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.

Vodafone balances Indian nightmare with solid numbers elsewhere

The latest numbers from telecoms group Vodafone are a mixed bag, with India casting a shadow over some solid performances elsewhere.

In the UK Vodafone said it had its best ever quarter for new customers, with nearly double the number of mobile contract customers joining in Q3 2019 than in the year-ago quarter. On top of that the prepaid business grew for the first time in a decade and Vodafone managed to steal Virgin’s MVNO business from BT, so not a bad quarter at all for Vodafone UK.

Across the whole group revenue was flat year-on-year, EBITDA was up a bit and operating profit was back in black. As you can see from the table below Europe is pretty stable and Vodafone has upgraded its EBITDA guidance by around a billion euros, thanks mainly to the completion of its Liberty Global acquisition. That has massively increased its debt, however, and any optimism is tempered by Vodafone’s exposure to the dire situation in India.

“I am pleased by the speed at which we are executing on the strategic priorities that we announced this time last year,” said Nick Read, Vodafone Group Chief Executive. “This is reflected in our return to top-line growth in the second quarter, which we expect to build upon in the second half of the year in both Europe and Africa.

“The consistency of our commercial performance has improved in both regions, and we have made a fast start on integrating the acquired Liberty Global businesses, where we see significant long-term opportunity. Our digital transformation is already creating a better experience for our customers, improving our differentiation, supporting growth and at the same time reducing our structural costs.

We have now secured network sharing agreements across most of our major European markets, and we recently announced a major long-term wholesale partnership with Virgin Media in the UK, in order to improve the utilisation of our network assets. And we expect our European TowerCo to be operational by May next year, enabling us to continue to unlock the significant value embedded in our tower infrastructure.”

Amit Pau, former Vodafone Managing Director and currently Chief Operating Officer of Accloud, had this to say. “It has been a year of two halves for Vodafone and their new CEO. Nick had a tough start with the reaction to his dividend cut, but Vodafone has fought back and today sees one of the best set of results from across its peers in 2019 thanks to successes in key markets, including Germany. Vodafone now seems to be operationally stable and gives the impression it’s turned the corner of organic growth.

“But, dig a little deeper, and the top-line results disguise the fact that there has been little innovation, which would drive Vodafone’s long-term growth and expansion. Given the phenomenal levels of innovation in the mobile world, it is strange that it is in decline at the business. A clear example is how they have failed to recognise the vast opportunity that exists in the Indian market. A decision that is likely to prove unwise in time, simply because they are ignoring one of the largest and most diverse mobile economies in the world.”

We don’t know the extent of Vodafone Group’s exposure to the Vodafone Idea joint venture, but it presumably remains a major shareholder and, even if it doesn’t have to cover the Indian government’s cash grab, still has a massive interest in the company’s success. Considering how much debt Vodafone is already in, it’s questionable how much more cash it will be prepared to chuck at the Indian market.

Germany follows the UK on coverage collaboration

Deutsche Telekom will be joining forces with the German bits of Telefónica and Vodafone so they don’t duplicate each other’s efforts in remote locations.

The move seems identical to the initiative announced by UK MNOs a few weeks ago, which resulted in Ofcom removing coverage obligations from the next tranche of low-frequency spectrum to be made available. Presumably the German regulator has indicated it would be in their best interests for the German MNOs to follow suit, although in this case it’s more about satisfying existing coverage oblgations.

Right now, however, this is just a statement of intent rather than a hard pact. “The three telecommunications providers plan to coordinate the set-up and operation of up to 6,000 new cell sites and have signed a letter of intent to this effect,” says the announcement. “1&1 Drillisch AG has been invited to participate in this network expansion collaboration. A prerequisite for joining the collaboration is that the operator must be willing to take on an equal share of the expansion projects as the other parties.”

This seems a bit harsh on Drillisch as it’s currently an MNVO using the Telefónica and Vodafone networks and has far fewer subscribers than any of the MNOs. “The plan proposes that each company participating in the collaboration should set up an equal number of new sites which can then be used by the collaboration partners and fitted with their own antennas and the appropriate network technology as required,” added the announcement.

“The planned collaboration is a milestone for network expansion in Germany,” said Telekom Deutschland’s Managing Director Dirk Wössner. “Our common goal is to eliminate coverage gaps in the mobile network as soon as possible. Sharing infrastructure is nothing new for us. Sharing it at this scale, however, is a major step in the right direction. After all, high-speed internet and excellent voice quality on road, rail and water are vital for an industrial country like Germany that relies on mobile communications.”

