directly.”

“I strongly believe that consumer loyalty should not be exploited and nor should consumers have to work so hard to get a fair deal,” said Clark in the press release of the announcement. “We have already shown our willingness to take action through our energy price cap, which means every household is protected from unjustified price rises.”

The system as it stands not only lets consumers down but it also lets down the vast majority of businesses who play by the rules,” said May. “It is high time this came to an end and today we are confirming our intention to give much stronger powers to the CMA, to strengthen the sanctions available and to give customers the protection they deserve against firms who want to rip them off.”

All this agonising over the plight of hapless UK consumers isn’t limited to the government. The Advertising Standards Authority thinks UK companies shouldn’t be allowed to portray claimed ‘gender stereotypes’ in their ads because they might cause some unspecified harm. Even the prospect of harm is now sufficient justification for state censorship, it seems.

“Our evidence shows how harmful gender stereotypes in ads can contribute to inequality in society, with costs for all of us,” said ASA boss Guy Parker. “Put simply, we found that some portrayals in ads can, over time, play a part in limiting people’s potential.  It’s in the interests of women and men, our economy and society that advertisers steer clear of these outdated portrayals, and we’re pleased with how the industry has already begun to respond”.

So we’re not even talking about harm here, just ‘playing a part in limiting people’s potential’. Parker is so concerned about this blight on UK society that he has sat on his claimed evidence for two years before acting. Here are the ‘outdated portrayals’ advertisers are no longer allowed to depict.

  • An ad that depicts a man with his feet up and family members creating mess around a home while a woman is solely responsible for cleaning up the mess.
  • An ad that depicts a man or a woman failing to achieve a task specifically because of their gender e.g. a man’s inability to change nappies; a woman’s inability to park a car.
  • Where an ad features a person with a physique that does not match an ideal stereotypically associated with their gender, the ad should not imply that their physique is a significant reason for them not being successful, for example in their romantic or social lives.
  • An ad that seeks to emphasise the contrast between a boy’s stereotypical personality (e.g. daring) with a girl’s stereotypical personality (e.g. caring) needs to be handled with care.
  • An ad aimed at new mums which suggests that looking attractive or keeping a home pristine is a priority over other factors such as their emotional wellbeing.
  • An ad that belittles a man for carrying out stereotypically ‘female’ roles or tasks.

That’s all nice and clear isn’t it? Presumably it’s OK to have a bloke doing the washing up in an ad, or a woman chopping down a tree, so long as it’s not also considered to be taking the piss. It looks like ads now have to feature unattractive people being fancied by everyone, but it’s unclear whether beautiful people are allowed to be fancied too. Lastly the ASA advises that banned gender stereotypes are allowed as a means to challenge their negative effects, so the Gillette ad below is presumably OK.

At this rate it’s possible to imagine a time when no UK consumers will ever come to any harm whatsoever and everyone will be free to explore their full potential, unencumbered by dispiriting imagery. Anyone who has a problem with UK agencies unilaterally fining and censoring companies in the name of the public good clearly doesn’t understand the danger we’re in.

 

BoJo’s 2025 fibre promise has no basis in reality

Being ambitious is all well and good, but most would hope the ambitious are living in the world of reality. Unfortunately, with Boris Johnson’s Fibre-to-the-Home objectives, he’s operating in dreamland.

Perhaps this is a situation which we should have come to expect. Theresa May has one foot out the door and the jostling to inherit 10 Downing Street is starting to ramp up. This weekend saw the first televised debate, with one obvious omission, and soon enough the big promises to woo the Conservative Party membership are going to be dominating the headlines.

Politicians tend to exaggerate when it comes to promises on the campaign trail, and Tory leadership hopeful Boris Johnson (BoJo) certainly has history; who could forget the £350 million we were going to save the NHS every day by leaving the European Union.

The latest promise from BoJo is his government would deliver full-fibre broadband to every single person in the UK by 2025. This target would wipe off eight years from the current strategy set up by the Government in the Future Telecoms Infrastructure Review (FTIR).

Just to emphasise this point. The current objective is seen as ambitious and would see the full-fibre rollout complete in just over 13.5 years, but BoJo is suggesting it can be done in less than half that time.

