Mobile phones have come a long way since the 2G days of plain voice and txtspk. Two successive generations of technology have revolutionised the way we interact with our phones, with content and with the world around us. However, as the dawn of 5G breaks first light on the horizon, it seems this next generation will create the biggest changes of all. There’s only one problem – no one is really sure what those changes will be. What we know – the spectrum requirements, basic infrastructure needs and possibilities, is balanced by a huge number of unknowns – how it will be delivered, what consumer take-up will be and who will emerge from the 5G evolution at the top of the pile. For infrastructure owners, the need to deploy capex in order to capitalize on this wealth of opportunity is clear. However, information about the exact way to maximize that expenditure is thin on the ground. We spoke to Nicolas Ott, MD of Arqiva’s telecoms business, about how he sees 5G playing out.
TowerXchange: What is Arqiva’s understanding of 5G, what will it look like and when will it be rolled out in the Europe?
Nicolas Ott, Managing Director, Telecoms and M2M, Arqiva:
There is currently a lot of work being done in Europe, Asia and the USA in regards to 5G, although it seems a lot of companies are going for a later timetable than was initially anticipated. We will see 4.5G or 4.9G rolled out probably around 2019/2020 (or maybe 2018 for ambitious MNOs) and then from 2020 to 2024 there’ll be a significant take up of full 5G. In terms of how big of a change it will be for the existing mobile networks, no-one can really be sure for the time being but the equipment makers are investing a lot of energy in this and some MNOs are responding very positively - even if other MNOs would have preferred more time.
There’s a lot being said about 5G right now – ultrafast broadband, one millisecond latency, fixed wireless access, internet of things. It’s being heralded as the mother of all solutions but it’s unlikely that all of these promises will be delivered. However of those promises you can be almost certain that ultrafast mobile broadband and probably improved latency will.
With ultrafast wireless broadband you still need a lot of spectrum. In the recent past the focus was on low frequency spectrum bands; 5G will need very high frequency bands, the radius around macro and small cells will shrink dramatically, therefore densification of small cells will potentially be massive.
We see two types of evolution: in rural areas we’ll see a macro site densification – so will decommissioning stop? Will we go back to densification of sites? Is 5G capable of being a turning point in the tower industry? This all depends on the technology.
When you go into a dense urban area, it’s an opportunity for small cells or micro cells. The radius for a small cell is typically around 250 metres so when you look at the example of London you might need as many as 500,000 small cells. The only company currently rolling out small cells in London is Arqiva; whilst I’m not able to give you the exact amount of small cells that need to be added, what I can tell you is that it us a big jump from current figures; It’s a very interesting opportunity.
The radius for a small cell is typically around 250 metres so when you look at the example of London you might need as many as 500,000 small cells
A vision could be that every lamppost in urban areas will have a small cell and be connected to fibre in five to seven years if this rolls out as we expect. If 5G is mostly delivered by high-frequency spectrum bands, the indoor coverage will be interrupted so indoor systems will be even more important. Indoor DAS has benefits for landlords, operators and towercos, so an elegant resolution needs to be found to the debate around who pays in order to achieve effective mass roll out.
You could almost use the word revolution to describe what 5G might allow vs. 4G. It will be transformational and you’ll see a wider divide between the winners and the losers after it’s happened. As a towerco we see it as a great opportunity and we’re very excited about it. We’re working with Ofcom in the UK to explain the positive implications of 5G as the government needs to take bold decisions now to allow 5G to flourish in future. With Brexit the mobile networks will be critical in deciding what kind of country we want to live in – it will be a huge contributor to wealth.
TowerXchange: Do you feel the 5G rollout will be driven more by commercial or governmental impetus?
Nicolas Ott, Managing Director, Telecoms and M2M, Arqiva:
We’ll need 5G in both rural areas and urban high density areas. I don’t think we can allow a massive digital divide to take place. 5G is going to revolutionise the way that we communicate and do business and it is not acceptable from a political standpoint to exclude the rural population from this. The pressure put on MPs when there is not sufficient mobile coverage in their constituency is already enormous. Also from an operator’s marketing point of view you’ll also need to rollout in semi-urban areas, at least to differentiate from competitors. Think about one of the applications that 5G is expected to help deliver, the driverless car – you won’t want to switch it off when you get outside of the M25. So we believe that a successful 5G roll-out requires a combination of both Government “will” and commercial ambition.
