Although this article is necessarily UK-focused in that it is a response to a publication addressing UK telecoms infrastructure, there’s also plenty to think about here that is applicable to other markets.
Johnson raises several talking points, many of which counter current industry orthodoxy:
– mobile network operators will not necessarily be critical to the success of 5G rollouts,
– a focus on easier site deployment may not solve the real coverage issues countries need to solve,
– flexible licensing is welcome but more can be done quicker,
– MNOs should have USOs,
– spectrum should not be ring-fenced from flexible deployment and co-investment business model initiatives.
The article begins below… >>>
Recently the UK Government published its Future Telecoms Infrastructure Review. Paradoxically, given that most telecoms is now consumed wirelessly, at least half of the document was focused on the fixed infrastructure, specifically fibre. And a good proportion of that was concerned with dislodging Openreach from its practical monopoly on last mile infrastructure. It’s true that the migration to fibre and open access to the last mile has to happen, but what did it have to say about cellular?
Actually, the review picked up on quite a lot, though it didn’t expand on very much. We were encouraged by the number of topics the authors touched on that signalled a shift in ecosystem away from the Mobile Network Operator, Exclusively Licensed Spectrum oligopoly that dominates today. Or did they? Let’s pick on a few.
“… clear that the national mobile operators will be central to the successful delivery of 5G”
Why is that? The national mobile operators today are stuck with a cost driven consumer led business. Everyone agrees that wide-area consumer demand expansion can be easily met from 4G technology. The real drivers behind 5G growth are most likely B2B rather than B2C, and the existing national mobile operators have shown themselves unable to serve that market with any value many times over.
The successful delivery of 5G will actually come from many of the other factors mentioned in the report.
“Make it easier and cheaper to deploy mobile infrastructure”
The report devotes a whole section to this, and yet it’s mostly about solving yesterday’s problems with site planning and permissions. Let’s make it easier to build towers.
This would be fine if the objective were to provide the seamless ubiquitous geographic coverage that is so conspicuously missing in the UK. My sense is that this will be used for city centre densification, not where it’s needed.
The report trumpets in several places that the UK boasts “87% geographic 4G coverage from at least one operator” as if that were more than a reasonable start. If you’re going to continue with the oligopoly as the mainstay of cellular service in the UK, what’s needed is to force them to fill in the gaps, to provide continuous highway coverage as a good starting point and follow it up with complete enterprise and rural coverage.
New cell sites outdoors are not needed for urban densification. It’s going to come from indoors and probably from private network models – not the oligopoly. This whole section misses the point.
On the other hand, these outdoor cell site barrier busting measures in this section will go some way to helping the national mobile operators complete their 4G network deployments. If we want to call that 5G, that’s fine by me.
Flexible Spectrum Licensing
Hallelujah! This also appears in several places and is one of the ideas that will make a real difference to 5G deployment. “Spectrum sharing models could enable new players, alongside existing mobile operators, to access spectrum and invest in new business models.” Exactly
The report doesn’t mention CBRS by name, but it does include Dynamic Spectrum Access (DSA) as a thing. It’s clear that the multi-billion dollar eco-system lining up behind CBRS (or OnGo as it’s now called) in the US will be ready to exploit the availability of DSA spectrum in the UK. It’s a shame that DSA was not discussed in the recent Band 42 auction in the UK because that would enable the immediately deployment of CBRS infrastructure into a segment of that band immediately. We can only hope that DSA is part of any upcoming Band 43 auction.
The report also directs Ofcom to “provide clarity that leasing of mobile spectrum is not prohibited”. We see this as a highly positive move also, though we would also like clarity to understand who may be a leaseholder of licensed spectrum. Leasing spectrum to a Neutral Host would be a fantastic way to enable new players to serve underserved markets in enterprise and rural coverage. Is that what the FTIR is saying? We hope so.
USO for fibre. Great, but what about mobile?
The report spends a significant proportion of its time talking about full fibre roll-out, and touches on the idea of extending the existing broadband USO to encourage it. The USO as it stands today gives a right to 10Mbps downlink/1Mbps uplink. We can’t help asking, why is there no corresponding USO for mobile access?
Flexibility for firms to develop new approaches
The report talks about co-investment, risk sharing, and about operators sharing parts of their networks. It discusses periods of exclusivity in return for the co-investment. This would all be so much motherhood and apple pie, if it weren’t for “arrangements involving operators with significant market power”. The EECC, though, has provision to incentivise such operators to co-invest. Thank heavens for Europe, eh? Oh, wait.
Are we allowed to share everything, except the spectrum? Why is that? There’s no longer any technical reason.
But all this so far is in the context of fibre. Why does the discussion stop when it comes to mobile? Are we stuck with the old chestnut of exclusively licensed spectrum? It doesn’t say so, but it seems to be the case. Are we allowed to share everything, except the spectrum? Why is that? There’s no longer any technical reason.
Mobile Operators no longer really compete on quality of coverage. They are generally forced into network investment by regulation and to some extent by customer complaints. They can no longer invest for growth as such, since, from a consumer point-of-view, there’s little growth to be had. They compete on quality of service, on the price of handsets, on the price of the bundle, on the packaging of OTT plays. The spectrum should still be licensed and access to it controlled, because the one thing that differentiates the mobile operators from everyone else is the quality of the spectrum they use. But that quality is now guaranteed by the 4G-LTE technology in use, and will be further guaranteed in 5G.
The FCC calls it “licensed-by-rule”. Licensed-by-rule infrastructure (like CBRS infrastructure) can be legally switched on and operated anywhere so long as it conforms to “the rule”. It’s like the green sticker you used to see on fixed handsets. If it had one, no-one could prevent you plugging it in and getting service. The same should be true of 5G network infrastructure. The financial health, flexibility and customer responsiveness of the next generation of mobile service depends on the “flexibility for firms to develop new approaches” like this.
In picking some highlights from the report to comment on, the thing I’m left with is the disparity of treatment between fixed and mobile. I’m hoping that this report follows the well-established Pareto rule of predictions, that 20% of its content has 80% of the value. If the 20% of the report that talks about new business models, dynamic spectrum sharing, flexible spectrum licensing and so on, comes true, it will have done its job. Let’s hope also that all the good ideas regarding fixed infrastructure, like the USO, co-investment and network sharing, get carried over inexorably into the mobile space. Then we’ll have a Future Telecoms Infrastructure we can be proud of.
Postscript – about the title
In English and lots of other languages, we talk about going forward into the future. Sometimes we talk about facing the future with our eyes wide open, as if that were any help. But somewhere in the world, I’m told, there are languages where this is reversed. In these languages we walk backwards into an unseeable future, our eyes looking backwards into a clearly defined past. Isn’t that so much more sensible? And this is strangely resonant with the title of the government’s publication.
The “Future Telecoms Infrastructure Review” is reviewing the past to find the clues to the future that it wants but cannot see.