City limits: the barriers to urban rollout

Throughout TowerXchange Meetup Europe there were several common threads of discussion which came up again and again. On the strategic side, the importance of convergence between adjacent verticals in fibre, edge computing and data centres was a hot topic of discussion. Operationally, the challenges of rolling out a huge number of urban points of presence was at the forefront of the discussion. Drawing together notes and observations from throughout the two day event, from panels to working groups and roundtables, this article addresses the main issues discussed, and draws out the solutions which the industry hopes will drive the proliferation of points of presence needed to support 5G rollout. 

MNOs currently feel that they are being forced to spend on digital infrastructure from which OTT players are sweeping up the benefits. In Europe, OTT players won’t be funding digital infrastructure, however they know that their access to populations in Africa will be improved if they fund infrastructure, so they are currently channeling funding into rolling out networks in emerging markets. Google, for example, is deploying infrastructure across 13 African markets, having decided that if they don’t deploy the fibre themselves no one else will. Currently some specific use cases are justified, but the rest will firm up over the years, and much of the investment in this will have to be speculative. Meetup Europe panellists don’t expect to see the 5G business case firming up within the next five years, and predict a cycle of boom and bust before it’s fully worked out. 

Some participants were keen to point out that there are two models associated with 5G: one of these aims to bring together a disparate group of technologies for seamless use, including WIFI, Bluetooth, 2G, 3G and 4G. On the other side is the revolutionary concept of 5G which will allow us to dramatically lower latency, slice the network and virtualise a service layer. This second concept is harder to achieve and the timescales and use cases are as yet still very unclear. 

Despite the lack of clarity, the new model for 5G is driving different types of partnerships, which extend beyond the traditional scope of communications infrastructure players. Infrastructure plays like MBNL, where operators work together to improve reach and reduce operational costs are already working well. We are also seeing the emergence of partnerships with industry, as ‘campus’ schemes become more popular, industry has a very specific requirement for connectivity and needs partners to help them deliver on it. There are also burgeoning partnerships with municipalities, where the stakeholders flip the traditional relationship on its head and look to achieve both connectivity and added value for a digital society and economy. The idea of all of these partnerships is that they pull towards the same goal, rather than focussing on short term monetisation.  

One of the key issues for infrastructure players wanting to access street furniture is a lack of information about the location, type and condition of assets as well as their suitability for supporting communications infrastructure. The responsibility for this currently seems to be slipping through the gaps, as municipalities lack the manpower and funding to undergo this kind of asset management and MNOs and neutral hosts don’t yet have the scale to make a full review worthwhile. Creating and assessing the existing infrastructure in any region will be critical in order to develop urban digital infrastructure, and this is an area where towercos can add value given the right opportunity – allowing them to help customers with RF planning overlaid with existing infrastructure locations.  

Currently, municipalities can get more money from selling advertising on a site than they can from small cells, so the focus needs to be on improving connectivity, rather than on the money they can bank. However, councils face a threat from local populations who are concerned about EMF levels as points of presence proliferate, and in some cases cities are forcing operators to sign agreements to moderate radio waves. To make this work, small cells need to provide connectivity in a way which doesn’t impact on the aesthetics of a city, and won’t attract negative attention from local communities. As one participant in a working group said: municipalities want fewer antenna and more connectivity. 

In the past, discussions around siting towers have resided with real estate teams for local authorities and municipalities, whose brief has been to maximise the monetisation of council assets. Although municipalities understand that there are huge benefits to trying to work across siloes to achieve the full benefits of a connected population and a digital economy. Ideally, street assets will be packaged up into bundles of sites attractive to neutral host operators, but as with the MNOs, municipalities need to justify the investment of time and resources into new projects. 

Much of the problem faced by neutral host operators is that municipalities may have an absolute statement about their digital aims, but drivers within the different departments are different. Estates want to maximise the revenues from taxpayer-funded assets; CEOs are keen to encourage digital infrastructure but aren’t filtering the message down and digital champions within municipalities are dealing with that disconnect with their colleagues. At the same time, as budgets are cut teams are getting smaller and smaller but having to deal with bigger portfolios and more pressure. 

5G is a source of volume requests: the widespread deployment of sensors, electric vehicle charging, and access to street furniture. Planning becomes a logistical bottleneck unless there’s a cultural drive to make this work. The most successful communications with municipalities have been tailored to suit their audience – those driven by monetisation want to talk about rents, council leadership is more interested in social value – the challenge for neutral host operators is going into the relevant level of detail for each set of stakeholders. This then needs to be replicated across multiple different authorities, which can create a huge amount of cost and delay. 

