Across Europe, local government is struggling to find the ‘right’ way to work with MNOs, ISPs, fibrecos, towercos and other neutral host providers to facilitate access to street furniture in a way which is both practical and cost effective. In the UK, the ‘concession’ model (where a council appoints a third party to manage and facilitate access to infrastructure) has been used in high priority areas with varying success, and BT has recently called for a switch to an ‘open access’ model, where each player will deal with the local council directly. In our latest interview, Antony Tomlinson, CEO of the entrepreneurial UK start up ONTIX, argues that the concession model is a best fit for urban areas, and talks us through his rationale.
TowerXchange: Please introduce Ontix, your background and footprint.
Antony Tomlinson, CEO, Ontix:
Ontix is a new kind of wholesale infrastructure provider, providing the next generation infrastructure that wireless operators need as they deploy their network at street level.
We provide our network as a service, over shared infrastructure, so we can make it quicker, easier and cheaper for these operators to add network. In terms of what’s unique about what we do, we build our own, high spec transmission network using a hybrid fibre and microwave architecture; we build shareable infrastructure which supports different operators and different technologies; we provide an end-to-end service, including a high capacity transmission connection (in short: the operator tells us where, we do the rest). Because our fibre is deployed in advance and the infrastructure is shared we can deliver on short lead times and keep the cost per operator down. Unlike many partners rolling out small cells today, we also offer a fixed price with no hidden extras.
Although we’re a new company we have 18 months of successful trading under our belts and the team are vastly experienced. A few of us came from CTIL (now Cornerstone) where we led their successful bid for the concession in the City of London and before that we worked for MNOs and OEMs. A lot of our experience comes from working on the customer side.
In terms of our footprint we are building out now in Westminster and Bexley (a London suburb), where we have concessions that give us the exclusive rights to use thousands of council-owned street furniture assets. We are keen to build up our portfolio and are looking at a number of opportunities up and down the country.
TowerXchange: It’s clear that MNOs are turning their attention to small cells and urban densification, but it’s a long road littered with obstacles – do you feel significant progress towards the required level of densification is now being made or is the UK market still mainly dormant?
Antony Tomlinson, CEO, Ontix:
Small cell rollout has started: we have seen significant small cell deployments in the City of London, Hammersmith and Fulham, and Aberdeen in Scotland but it isn’t on the right trajectory yet.
There are a few reasons for this, andone is that the MNOs are at very different stages and some are still only planning or doing early stage pilots. There is also a general perception that obstacles are still there, and that the business case for rolling out a lot of new infrastructure is difficult. Someone really needs to show how it can be done and our goal at Ontix is to be that person.
TowerXchange: BT have called for open access to street furniture – can you sum up Ontix’s stance on this?
Antony Tomlinson, CEO, Ontix:
We believe that councils should be free to decide what they want to do, just so long as their street furniture is put to good use so that the public benefit from “access to a choice of high quality electronic communications services”.
Some councils might decide to appoint a wholesale infrastructure provider (WIP) to market their street furniture to all the operators and to undertake the deployment work on the operators’ behalves. This is the concession model, and - contrary to some of BT’s suggestions - it is open to all operators: the WIP is incentivised and contractually obliged to provide access and services to all operators on a fair and non-discriminatory basis.
BT don’t seem to like the concession model. They are proposing that councils shouldn’t be allowed to use it and that operators should engage directly with the council. We would characterise BT’s model as “council licensed” rather than “open access”: the concession model is “open” and we should avoid terminology that seeks to appropriate the word “open”.
The difference between the two models is really down to the WIP: in the concession model the council engages a WIP, the operators contract with the WIP and the WIP provides expertise and resource. In the council licensed model the council doesn’t engage a WIP, and the operators contract directly with the council.
Ontix isn’t wedded to any particular model and we are very open to new models, but we should recognise that there is really no evidence to support BT’s contention that the concession model has been a barrier to small cell deployment. On the contrary: most if not all of the small cells that have been deployed to date have been deployed under the concession model. If we ask BT why they haven’t put up small cells in Carlisle, for example, they may cite various reasons: but the concession model wouldn’t be one of them.
