5G Not a Guaranteed "Winner" For All Mobile Operators

To a greater degree than has been the case in the past, 5G success will be uneven: offering bigger potential financial rewards to the bigger service providers and possibly even some financial distress for smaller operators.

The reason is that smaller operators will be able to monetize access services, while the larger operators might (should) be able to leverage applications and services built on 5G connectivity. The analogy is video entertainment services, which have proven a positive revenue source for the biggest operators, while being a money-lower for most small providers.

“One of the most important politicians in the EU told me that it looks like 5G will drive tremendous growth in mobile companies' revenue, and he could not understand the complaints from mobile operators around Europe,” said telecom analyst John Strand. “He simply assumes that mobile operators will automatically make money with a new mobile standard, even though that was not the case when they rolled out 3G and 4G.”

To some extent, managerial prowess and ability to foster and leverage innovation might also matter, as the applications and services part of the internet of things, enabled by 5G, will be created--willed into being--not simply harvested. Not every country or region will be equally situated, in that regard.

Keep in mind our history with 3G and 4G, both of which were supposed to unleash waves of innovation leading to valuable new services and revenue streams. That expectation lead to overbidding for spectrum in India and Europe, where operators also overpaid for 3G spectrum.

As it turned out, 3G eventually lead to mobile email and then mobile internet access as new apps that drove revenue, but might have had less upside than expected.

Bidders were more restrained in bidding for 4G spectrum, but the notion remained that a faster network, with lower latency, would drive creation of new apps. Early on, tethering emerged as a new driver of behavior, 4G being a much-more-effective platform for use of mobiles for browsing and app use.  At the moment video entertainment consumption also is joining those earlier apps as hallmarks of 4G as an enabler of new use modes, behaviors and apps.

In a similar way, 5G is seen as enabling a new wave of applications, services, revenues and user behaviors, partly by humans but mostly by machines. The extent to which that happens remains a big question. But it is safe to say that it mostly will be the bigger operators, with bigger internal markets and assets, that will benefit most, because they will be able to participate not only in the “access” demand, but also be owners of the applications and services enabled by the access.

Where Will Telcos Find Roles in Connected, Autonomous Vehicle Ecosystem?

What are the opportunities for telecom companies in the new mobility ecosystem based on connected and autonomous vehicles? Much could hinge on how successful access providers are in creating new roles in the applications and services portions of the ecosystem (either by organic growth or, or more likely, acquisition).

Almost nothing is certain about internet of things, much less the roles internet access providers will play in the ecosystem. That some amount--perhaps a significant amount--of incremental access revenue will result is a given.

In connected cars, passengers will likely continue to rely on mobile connections or car entertainment systems (or both) to stream content and access information. But the bigger opportunity lies in owning the infotainment and navigation services, which could reach about $40 billion in revenue globally in 2020.

Some are optimistic, arguing that telecom companies are well positioned--beyond connectivity--to leverage billing, payments, analytics for planning and optimization, and asset management services. Of course, we have heard that argument many times before, and not so much has actually happened.

Fleet management services, including automated fleet scheduling, dispatching, and tracking as well as assisting in managing the rapid anticipated growth of autonomous fleets, also is seen as an area communications providers might supply.

If that seems unlikely, consider the way other access suppliers (such as cable TV companies) now own content assets and the networks to deliver content; own telematics services or home security operations.

Much could hinge on the way new IoT systems develop. In the autonomous vehicles space, for example, it might make a great deal of difference whether core functions are self-contained in each vehicle or rely on vehicle-to-vehicle and vehicle-to-infrastructure communications. That could affect the size of the communications services opportunity.

Deloitte’s analysis has found that the breadth of future mobility use cases requiring connectivity is expected to generate data traffic of roughly 0.6 exabytes every month by 2020—about nine percent of total US wireless data traffic.

Deloitte also estimates that data traffic associated with mobility and transportation could grow to 9.4 exabytes every month by 2030.

But leaders at the biggest tier-one providers might also hope to assume additional roles in the content and applications portions of the ecosystem.

source: Deloitte University Press

Shared Spectrum Role to Grow

Shared spectrum is likely to be used in several ways in the U..S. market first to support 4G, and then likely in more-intensive forms as 5G is introduced.

Among the U.S. bands where spectrum sharing will be key is about 500 MHz of capacity in the Wi-Fi 5-GHz band, as well as about 150 MHz in the 3.5-GHz Citizens Broadband Radio Service (CBRS) band. In Europe, the 2.3-GHz band will be where shared spectrum first is tried.

Spectrum sharing also is expected around  the 60-GHz band, where  7 GHz is available for sharing in the frequency ranges between 57 GHz and 64 GHz, and where an additional 7 GHz of capacity is being considered for shared use.

Spectrum sharing also is being evaluated in the licensed 71 GHz to 76 GHz band and 81 GHz to 86 GHz bands which have in the past been used for point-to-point radio links.

source: Heavy Reading

Openreach War Ends, Now Market Decides

The war over Openreach (functional or structural separation) is over. BT and Ofcom have reached agreement on a long-term regulatory settlement that will see Openreach become a distinct, legally separate company with its own board, within the BT Group.