The feedback from our conversations with industry is simple; what planet does BoJo think he is on?

However, what is worth bearing in mind is that the ambitious always have been criticised. When someone comes out with a bold idea, sceptics will beat them back. It is easy to criticise BoJo with this claim, because it is almost impossible to imagine how it is going to be done, but on the other hand, it is almost impossible to criticise the ambitious because there is no substance, no detail and no plan. It’s not something which should be taken that seriously because there are no details in place to actually make it happen.

One of the questions you have to ask is when did BoJo become a telco guru? We’re struggling to think of any examples of when he has contributed in any meaningful manner to the connectivity debate. If BoJo has had these telco smarts all along, able to solve one of the biggest challenges the industry has faced in decades, he certainly was playing the long-game in keeping them to himself.

Openreach has of course been perfectly politically correct when asked for comment. “It’s hugely ambitious, but so are we,” said an Openreach spokesperson. “We agree that full fibre can be the platform for the UK’s future prosperity and no company is investing more, building faster or aiming higher than Openreach. We aim to reach four million homes and businesses by March 2021 and up to 15 million by mid 2020s if the conditions are right.

“We’re already in decent shape when it comes to ‘superfast’ broadband, which is more widely available here than in almost any other comparable nation on earth – and has led the UK to have the leading digital economy in the G20.

“But building full fibre technology to the whole of the UK isn’t quick or easy. It requires £30 billion and a physical build to more than 30m front doors, from suburban terraces to remote crofts. We’re determined to lead the way and there’s a lot that Government could be doing now to help us go further and faster.”

But let’s assume BoJo is the master of telco, as we don’t have to be as nice as those in the industry; we have a couple of questions. Firstly, where is the money coming from? Secondly, where are the scissors to cut through the red-tape maze? Thirdly, where are the new employees going to emerge from? And finally, how did he actually come to this figure without actually speaking to anyone in the industry?

Starting with the money, the big query from our contacts was where is the cash coming from? The telcos are working as fast as they are commercially capable of, but BoJo believes they can go faster should the right incentives be put in place. The industry suggests full-fibre infrastructure would cost in the region of £30 billion, and it won’t be stumping all of that cash up. That’s not how investment strategies work.

A sensible and scalable capital investment strategy is focused on gradual rollouts, with an emphasis on ROI as the deployment progresses. You need to reclaim the investment as you are continuing to spend otherwise you are making yourself vulnerable to seesaw of market trends through over-exposure.

If BoJo is suggesting massive government funding projects, fair enough, but considering the NHS is underfunded, schools are overcrowded and there aren’t enough coppers on the beat, we’re not too sure where he is going to find this cash to fix what is fundamentally a first-world problem.

Secondly, you also have to wonder whether BoJo has put any thought into the bureaucratic challenges which the industry is facing. This is what our industry insiders were so confused about; has there been any thought to the administrative and bureaucratic challenges which are some of the biggest hurdles to deployment?

The 2033 target is one which has been put in place with these challenges in mind. The Government is considering proposals which would address way leaves, access to new builds or business rates for fibre, but these are still question marks. Perhaps BoJo is going to come in and carve away all the red-tape which is holding deployments back, creating a light-touch regulatory environment.

2033 will only be achieved should the right regulatory conditions be cultivated. If BoJo is going to correct this challenge, he’ll have to take a very large hatchet to the rulebook. This point has also been echoed by the Internet Services Providers’ Association:

“Boris Johnson’s ambitious commitment to achieve full fibre coverage by 2025 is welcome, but needs to be matched with ambitious regulatory change, including reform of the Fibre Tax,” said Andrew Glover, ISPA Chair. “Broadband is a largely privately financed infrastructure and together with outdated planning laws, fibre business rates are holding our members back from accelerating their roll-out plans.”

Another consideration is on the people side of things. Openreach recruited 3,000 engineers last year and is planning to recruit another 3,000 this year. Virgin Media is continuing to recruit to fuel Project Lightning, but you have to wonder how many bodies these companies will need to meet the 2025 target.

Even if there was an aggressive recruitment drive, people with the right skills are not just lazing about on street corners. One person pointed out that it isn’t a case of simply putting a hard hat on Joe Bloggs and asking them to dig a hole; there is a lot of training which goes into the recruitment progress. Another wondered whether there would be enough potential recruits if BoJo achieves another one of his headline promises; Brexit. How much of a talent drain will there actually be?