We aren’t clear on whether there is more detail behind BT’s proposal, and how a council licensed model might work in practice. However, we’d suggest that the council licensed model isn’t a one-size-fits-all solution and that it would be wrong to mandate it.
To us, the council-licensed model looks like the wrong model for dense urban areas because it creates the wrong incentives:
- Operators would landgrab assets that they can use (and get fibre to) easily.
- They’d pass over a significant proportion of assets because the business case for single operator deployment wasn’t strong enough.
- They wouldn’t share many of the assets that they did grab as they aren’t incentivised to make them shareable (in fact, quite the reverse).
- Meanwhile the operators would cause chaos: digging up the same roads again and again as they deploy separate programmes in the same locations.
By contrast, the concession model is a good model for dense urban areas, where it incentivises the WIP to invest in connectivity (to maximise the number of usable assets) and to invest in infrastructure (to maximise the number of sharers per asset). This is exactly what Ontix is doing in Westminster, where we are building a hybrid fibre/microwave network so that we can connect the maximum number of assets. We are also deploying a DAS in Oxford Street to get the maximum number of operators on each asset as the area is redesigned and street furniture will be harder to come by.
However, we do believe that an alternate model could be right for rural and semi-rural areas. We would like to see what the council licensed model means in more detail, but potentially the concession model might be overkill and a different model could be quicker. However, the challenge would then become the availability of high capacity and low cost transmission.
TowerXchange: From the conversations had at Meetup Europe in April, it seems like one of the barriers to accessing street furniture is a lack of dedicated manpower and expertise in local authorities – what do you propose is the best solution to streamline access to street furniture? Open access, concessions or another way?
Antony Tomlinson, CEO, Ontix:
If we are looking at a significant deployment – especially if there are multiple operators – then we should recognise that the process needs to be streamlined, and that we need a WIP to do that.
There’s work that needs to be done upfront such as due diligence to confirm the presence, type and location of the assets; marketing to engage the MNOs and demand processing to take orders and manage conflicts. A WIP does this upfront work. Without a WIP there is no one to do it.
Then there’s the deployment work itself: producing design and build packs, providing project management during the build phase and securing authorisations and permits. A WIP brings process and discipline to this. Although the work may be for different operators, the WIP uses the same systems, processes and contractors, and it is all planned into a single programme. If the work on-site is done by the council’s own contractor, which is standard in concessions, then this part of the process is also simpler and quicker. Without a WIP the operators are responsible for their own design and build, they will use their own systems, processes and contractors and their programmes will be separate (and potentially conflicting). If the work on-site is done by their own contractors then it will need to be supervised and signed off by the council.
We should accept that we need a WIP for any significant deployment. We shouldn’t blame local authorities for not having this capability themselves and we shouldn’t expect them to develop it: this isn’t what people pay council tax for!
The model needs to bring in a WIP. The concession model does this, but concessions can take time. If the council of a town with 20,000 residents needs a WIP’s capability, but not the investment that might be appropriate in a dense urban area, then a “standard” concession might be overkill. Perhaps a “light” concession model would be more appropriate: with the council engaging an independent WIP to supply capability as its subcontractor. The council could then recover the costs from the operators. This would be a variation of the concession model, rather than an alternative to it, but it could be simpler and the contracting process could be quicker than a broader concession.
TowerXchange: You’ve highlighted transmission as being one of the key issues holding up small cell rollout. Anyone rolling out small cells in urban areas is facing a cluster of operational challenges in getting fibre (and in some cases power) to the point of presence. Looking purely at the administrative and regulatory challenges you face, what needs to be done to deliver FTTSC and who is best placed to do this?