“Mobile communications will be the most important technology in the coming decade. And we are pooling our resources to put Germany in an ideal position,” said Markus Haas, CEO of Telefónica Deutschland. “This collaboration is an outstanding example of intelligent cooperation towards taking the next logical step. We must join forces if we are to consolidate Germany’s position as a leading business location that is ready to take on future challenges. Together, we will take digital transformation in Germany to the next level.”

“Today, we are forging an alliance to combat dead spots and increase mobile communications coverage even in areas where it is not profitable,” said Vodafone Deutschland CEO Hannes Ametsreiter. “In future, hundreds of thousands will benefit from this – people in small rural communities, people on roads, people traveling by train. Together, we operators will construct and share a common infrastructure in dead spots – and of course continue to be rivals in a competitive infrastructure market in the rest of the country. This is good for the network, good for customers and good for Germany’s digital future.”

This looks like a good solution for the MNOs so long as they can agree on an equal share of the work. Drillisch announced it wanted to get into the MNO business buy winning some 5G spectrum in the most recent auction, leading to considerable sulking from the incumbents about the cost of it all. It looks like they’re going to make the newcomer pay to get into their little coverage club.

Vodafone extends broadband reach with new Openreach agreement

Vodafone has broadened its fibre footprint to Birmingham, Bristol and Liverpool after signing a new wholesale agreement with Openreach.

The Vodafone business might be primarily known as a mobile business to most, though it has been making strides into the broadband world after signing an agreement with CityFibre last year. What this wholesale agreement with Openreach looks like is an effort by Vodafone to expand its fibre footprint in areas where its primary partner, CityFibre, does not have a presence.

With this wholesale agreement in place, Vodafone will soon be able to offer fibre broadband services in 15 locations throughout the UK.

“Vodafone is committed to a full fibre future and to creating the infrastructure Britain needs to compete and win in the digital era,” said Vodafone UK CEO Nick Jeffery.

“This initiative with Openreach builds on our existing commitments with CityFibre and underlines our belief in the power of digital technology to connect people for a better future and unlock economic growth for the UK.”

As part of the agreement, Vodafone’s Gigafast Broadband service will be available to customers in Birmingham, Bristol and Liverpool on the Fibre-to-the-Premises (FTTP) network from 2021. The first phase of the Openreach rollout is currently underway and the team plans to be able to reach as many as 500,000 customers on this network by mid-2021.

For Vodafone, this is a wholesale agreement which makes sense. The partnership with CityFibre looks to be one where the terms and conditions are very favourable to both parties, however Vodafone will want to be a service provider which can offer broadband to everyone. The CityFibre deployment strategy means secondary partners will have to be sought.

As part of the CityFibre agreement, Vodafone has made a minimum volume-based commitment for 10 years which increases over the period to 20% of the initial one million premises. In return, Vodafone has a period of exclusivity for consumer fibre-to-the-home services from CityFibre for 12 months, though the time-period is nuanced depending on location and the phase of network construction.

The CityFibre deployment strategy is also a point to consider here. CityFibre is targeting small and medium sized cities, as well as larger towns. These are areas which are generally not being targeted by the likes of Openreach or Virgin Media for fibre deployment. The idea is to create a scaled challenger, and targeting areas where rivals aren’t is a perfectly reasonable strategy.

In short, Vodafone will use CityFibre infrastructure as default, and Openreach in locations where it is not available.

For Vodafone, this partnership demonstrates something which many will see as a plus; ambition. The team is seemingly attempting to expand the fibre service offering to more regions across the country, which should add greater confidence in its pursuit of making a meaningful impact on the segment.

Vodafone announces strategic virtue-signalling partnership

Operator group Vodafone will be flogging the Fairphone 3 to its European customers from next year.

As the name implies, the Fairphone aspires to be fairer than other phones. “Fairphone builds a deeper understanding between people and their products, driving conversations about what ‘fair’ really means,” explains the company’s website. Those conversations are apparently still ongoing as we could find no definition of the term on the site other than a regular insistence that it’s something everyone should be striving towards.