The speed at which full-fibre networks are being deployed is already pretty quick, the industry is connecting 3-4 million homes a year to meet current objectives. To hit Bojo’s ambitions, this number would have to be north of 5 million a year. Virgin Media’s Project Lightning is adding 400,000-500,000 premises a year, while Openreach is adding more than a million. Add in the alt-nets and progress is promising. Going faster is going to be tricky in today’s world.

We’re not too sure who BoJo has been talking to when he came to the 2025 target, but one thing is pretty clear; he’s not on the same page logistically, bureaucratically or financially as the telcos.

Tory leadership favourite makes 2025 FTTH commitment

Former-Foreign Secretary and the favourite to be the UK’s next Prime Minister Boris Johnson has undercut DCMS and Ofcom commitment for full-fibre by eight-years.

Writing an op-ed piece for The Daily Telegraph, Johnson (BoJo) has suggested his government would commit to delivering fibre-to-the-home (FTT) broadband connectivity to 100% of the UK population by 2025, beating out current commitments by eight years.

“Think what we could achieve if the whole country had the same lightning access to this essential tool of progress,” BoJo stated. “If the Spanish can do it, why can’t we? Let’s say goodbye to the UK’s manana approach to broadband and unleash full fibre for all by 2025.”

As it stands in the Future Telecoms Infrastructure Review (FTIR), the UK Government has targeted full-fibre broadband for all households by 2033. This might sound like a ludicrous amount of time, though it is the final 10% which is envisioned to be the most difficult. There has been progress in upgrading the UK from copper to fibre, though the UK does seem to be falling behind other European nations.

According to the latest statistics from the Fibre to the Home Council Europe, 1.5% of UK subscribers have adopted fibre services. The industry is suggesting 7% availability of fibre services, while the Government is targeting 15 million premises to be connected by 2025. Steps forward have been made, albeit smaller ones than the likes of Spain, Latvia, Lithuania and the Nordics.

The issue with connecting all of these homes is down to the commercial gain for the telcos. When you get to the rural regions of the UK, delivering FTTH, or even fibre-to-the-cabinet, is not commercially attractive. Not only do you have to worry about the raw materials, there is the complication of civil engineering and the difficulties of navigating the red-tape maze of local authority governance.

This is why the Government is not worried about the first 90% of UK premises, but it is the final 10% which everyone should be concerned over. To connect these final premises, the telcos would have to be encouraged with public funds, as the commercial gain is seemingly below-par.

“But when I mentioned another priority of mine – almost casually – those farmers smote their weatherbeaten hands together and roared their assent,” said BoJo. “They want better broadband. They are indignant at the current failure to provide it – and they are absolutely right.

“A fast internet connection is not some metropolitan luxury. It is an indispensable tool of modern life. You need it for your medical prescription, for paying your car tax, for keeping up with the news and with your family and friends. It is becoming the single giant ecosystem in which all economic activity takes place. It is the place you find bargains. It is the place you find customers.

“It is not only the place you can find a job. It is the means by which you can be interviewed, and your talents uncovered, without incurring the cost of a rail ticket. If your area has a truly fast broadband connection, that area will be a better place to live, to invest, to set up a business; and that area will have a better chance of retaining talented young people and allowing them to start-up businesses and bring up their families.”

Undercutting Government objectives is of course a good way for a leadership hopeful to gain column inches and woo party members, many of whom will live in the more affluent rural areas, but is it actually possible? BoJo has already faced criticism because of dubious claims, just think back to the £350 million a week savings which was emblazoned across the bus during the Brexit campaign.

Telcos can of course be coerced into getting on with their jobs faster than they would like to, but this is an arduous process; the telcos have become masters of stubbornness. And as you can imagine, BoJo has been light on details as to how this accelerated rollout would be achieved, simply stating it would require more government investment.

So here is the question; does BoJo genuinely believe he can speed-up the transition to a fibre diet, or is this another suspect claim which will lead to another member of the general public taking him to court?