Antony Tomlinson, CEO, Ontix:
We need to use hybrid solutions, not just dark fibre. Ontix’s Metrohaul network uses a dark fibre core with new, very high capacity smart microwave kit that extends this footprint so we can connect a lot of street furniture assets that would otherwise have been too difficult or too expensive to connect. It just isn’t feasible to deliver fibre to every small cell, and it isn’t necessary. Our solution is great – the capacity and the latency is well beyond what you’d get today from most fibre solutions (ie managed ethernet), and it’s future-proof: we are deploying something that is 5G-ready. You can see it in action today if you use the City of London’s new Wi-Finetwork.
Having said that, we do need more dark fibre: at Ontix we partner with altnets toacquire dark fibre, but it is difficult to get ubiquitous coverage – even in central London – because BT don’t sell dark fibre. Ofcom can help: they just need to follow through on statements they made previously and get BT to offer duct and pole access without the conditions that currently limit the ability to use it to provide mobile backhaul. For us power isn’t a significant problem. At Ontix our Metrohaul network has a passive optical core. This means we don’t need to deploy new powered cabinets.
TowerXchange: There are also significant obstacles in terms of the cost/ROI of small cells, with discussions at Meetup Europe citing the rollout cost as approaching 50% of that of a macro tower, while only providing 10% of the coverage. What measures can be taken to reduce capex, and which players need to contribute to make this happen?
Antony Tomlinson, CEO, Ontix:
10% is achievable. At Ontix we will build a small cell for less than 10% of the cost of a macro tower.
The WIPs need to take a lead here and innovate to make the economics work: we’ve talked about transmission, which is a major challenge, but they also need to move on from the manual and resource-intensive systems and processes that they have used previously to deliver macro sites if they are going to deliver hundreds or thousands of small cells. They need to develop their IT and automate their systems and processes wherever possible, dispensing with spreadsheets and papers held together with bulldog clips. At Ontix we’ve got apps that give our teams in the field access to the same data available on the desktop, and that makes it easy for them to correct data during surveys, including lines of sight as well as basic factual data.
The MNOs need to show some intent to get this moving. They have the chance to give their customers a step-change improvement in capacity by investing in small cells, and they can do it quickly in key areas for a limited amount of money. But they need to take this chance, and focus on small cells as well as macros; and they need to tell their radio planners and OEMs that this is a priority.
TowerXchange: Currently small cells are being rolled out in high profile locations in major cities, and are absorbing a lot of senior management time in the process. How feasible will it be to replicate the current model in Weston-Super-Mare or Stirling, where the returns will be lower and local government expertise even more scarce?
Antony Tomlinson, CEO, Ontix:
We believe that the Ontix model scales and replicates well. The core concept of shareable infrastructure that can support different operators and different technologies is as relevant in Weston-Super-Mare as Westminster. We need to build networks which serve more customers, not just the MNOs, to justify the investment.
If Wi-Fi, FWA and CCTV are using the same infrastructure as the MNOs’ small cells this can work, but if they’re all separate then we’re missing an opportunity. Dark fibre may not be available today in some of these smaller towns but we are finding ways to deliver nextgeneration infrastructure in Bexley, which is in the same situation at the moment, by using council buildings as hubs that connect street furniture over microwave.
Antony is the Chief Executive Officer at Ontix
Antony is well known and well respected across the industry and his knowledge and experience of this sector is unrivalled.
He was previously the head of commercial strategy at CTIL, the network infrastructure JV owned by Vodafone and Telefonica O2, where he negotiated and managed CTIL’s agreements with its largest landlords. He also led CTIL’s successful bid for the City of London concession, developing and delivering the innovative technical, commercial and operational solution that has been deployed there.
Before CTIL Antony worked for Vodafone UK for over 10 years. He held several senior positions in both the technology and legal departments, leading and / or working on projects of strategic importance which included:
- The Cornerstone network sharing deal between Vodafone and Telefonica O2 that resulted in CTIL
- Vodafone UK’s participation in the 4g spectrum auction
- Vodafone’s strategic partnerships with BT for the supply of transmission and wholesale broadband services
Prior to Vodafone, Antony worked in private practice law firms including Freshfields, Olswang and Richards Butler.
Antony graduated from Saint Catherine’s College, Oxford in 1992 with a BA in Philosophy, Politics and Economics.