Nebulous platitudes aside, the substantial differentiator for Fairphones lies in their ecological credentials. There is an emphasis on renewable materials and sourcing, which presumably means the manufacture and distribution of a Fairphone somehow does less damage to the environment than that of regular phones. But this doesn’t seem to be enough for Fairphone, which has also adopted a broader social agenda. “It’s no secret: we’re out to change the world,” declares the website.

Without, for one second, questioning Vodafone’s commitment to fairness and that sort of thing, its newly-announced partnership with Fairphone does provide some rather convenient, off-the-shelf corporte virtue-signalling. Future Vodafone Group presentations will doubtless be replete with photos of happy, healthy, developing world, rare-earth metal miners and idyllic, unspoilt wildernesses.

“This partnership with Fairphone aligns with Vodafone’s purpose to improve the lives of 1 billion people while halving its environmental impact by 2025,” said the press release. “This commitment by Vodafone includes halving its carbon footprint and purchasing all electricity from renewable sources by 2025, and Vodafone has committed to reuse, resell or recycle 100% of its network waste and help customers extend the lives of the devices they already own.”

“At Vodafone, we’re working hard to build a digital future that works for everyone and this strategic partnership between Vodafone and Fairphone brings together our expertise as Europe’s leading and largest converged technology communications company with the recognised expert in sustainable smartphones,” said Vodafone Group Chief Commercial Operations & Strategy Officer Ahmed Essam.

“Fairphone is showing that there is a market for more ethical phones to inspire the rest of the industry to produce more ethically,” said Fairphone CEO, Eva Gouwens. “Working with a large operator such as Vodafone helps to bring sustainable electronics to the mainstream market and therefore this is one of the strongest signals we can send to the rest of the industry.”

Fairphone seems to have its messaging a bit confused. It’s hard to find fault with its eco aspirations, but conflating those with ill-defined, subjective concepts such as ethics and fairness is at best a distraction. The phone itself charges a premium for all this virtue, which is fair enough (see what we did there?), but we doubt many people will decide they’re virtuous enough to pay it.

Vodafone Business and América Móvil team up to woo IoT customers

The B2B group of Vodafone has entered a partnership agreement with América Móvil to provide IoT operators with international roaming service for things.

The press release does disclose much detail on how Vodafone Business and América Móvil will combine their IoT platforms or share their expertise in IoT connectivity and services with each other, for example if this would involve the two platforms running the same applications or adopting the same protocols. Instead, the statement stays high-level, claiming the partnership between the two companies will “make it easier than ever for customers to connect devices globally.”

“With this agreement we further extend our IoT global footprint by partnering with one of Latin America’s strongest players,” said Vinod Kumar, CEO of Vodafone Business. “América Móvil´s coverage and expertise across Latin America will help us support our global customers in a part of the world where we have seen a surge in IoT adoption.”

“In América Móvil we believe in win-win partnerships that benefit our customers,” added Marco Quatorze, Director of Value Added Service at América Móvil. “We are excited about the partnership with Vodafone Business that provides our joint customers with the best user experience of two leading technology providers.”

Vodafone Business has been actively engaged in improving its IoT offers. The company claimed its IoT platform is connecting 89 million devices worldwide. However, even assuming all these connections on cellular-based, it would still be a small fraction of the global total of 1.0 billion Cellular IoT according to the latest (June 2019) Ericsson Mobility Report.

Therefore, the tie-up with América Móvil may indeed become a win-win partnership. Vodafone Business’ own research has shown that the Americas are the market, and transport and logistics the sectors that IoT has seen the fast growth. These are a natural fit for “roaming service” for things, which would enable tracking, monitoring, and optimising of routes for goods to continue even if the cargo has left the coverage of one operator, and in this case, moving from one continent to another.

For América Móvil, better known for its consumer service (the company says it is connecting 362 million access lines) but also becoming more active in serving business customers, the partnership with Vodafone Business will help it expand the footprint to Vodafone territories in Western and South Europe (in Europe, América Móvil operates in Austria and six Eastern European and Balkan countries). Additionally, it may also enable América Móvil to leverage Vodafone’s technology solutions.

At the beginning of the year, Vodafone Business announced a $550 million joint managed service deal with IBM that also covers 5G, AI, and other advanced technologies. Kone, the Finland-based lift company and existing Vodafone customer, has expressed interest in the IoT capability of that new “joint venture”.

