5G Networks are rolling out. They offer unparalleled opportunities to enhance the connectivity we already rely upon (more so in the wake of COVID-19 than ever before) and to open new avenues in healthcare, distance working, AgriTech and a myriad of as of yet unconsidered opportunities. Reports from 2017 suggest that just a 10% increase in mobile broadband penetration could increase UK GDP by 0.6% – 2.8% and a report from O2 suggest that 5G infrastructure will contribute £7 billion a year in direct measures alone. The upside potential for UK PLCS is vast, but there are significant barriers to the deployment of 5G networks outside the super urban areas that make the business case harder.
Underlying these problems is the high frequency required for 5G throughput (at least in the mobile, not Fixed Wireless Access deployments most people understand 5G to be). These high-frequencies have short reach and poor penetration to man-made objects like buildings, and so the density of cell and micro-cell sites will be far greater than that we’ve seen before. They will be dependant on ‘deep’ fibre connectivity.
To deliver on coverage promises and objectives the deployment of 5G has five primary hurdles it will have to overcome:
- Connectivity between the millions of new cell sites needed;
- Ultra-high-resolution mapping data and sophisticated planning tools;
- Gaining secured access to sites (wayleaves);
- Spectrum; and
- Deployment capital.
All of the above are capital intensive. Outside of the super urban areas, where population and demand density (alongside spectrum challenges) skew the economics, the cost of every provider building it’s own 5G network will be unnecessarily high, and in the more rural areas prohibitively so. Not only will this delay delivery to areas that could benefit from the technology the most, but the extreme capital demands will eliminate the opportunity for further competition in the market space. Network sharing agreements among the current MNOs will help, but they will lack the agility needed to deliver this new type of network.
Technology, however, is not a barrier. 5G sites are being actively deployed and tested with vigour across the world and solutions are readily available to the market now.
With the exception of the mapping and planning solutions (of which a myriad of impressive options are entering the market place), fibre network providers are well placed to address these problems. With significant capital being committed in the mainstream (Openreach and Liberty Global) and Altnet fibre space, and a real need to increase the shorter term demand side for fibre products to keep driving build, fibre network builders have both the appetite and ability to fuel faster 5G deployment.
Breaking the integrated convention
The truly integrated MNO convention is already dropping away as capacity demand outstrips the networks own supply abilities. The underlying connectivity mobile networks rely on is already largely provided by the wholesale market, as the recent Virgin Media / Three UK announcement highlights.
Already we are seeing neutral-host capable networks emerging as trials with the support of DCMS’s “5G Testbeds & Trials Program”. But the build quality of these need to improve for the MNOs to be able to rely on them. Coverage and service levels are key in this market. The reliance on FWA must drop and the ability to scale these networks to a higher coverage level must grow. But it is a good base from which to develop and one that is within the reach of the more established fibre network builders.
Completion in the broadband market is high (at least at a service provider level) because the barriers to entry are low. New ‘local’ networks with geographical boundaries pop up every month. There are a plethora of points to interconnect and even more middle-men to help do so. But in the mobile market, this isn’t the case.
There are a few ‘virtual’ networks (giffgaff, Tesco Mobile and Virgin Media) but these require significant volume and large capital commitments to get off the ground. By building carrier-neutral networks, and allowing smaller operators to run them, the market place will open up. These smaller providers will be agile, hungry to steal market share and innovative in models allowing new providers to do so. They will be better placed to enable the edge computing ultra-low latency connectivity allows.
This does not need to be a single shared network (Australia’s poor state broadband network is testimony as to why this option might not work). An actively adopted wholesale market, where providers have clear standards and methodologies to conform to, will deliver 5G networks faster, at a lower cost and in a way that enables competition.
By facilitating these smaller neutral-host networks and reducing the reliance on network sharing by the established players you will prevent the slow and underfunded deployments we’ve seen in 4G and even 2G networks to date. There will still be the need for these deployments, and likely with state funding, in the very rural areas but the need will be less so and the competition will cause the MNOs to sharpen their game.
Where is the regulator?
To deliver on any of this we need a strong regulator. Ofcom needs to become the driving force behind these concepts. It needs to stop focusing on a small selection of high-level metrics and engage with the larger market to drive long-term change (to the benefit of the consumer). They need to help the market agree and define standards, SLAs and access agreements that the current MNOs can get behind.
A market of four is hardly competitive when compared to the fixed broadband space. The four need to be compelled to deliver faster or adopt these methods. Spectrum licensing needs to be revised and must move away from the draconian, revenue-raising approach, currently adopted. The upside impact for UK PLCS of doing so would be enormous.