Ofcom adds some colour to ‘fairness’ campaign

It might sound like a political punchline, but the ‘Fairness Framework’ from Ofcom is starting to take shape, though whether it forces telco transparency remains to be seen.

The Fairness Framework is effectively incremental progress to address what some would suggest is an unfair dynamic between buyer and seller in the wider communications industry. While there is a gluttony of comparison websites which bill themselves as a means to cut-through the white-noise generated by the telcos, it is still an arduous campaign to find the best deal available, and then subsequently get out of current contracts.

Most would consider themselves above the risks and pitfalls of suspect and nefarious contracts, though campaigners believe this is not the case. In September last year, the UK Citizens Advice Bureau (CAB) launched a super-complaint with the Competition and Markets Authority (CMA) suggesting service providers over-charging renewing customers to bring in an extra £4.1 billion a year.

In today’s announcement, Ofcom has provided more detail on the ‘Fairness Framework’.

Firstly, Ofcom has be conducting a review as to how to create a mechanism to ensure clearer, fairer deals for people who pay for mobile services and handsets together. Final proposals will be made public over the next couple of weeks.

Secondly, the team is currently reviewing broadband pricing practices, attempting to understand why some pay more than others for similar or exactly the same services. Vulnerable members of society are the ones who at the greatest risk here. Another initiative ties into this area, attempting to force the telcos to provide clear, honest information for broadband shoppers. Ofcom is also attempting to introduce rules which will compel service providers to be more transparent when their initial contract is up and explain their best available deal.

Another initiative will allow mobile phone customers to switch provider with a text message, while there are plans underway to introduce a new compensation scheme to provide money back for broadband and landline customers when things go wrong.

For the moment, the majority of this announcement should be attributed to the ‘work in progress’ column. Some of these initiatives will be written into regulation sooner rather than later, though most will still have to be cast out for public consultation. This is a mid-year report card more than anything else.

That said, it’s not a bad thing. In opposition to the stance of the telcos, Ofcom is attempting to be as transparent as possible with its work.

This is the objective of Ofcom here; transparency. For years, the telcos have operated partly behind a curtain of obscurity. Contracts were complicated due to a lack of transparency, and this is what Ofcom is looking to tackle. It is nice to see progress is being made, but we’re not quite there yet.

Three plans to continue to be the awkward one

Three became the third telco to outline its ambitions in the 5G world this week, taking a slightly different approach to EE and Vodafone but it could prove to be the most interesting.

Although some have talked-down the long-term prospects of fixed wireless access, it does break down the barriers for those who want to enter the broadband market. At 5G World, we got the chance to speak to Ros Singleton, MD of UK Broadband, the subsidiary and smarts behind Three’s broadband challenge.

“Three is now a lot more of an established company, but they still like to disrupt,” said Singleton.

Three might not be a start-up anymore, but it still likes to maintain a position as a thorn in the side of the long-time established telcos. Just can your mind back to the ‘Make the Air Fair’ campaign of 2016, Three has always made a habit of doing business a little bit differently from the status quo.

The fixed wireless access (FWA) proposition could fit into this mould very effectively.

Singleton suggested that while there is an obsession with fibre as a means of broadband delivery, why shouldn’t the last mile be delivered over the air. A fibre spine with wireless wings is an interesting concept, and right now, it should be able to satisfy the intense data demands of 21st century consumers.

“Customers want broadband to work just like water,” said Singleton.

This idea perhaps undermines the ‘bigger, badder, faster’ mentality which has dominated the telecoms industry for decades. With 5G on the horizon and fibre promising lightning fast connectivity, you have to wonder how much of this horsepower would be redundant.

FWA is not an idea which has been heralded in with the emergence of 5G. It has existed as a product in the 4G-era and has offered a satisfactory experience. What Singleton believes is that customers just want broadband products to work, they don’t care about 100 Mbps. If 20 Mbps is all the customer needs, then why worry about delivering on top of that; its nothing more than window dressing.

5G of course helps to deliver more speed to the customer, but more importantly, it delivers a significant upgrade to capacity. For Singleton, this is a much more notable upgrade. The wider the pipe, the more data which can be delivered to consumers and the more reliable the connection is.