In a sense, the disagreements have centered less on the “wholesale” approach (that was never in question) but only on the amount of possible favoritism Openreach might show to BT, compared to all the other wholesale customers. The new arrangement loosens, but does not break, the ties between Openreach and BT. Openreach is an independent company within the BT Group.

To the extent that facilities-based fixed network competition exists or expands, it will come from cable TV companies who rely on their own networks, using different technology standards. Longer term, facilities-based competition will come from mobile networks (5G in fixed mode) and possible other platforms. In fact, mobile substitution already seems to be growing.

Beyond that, we still do not know the extent to which other platforms will prove to have scale (power line, balloons, satellites in low-earth orbit, drones, Wi-Fi). As Openreach starts to build more fiber-to-home facilities, it is likely the shares of “fastest” access will change. Up to this point, cable operators have supplied a disproportionate share of such lines.

That has been true in the U.S. market as well, which chose to rely on facilities-based competition rather than wholesale.

source: ISP Review

Fiber-to-home will be important if Openreach has to compete head to head with cable networks, which already have technology to reach gigabit speeds without plant upgrades, and have suppliers working to boost speeds into the 10 Gbps range with plant modifications.

Distance to cabinet (metres)	Estimated downstream connection speed	Estimated upstream connection speed	Cumulative %'age of premises at this distance
100m	100 Mbps	25 Mbps	5%
150m	80 Mbps	20 Mbps	10%
200m	65 Mbps	18 Mbps	20%
300m	45 Mbps	17 Mbps	30%
400m	42 Mbps	16 Mbps	45%
500m	38 Mbps	15 Mbps	60%
600m	35 Mbps	14 Mbps	70%
700m	32 Mbps	11 Mbps	75%
800m	28 Mbps	10 Mbps	80%
900m	2 5 Mbps	9 Mbps	85%
1000m	24 Mbps	8 Mbps	90%
1250m	17 Mbps	5 Mbps	95%
1500m	15 Mbps	4 Mbps	98%

source: Thinkbroadband

5G Will Drive Edge Computing

Though 5G often is considered the next mobile air interface, it also is enabled by core network virtualization and even could play a part in boosting edge computing, as mobile networks are used to support many new internet of things applications.

For example, today’s service providers have cloud computing requirements to support their own network services with 100 milliseconds of latency, a maximum of 10 megabits per second of throughput, and no more than 10 billion devices that cost up to $1,000 each and with a battery life of one day, according to Said Berrahil, Nokia VP.

For tomorrow’s network, the telco cloud requirements might need latency of no more than one millisecond, support network speeds in excess of 10 gigabits per second, and host up to one trillion devices that cost $1 each, said Berrahil.

A cloud data center can meet the 100-millisecond latency up to 10,000 kilometers distant from any end user.

When latency must be four milliseconds, the cloud data center needs to be no more than 30 kilometers (18.6 miles) away, while services in need of latency less than one millisecond would require edge data center deployments “almost within eyesight.”

Fixed Wireless Spectrum to Get U.K. Boost

Spectrum expected to be used in the United Kingdom to support 5G networks includes spectrum from 694 MHz to 790 MHz; 3.8 GHz to 4.2 GHz range,  3.4 GHz to 3.8 GHz; 24.25 GHz to 27.5 GHz. Other possible bands above 30 GHz include 32 GHz, 40 GHz and 66 GHz.

Some of that spectrum will be available relatively soon, including spectrum below 4 GHz for mobile applications, and below 9 GHz for backhaul, Wi-Fi and fixed wireless purposes.

Which Parts of Ecosystem Will 5G Disrupt?

The 5G network should prove disruptive to participants in other parts of the ecosystem, as well as to new ecosystems. That arguably has been the case in the past, so we should be watching for what happens, to whom, and where.

The first generation of mobile created alternatives to fixed phone lines, triggering the huge mobile substitution trend that has decimated use of fixed voice services.

The 2G network created the text messaging business and also demolished the paging business.

The 3G network enabled mobile email and then mobile internet. Most likely would agree that 4G enabled tethering of PCs and other devices, plus video consumption and smartphones with pleasant user experience when accessing cloud data.

But 4G also largely displaced MP3 players and pocket cameras.   

It would be unusual indeed if the coming 5G network did not cannibalize some existing communications functions and roles; industry segments or participants.

Some will point to fixed internet access as a potential early casualty, as the mobile network--operating in fixed mode--could compete head to head with fixed services for the first time on a massive scale. Up to this point, some percentage of consumers already has learned to substitute mobile access for fixed access.

But that has been a limited phenomenon, generally favored by mobile-only users who do not watch much video. The 5G network might change all that. In fact, even unlimited mobile data, or exempting streaming video from usage charges, might already be creating such habits.

The 5G network should be different than prior mobile generations for many reasons. It should become the first generation of mobile networks to enable use by machines, sensors and servers, rather than humans. Faster and lower-latency mobile broadband will be a feature humans will notice, to be sure.

But the primary new categories of usage is expected to be by sensor networks of various types whose requirements are not so much bandwidth as low latency or low cost.

Also, 5G should be the first mobile network that integrates multiple networks, organically, for access (licensed and unlicensed; owned and third party assets). In other words, 5G will be more virtualized than prior generations.