TowerXchange: How does the structure of the industry need to change in order to facilitate 5G rollout?
Nicolas Ott, Managing Director, Telecoms and M2M, Arqiva:
The regulator must take another look at further consolidation; some of the MNOs may not have the ability to invest in 5G otherwise and as such, the rural areas in that country would suffer. Which countries will fail and which will succeed also depends on their ability to provide 5G in rural areas. If consolidation is necessary to achieve this then it must be considered.
Duplicating sets of towers in rural areas is counterproductive. We need to create an economically compelling solution to densify in rural areas and reduce, if not eliminate, duplicated passive infrastructure.
TowerXchange: With a potentially huge shift in the way communications are run, do you envisage new players entering the market and how will relationships change between towercos, operators and other stakeholders?
Nicolas Ott, Managing Director, Telecoms and M2M, Arqiva:
Things will change a lot. For example, some big international mobile groups are considering buying film studios to have access to their own content, the OTT players are taking an ever more important role in the value chain and the car industry is starting to be influenced by Apple or Google for driverless cars. It’s very hard to assess who will be the winners or the losers, but you can see the internet players are changing, the battle for premium content is raging more than ever while at same time many are struggling with returns on capital employed.
More consolidation will take place, horizontally as well as vertically. In Europe we’re just not seeing the big groups like you do in US or Asia. To be honest I don’t know if that’s a risk or opportunity but there’s a growing polarisation between big and small players. But yes, the relationships between towercos, MNOs and stakeholders will change, at least as a consequence of all the other changes that will take place.
TowerXchange: Can you tell us a little more about 5G Fixed Wireless Access and how it could be rolled out on a larger scale?
Nicolas Ott, Managing Director, Telecoms and M2M, Arqiva:
A good example is to look at Verizon that has publicised that they will trial 28GHz with 5G for fixed wireless access. It appears that they are considering two trials; one in an urban setting and one in a rural area.
The company wishes to retire their copper network and replace it with fibre and the argument is that in many cases for the last few hundred metres you may be better off using a 28GHz fixed wireless broadband access rather than laying fibre. I say ‘may’ as it’s very early days. If it was to be successful however, it could have very useful applications. In the UK, for example, the government is investing a lot in rolling out fibre to rural areas; 28GHz might provide an extra lever to provide 5G to the countryside. It is probably not the whole answer but it certainly could be a part of the solution.
We are using that spectrum today for small cell backhaul and we’re studying what Verizon are saying. Considering the current speed of broadband in the UK it’s very compelling.
TowerXchange: To what extent do you think future/5G contingencies are affecting operators’ network planning strategies right now, and are they doing enough?
Nicolas Ott, Managing Director, Telecoms and M2M, Arqiva:
We have to acknowledge that all the MNOs are still investing a lot of time and resources in finalising their 4G rollouts; It’s normal and right for them to do this. I’m pretty sure 5G is on their agenda but 4G rollout is on the top of the pile. The mobile industry works in cycles so as they come to the end they need to start thinking about what’s the next technology they need to consider. The time between 4G and 5G is smaller than it was between 3G and 4G, though, so there is acceleration going on. They’re starting to think hard about what it means in terms of customer experience and what they need in terms of network. What does 1 millisecond of latency mean from a customer point of view? People are talking about it being used for surgery – if I was going to have remote surgery I’d rather prefer it was done through fibre than a mobile network. You have to start with your customers; it’s a bit of a catch 22 but over the next few years we’ll see what that looks like. Some will do early trials which will be very telling. MNOs also can’t predict what the equipment will do. There won’t be answers for at least a couple of years.
The crucial point however is whether, in the end, the MNOs can monetise 5G. If they can’t, there’ll be a huge wave of investment with no additional revenues. 5G needs to be monetised and the answer to that question will dramatically affect what MNOs can do. Would customers pay £5 more a month for the ‘wow’ factor? The answer to that question will determine how 5G rolls out almost as much as network or technology.
Meet Nicolas and hear more about his views on 5G rollout, as well as from experts on the subject from Cellnex, INWIT, WIG and many more, as part of the ’Future Networks’ discussions at Meetup Europe on April 4-5 2017