If you consider there are very few, or potential no applications available which would require 100 Mbps, customers will be more worried about whether a connection is stable, consistent and reliable. Capacity might be the ugly duckling of the connectivity family, but it can prove to be a game-changer when it comes to delivering on promised experience.

This is where Three could make a dent in the broadband space. Delivering an experience which satisfies the expectations of the consumer, but also adding in the element of simplicity.

The team are currently running a live-trial of the FWA proposition in Camden, with the aim to create an experience which undercuts that of rivals. For example, aside from reading a few instructions, the hope is that customers can simply open the box and plug-in a 5G router. It is supposed to be as simple as that. Customers won’t have to wait for an engineer, self-installation is the aim. The Camden trials will inform the team how this ambition can be achieved.

On the price side, Singleton was a bit shy, and the same could be said about speeds. The aim to at least match the performance and price of competitors, we suspect there might be an undercut, remaining true to the Three playbook, but the idea of simple installation, rolling contracts and relevant experience is how the team plan to differentiate.

This is supposed to be a challenge to the status quo. The team are not targeting any of the competitors in particular, though it is a very broad approach to FWA, the team is launching in 25 cities by the end of the year. Most importantly, Three has a track-record of being a pain; this is a product which is well worth keeping an eye on.

US pressure forces UK government rethink about the Huawei situation

On the opening morning of the 5G World 2019 event in London, the UK Secretary for DCMS Jeremy Wright revealed the Huawei situation has been complicated by events in the US.

Wright’s keynote address didn’t initially address any specific companies, focusing instead on some fairly scripted stuff about the importance of 5G to the future of the UK. “As a government we see 5G as a great opportunity,” said the Secretary of State for Digital, Culture, Media and Sport.

He did make the announcement that his department has just started a consultation on reforms to the planning process to make it easier to roll out 5G infrastructure, including fibre, and revealed the Ministry of Defence recently freed up a bunch of 8 GHz spectrum.

Wright concluded his talk by emphasising the importance of security in the nascent 5G network, reflecting that the UK’s security framework needs to be significantly strengthened. He was clearly skirting around the specific matter of Huawei but it took further prompting from the host of the keynotes, Light Reading Editor Ray Le Maistre, for him to cut to the chase.

The government review currently underway is not specific to any company or even country, Wright was keen to stress. But referring to “the company everyone has in mind,” without actually naming Huawei, he said some recent complications, especially from the US, have made the decision about what to do with respect to Huawei’s involvement in the UK’s 5G network, even more difficult.

Reading between the lines, Wright seemed to be leaving the door open for a tougher government line on Huawei than had been implied by the leak from a few weeks ago, which indicated the UK would try to plot a middle course in which Huawei would be involved to a limited extent. The complications referred to probably mean the ramping of political and intelligence pressure from the US and it wouldn’t be surprising to see the UK eventually do what it’s told with respect to Huawei.

High road or blind alley? BT’s campaign for “open access” to street furniture

Telecoms.com periodically invites third parties to share their views on the industry’s most pressing issues. In this article Antony Tomlinson, CEO of network builder Ontix, which has a concession agreement with the council in Westminster, shares his views on the concession model, addresses BT’s suggestion that they’re the wrong way to go, and explores what we should do to accelerate the roll-out of next-generation networks.

Local councils who want their street furniture to host telecoms equipment have generally chosen to agree concession contracts with wholesale infrastructure providers (or “WIPs”). The WIP takes on the work and the business risk, paying a license fee to the council and charging a wholesale fee to the operators.

BT was party to several such concessions, but now it is opposed to them.  In March, it called for “open access” to street furniture: indeed, it now believes that concessions are a barrier to investment, and it is proposing an alternate model in which operators engage separately and directly with the council.

BT has started an interesting discussion at a pertinent time, now we’re starting to see small cells being deployed in volume. However, if we want more small cells – plus WiFi and other technologies as well – then we can’t expect the operators to build all of it. We need more collaboration, with WIPs providing infrastructure which they can then all share. Unfortunately, BT’s proposal would prevent the collaboration that we now need more than ever.

The BT narrative

BT’s press release was cleverly framed.  It focused squarely on the concession model, as if there couldn’t really be any other reasons why more small cells have not been deployed to date. It chose targets that would resonate: councils, red tape, middlemen. It said it was now clear that concessions were a barrier.  Luckily, BT had the solution: “open access”. There wasn’t much detail on how it would work in practice, but that was for another day. The key message – a proven crowd-pleaser – was that it would “take back control”.