Vodafone and AT&T are proving that partnerships mean prizes in IoT

The IoT world is nothing new in telecommunications, but it’s becoming clear that the players which can negotiate the largest geographical footprints will be in the strongest position to exploit it.

Although there will be plenty of opportunities for IoT potential to be realised in the domestic markets, the big prizes will be realised across international borders. Multi-nationals are the ones with the budgets to invest in this embryonic and largely unproven segment, but to work alongside these companies the telcos will have to prove they have the networks to support the ambition.

Unfortunately, many telcos are limited to their domestic markets. This will make the prospect of partnerships and collaboration all the more important moving forward when offering IoT services.

“Extending our collaboration with AT&T to offer NB-IoT roaming helps our customers to easily deploy their connected devices between the U.S. and Europe,” said Vinod Kumar, CEO of Vodafone Business. “We want to make technology adoption simpler for our customers to help them achieve their business outcomes and by pushing forward the standards and linking up our IoT network with AT&T’s, we’re doing just that.”

“For the IoT to live up to its promise, it must be global,” said Chris Penrose, Senior Vice President of Advanced Mobility and Enterprise Solutions for AT&T. “More and more of our enterprise customers are launching IoT applications across multiple countries. Working with Vodafone we can offer our customers simplified deployments to help scale their IoT plans across the U.S. and Europe.”

Vodafone is arguably in one of the strongest positions worldwide to capitalise on the IoT trends. In terms of the global presence, few can compete with the breadth of Vodafone assets, as you can see from the map below.

The global presence is not necessarily a unique selling point for Vodafone, as any company with ambitions to be a global enterprise services telco will have something similar. Each of the big players in the enterprise services market, including AT&T, will have partnerships in place to emulate this scale, however when these agreements were initially negotiated, we suspect IoT services were not included.

In owning assets in a notable number of markets, Vodafone has a head-start. It does not need to negotiate as many partnerships for global IoT services as its competitors, though it certainly does need to fill in some very notable holes. The US being one of them.

The US is a significant market for anyone involved in the telco world. Vendors will want to supply equipment to some of the largest single networks, while enterprise service telcos will want to tap into the bank accounts of the multi-nationals which fuel the worlds’ largest economy. In partnering with AT&T for NB-IoT as well as LTE-M and other elements, Vodafone has a physical presence in the country it can point to.

The same can be said the other direction also. Although it might be one of the largest telcos worldwide, owned assets at AT&T are limited to the US and Mexico. This is not good enough if you want to be in discussions with multi-national corporations, you need to be able to meet their global ambitions.

Alongside this agreement with Vodafone Business, AT&T has also recently announced partnerships with the three Canadian telcos to expand its presence into the uppermost half of North America.

Partnerships are not the most exciting part of the telecommunications industry, but in the world of IoT where bigger usually means better, they are critical. Those who can most effectively build their presence outside of the assets which are owned by the telco will look like the most attractive IoT enterprise service providers.

Another Vodafone billing fail hits roaming customers

Vodafone UK suffered yet another billing-related PR disaster as some of its customers piled up huge charges while roaming and were consequently disconnected.

The incidents took place over the weekend, just in time to make it onto mainstream media grateful for something to report on a Monday morning. One of the first Vodafone customers to flag the matter up on Twitter was David Maddison, whose trip to Malta was compromised by him suddenly being hit with five grand in charges that he wasn’t expecting.

After a few hours Vodafone tweeted that it was aware of the problem and promised customers would not be incorrectly billed. This was apparently insufficient for Andy Pearch, also travelling in Malta, who was seriously stressing out about being incorrectly billed. He was eventually placated by Vodafone, but remained unimpressed by the speed with which the problem was addressed.

“We are very sorry that yesterday, some customers could not use data or calling services when roaming abroad,” said Vodafone’s emailed statement. “This was due to a technical error, which we have now fixed. Any affected customer should restart their phone to ensure that services are resumed.

“As a result of the issue, some customers are receiving billing messages in error; we are working through these as an urgent priority and removing any errors from customer accounts. Customers will not be charged and do not need to worry about contacting us as we are proactively checking accounts and fixing any issues.”

Vodafone also explained that The spending limit cap was inadvertently triggered by a software change, which must have brought back bad memories of is major BSS fail three years ago. It added that it affected around 40,000 customers, but it’s now fixed. Hopefully for Vodafone this was an isolated glitch, and it’s bad luck that it happened on a Friday, but it still represents another setback for a company that has historically been criticised for its customer service.