The reaction was interesting. Some readers found it ironic: BT hadn’t shown much enthusiasm for “open access” when other providers wanted to access BT’s ducts and poles. And was BT really negotiating here as it prepares to engage – and maybe displace – incumbent WIPs? However, a number of commentators were cautiously positive, including Jamie Davies in his article for this site (“BT pleads for open access to street furniture”).

We need small cells on street furniture.  Deployment hasn’t happened at the rate we would want to date (although we can see some significant deployments now), so we should absolutely debate what needs to change. But let’s frame our debate right. Unfortunately, BT’s narrative doesn’t do this. Their basic statements simply don’t bear scrutiny, for example:

  • There is no evidence to suggest that concessions have been a barrier to small cell deployment. On the contrary, most – if not all – of the small cells that have been deployed to date have been deployed under concessions, including in the City of London, Hammersmith and Fulham, and Aberdeen.
  • Concessions are “open”: a WIP is incentivised and contractually obliged to provide access and services to all operators on a fair and non-discriminatory basis. It is simply wrong to imply that concessions grant a single player “exclusive access to council-owned street furniture”.

It really isn’t credible to suggest that the reason there are no small cells in Carlisle and Plymouth is because of the concession, as BT has implied. We need to reframe the discussion more realistically, or we will direct friendly fire at the wrong targets.

Reality check

There are some very basic reasons why more small cells haven’t been deployed to date. The operators have been focused on macros, and upgrading them for 5G. Some operators are only just piloting small cells now. Moreover, the vendors are only just starting to produce versions of their small cells that are optimally small. Previous generations of units were often too big and heavy for our street furniture, especially if they also needed separate housings and external antennas.  Maybe we should be more realistic about why we are where we are.

There is nonetheless a more fundamental challenge that won’t fix itself.  Small cells provide less coverage and less capacity than macros, so the TCO and the lead time needs to be reduced proportionately if they are ever going to be a default solution. Unfortunately, the cost and complexity of small cell deployment doesn’t scale down easily due to several factors:

  • Deployment remains complex and costly if an operator has to do it all by itself, ie. building relationships with lots of councils, and resourcing and managing large numbers of small deployments – especially if councils have limited resources to streamline and support the process.
  • Connectivity is a major blocker if an operator needs its own fibre connection to every post.

What do we do?

Fundamentally, the operators need someone independent to deploy and manage shared infrastructure that they can license, so they don’t have to build their own “DIY”.

BT’s proposal cannot help here: it leaves operators doing it all DIY.   But the concession model can help – and it really does. In Westminster, where Ontix has a concession with the council, we are building a hybrid fibre/microwave network (“Metrohaul”) to provide high capacity / low latency / low cost connectivity to connect street furniture across the borough for different operators and different technologies – and on lead times that would otherwise be unthinkable. We are also planning a new shared antenna solution in Oxford Street, so that different operators can use the same new street furniture when the area is redeveloped. These are things that wouldn’t happen in a model that left operators to deploy on a DIY basis.

Of course, the concession needs to be set up right. The council’s priority should be the public benefit: and the WIP should be neutral.  But if it’s done well, a concession can unlock potential that would be lost in a DIY model, where operators would spend their time and money trying to landgrab assets and then build duplicate infrastructure because there was no larger strategy.

We aren’t suggesting that concessions are the only answer, or that every council should do exactly the same thing. It takes time to run a tender for a concession like Westminster. A “concession lite” might be more appropriate for a town where there’s less demand but the council wants to contract resource instead of building up its own team. Maybe some councils don’t need a concession at all. But we are suggesting that, far from being void, the concession model is very relevant.

The councils themselves are really best placed to determine their own approach, so let’s encourage them to do something – but give them the latitude to decide what to do and how to do it.

UK telcos ask for clarity sooner rather than later over Huawei – report

The UK’s largest mobile operators are reported getting tired of Government indecision, drafting a letter to Cabinet Secretary Mark Sedwill requesting clarification on the situation.

The BBC is claiming to have seen a draft in which a decision has been urged. As it stands, the MNOs are in the telco version of purgatory. The 5G world is fast approaching, but with the Government getting comfortable on the fence, no-one will want to make any investment decisions, a wrong-turn could prove to be very expensive.

In response to the rumours of such a letter, the UK Government has asked for patience.

“The security and resilience of the UK’s telecoms networks is of paramount importance,” said a Government spokesperson. “We have robust procedures in place to manage risks to national security and are committed to the highest possible security standards.

“The Telecoms Supply Chain Review will be announced in due course. We have been clear throughout the process that all network operators will need to comply with the Government’s decision.”

What is worth noting is the BBC coverage perhaps reflects a sense of urgency which is not felt by the telcos. Having reached out to contacts in the industry, the tone of urgency which has been reflected in the article does not seem to represent the climate for the telcos. It is a sensitive issue, and the message seems to be clear; we’re not going to force the hand of the Government into a speedy decision.

“We do not comment on draft documents,” said a Vodafone spokesperson. “We would ask for any decision regarding the future use of Huawei equipment in the UK not to be rushed but based on all the facts.”

“We are in regular contact with UK Government around this topic, and continue to discuss the impact of possible regulation on UK telecoms networks,” said a BT spokesperson.

That said, a decision needs to come sooner rather than later.

Currently the MNOs are in a bit of a bind. Money needs to be spent and networks need to be built to ensure connectivity in the UK meets the standards demanded of the digital economy. However, as there are so few vendors in this segment of the industry clarification on the Huawei situation is critically important.

Without Huawei, the threat of decreased competition might lead to less attractive commercial terms, which could lead to increased prices for the consumer as telcos drive ROI. Telcos will want Huawei to be included in these talks. Right now, no decisions can be made. If the telcos go forward without Huawei, they might be missing a trick, but if they do and the Supply Chain Review bans the firm, the cost of ‘rip and replace’ would be painful. The telcos are just sitting and waiting.

The outcome of the review has already been potentially leaked, suggesting Huawei would be given the greenlight. This leak from the National Security Council led to former-Defence Secretary Gavin Williamson being sacked, though this is not to say the leak is accurate. Last week, the UK hosted US President Donald Trump, and while there was no eureka moment, who knows what was discussed behind closed doors.

The US is sticking by its anti-Huawei position and has even suggested with-holding access to security data from countries who are exposed to the vendor.

That said, there might have been no material conversations held on this topic over the course of the visit. Theresa May is no-longer the political leader of the UK and Trump might have thought it nothing more than a waste of hot-air. This is perhaps one of the biggest issues which the country is facing at the moment; who knows who is going to be leading the Government over the next couple of months.

The Tory party members are going to be choosing the next leader of the Conservative party over the next few weeks, and the tone of 10 Downing Street might change. May seemed to have a much more internationalist approach to politics, though certain candidates are much cosier with the White House. Bookies favourite Boris Johnson is certainly chummier than most with the US President, though others will be in deeper conversations with US delegations than some. This could have an impact on the relationship with China in the long-term, and subsequently, on any decisions made surrounding Huawei.

The consequence of this decision is not only impacting the future of networks in the UK, but also the past. Yes, telcos are reluctant to spend now, but any decision banning Huawei would result in ‘rip and replace’ programmes. Vodafone has already stated it has Huawei equipment on 38% of base stations around the UK and having to replace RAN equipment would set its 5G ambitions back two years. Telcos would also have to consider 4G investments made over the last couple of years.

Although the other telcos have not been as forth-coming with their exposure to Huawei equipment, it would be a fair assumption the vendor’s kit is scattered throughout the network. This is not just a challenge for Vodafone or EE alone, this is an industry-wide worry.

This is not to say the UK would turn into a massive not-spot, but it would have severe implications on the connectivity ambitions of the country.

Some might have expected a decision from the Supply Chain Review in May, but we are still waiting. External factors have perhaps taken priority, the next Prime Minister and the Trump State Visit for example, but that will come as little consolidation for the telcos who are prepping investments.

The UK should not rush this decision, but the longer it leaves the telcos in purgatory the more the country slips behind in the 5G race. Uncertainty is the enemy of telcos and who knows which way this decision will go.