Vodafone searches for supply chain rejig through OpenRAN

Vodafone has announced it will introduce OpenRAN technology in various parts of its UK network, as well as the Democratic Republic of Congo (DRC) and Mozambique.

In what appears to be an effort to break down barriers to work with new vendors, Vodafone will seek to empower the ecosystem through the introduction of commoditised hardware. This is the first trial of the technology in a ‘developed’ market, leaning on trials which have taken place in Turkey and South Africa.

“We are pleased with trials of OpenRAN and are ready to fast track it into Europe as we seek to actively expand our vendor ecosystem,” said Vodafone CEO Nick Read.

“OpenRAN improves the network economics enabling us to reach more people in rural communities and that supports our goal to build digital societies in which no-one is left behind.”

Launched through the Telecom Infra Project (TIP), the OpenRAN initiative aims to build 2G, 3G and 4G RAN solutions based on a general-purpose vendor-neutral hardware and software-defined technology. With vendor-neutral hardware hitting the networks, the aim is to reduce reliance on a small number of vendors, de-couple the hardware and software components of the network more stringently and reduce the vast expenditure made on network infrastructure.

The UK trial will focus on rural locations, perhaps to reduce the exposure of failure. These are also the cell sites which will cost the most and offer the smallest profits. There is a lot to gain here, while the consequence of failure will be limited.

“Encouraging the emergence of new suppliers would give operators greater choice in a far healthier ecosystem,” said Kester Mann of CCS Insight. “Disrupting the status quo could, in particular, make the economics of network deployment stack up in rural areas or hard-to-reach locations, for which roll-out may not currently be viable or cost effective.

“Improving network economics and better monetising infrastructure assets is an important focus of Vodafone CEO Nick Read as the company seeks to achieve ambitious cost-saving targets.”

Like many of the worlds’ telcos, Vodafone is slowing stumbling towards a tricky situation with its supply chain, though many of the issues are outside the control of the company. With Huawei under increasing pressure, the future does look glum for a segment of the ecosystem which is already under-populated.

However, the telcos are not completely blameless in this situation. Investments have been concentrated with the three major vendors in this space (Huawei, Ericsson and Nokia). Through prioritising these companies as primary vendors, challengers have not been given the opportunity to scale and compete. Another complaint levelled at the telcos has been a comprehensive and convoluted procurement process, which has inhibited the ability of smaller players to compete against the status quo.

When the industry is running smoothly, few would have complained with the concentration of investment to a small number of vendors, but there are wrenches being thrown into the works all over the place.

With Huawei potentially facing bans in numerous countries and its supply chain being compromised thanks to the entry onto the US Entity List, a major vendor is under threat. Although Huawei has confirmed it is producing products free of US components, the performance of this equipment is unknown for the moment. Worst-case scenario, the vendor community could become a lot smaller.

Vodafone is one company which does look to be exposed to the Huawei conundrum. UK CTO Scott Petty has said banning Huawei would set the company back two years in its quest for 5G, costing millions as the company would be forced to strip the vendors equipment out of its network. Huawei equipment currently accounts for 32% of the 18,000 base stations around the country, though it has plans to strip Nokia equipment out, with Ericsson taking the rest.

Only working with two suppliers is a precarious situation, though this is compounded when you look at the difficulties Huawei is facing. The introduction of OpenRAN might be considered a bold move, but it is starting to look very necessary to enable access to more vendors.

The trials in the UK, DRC and Mozambique will focus on mobile calls and data services across 2G, 3G and 4G, with 5G possible over OpenRAN in the future. OpenRAN could be debuted elsewhere across Europe dependent on the success of the trials in the UK.

The team have currently identified 100+ rural locations to trial the technology, though this could be expanded in the future. Vodafone has said OpenRAN could reduce network hardware costs by up to a third, but this is dependent on how the technology and supplier ecosystem develops over time. Mavenir, Parallell Wireless and Lime Microsystems are three new suppliers enabled by the trials, though there are a huge number of start-ups who are connected to TIP.

Although this is a small trial for the moment, it is certainly one worth keeping an eye on. Vodafone is in a slightly tricky position when it comes to its supply chain, though should OpenRAN prove to be successful, numerous options could be opened-up. It is a low risk gamble, though the gains of a new supply chain certainly outweigh the consequence of failure.