The phrase ‘Smart City’ means different things to different people, but the best way for neutral host operators to work with municipalities on their ambitions is to begin with a discussion of the outcomes they want for the people who live and work in their communities. Smart cities and IoT solutions can impact how goods are moved through their areas, air quality, the shape of their transport network and how they interact with the local population. 

IoT is currently taking off, we now have thousands of sensors in cities, but in the next few years we could have a million connected devices per square kilometre, and billions worldwide. It’s clear that the features promised by 5G will enable new business cases, but there is a strong case for understanding what customers are looking for now. It’s not clear as yet whether connected automated vehicles will use 5G or WIFI, so it’s easier to start with the known use cases and build from there. 5G isn’t yet critical for many IoT and smart city applications, but as the number of connections grows and network slicing becomes more important, that’s when 5G will be needed. 

In the short term there’s a huge pressure to get cabling into factories, this is one of the biggest conversations in manufacturing in Europe today. Demand is growing month by month, despite the fact it’s not clear yet what the final 5G use cases will be. 

Much of the UK has used the ‘concession model’ to roll out street infrastructure, with varying success and popularity. Testbeds have necessitated months and months of negotiation with each municipality, and often the infrastructure needed by a neutral host or operator can straddle the boundaries between two councils, which adds a further level of complexity. Working with multiple municipalities with an overlay of concession agreements makes a huge amount of work for infrastructure. 

The concession model drives the WIP (Wireless Infrastructure Partner) to generate revenue from the assets, which can limit how they’re used and affect longer term thinking. On the other hand, the ‘open access’ model called for by BT in the UK could result in massive duplications of labour as four operators attempt to each grab assets for themselves and deploy their own fibre to each point of presence. 

Generally, the feeling at Meetup Europe was that the challenge didn’t lie in the legislation itself, but in the consistency with which they are applied and their interpretation by different local governments. Where some authorities will give approval for fairly straightforward plans, other insist on full planning on a site by site basis. This means that neutral host operators find they can’t give accurate timelines or prices to their customers as there’s no fixed understanding of what the permitting implications will be. Until this is standardised it will be hard to break away from the adversarial relationship between towercos and municipalities. 

Local Authorities, like the rest of the world, don’t have a clear picture of what the demand, scale the speed of 5G rollout will be. Without this information, they’re reluctant to invest taxpayers’ money in people with expertise in the market. However, much of the push for digital rollout comes from politicians, who are keen to push forward 5G (and yet aren’t able to fund it). In the UK, the government is focussing on funding 5G rollout in rural areas, assuming that industry will make the market work in London. In Scotland, the government has set up a single point of contact to connect up the estates teams and lawyers in order to prevent blockages and make the programme more efficient and prevent blockages. Now their assets are listed they’re working with Public Procurement Scotland, and the UK and Scottish governments to drive use cases – a model which will no doubt help to set a benchmark for local government across Europe. 

Participants in the Local Government Working Group discussed the effectiveness of current cental government policy and legislation. The new Electronic Communications Code in the UK has yet to play out, but Meetup Europe attendees feel it’s not just about legislation but the nature of the conversation and attitudes of local government which will make the biggest difference to getting urban infrastructure rolled out. 

Several of the working group participants felt that communications infrastructure is not yet respected as ‘critical’ by local government, which is affecting the responses they get, saying that if a water company wanted to overhaul their infrastructure they’d be met with much better resources than wireless communications are, someone needs to subsidise the resources needed at a municipal level. 

Although in theory urban locations have much more availability of power, fibre and street furniture, the nature of small cells means their positioning is more critical than ever, and the disruption caused by running new services to a point of presence underground can quickly escalate the price of the build. In the UK it’s mercifully quite straightforward to access power through streetlights, but in countries like France or Italy, municipal lighting is subject to strict negotiated rates and neutral host operators are barred from accessing that power supply for their own purposes. The time and expertise needed to overcome this barrier, either through negotiation with a power board or through legislative change, to re-classify communications as a public utility, will be huge. 

As Marc Merlini of JCDecaux said during his panel, a small cell needs a site, power and fibre. All of the players bringing those elements to the antenna are trying to reduce the cost of the others so they can make money on their own assets.

Another problem is that contracts for access to infrastructure can be for up to 15 years, in which time no one knows how the needs of each stakeholder (plus those of other players) may change. Building a contract 15 years ago which suited the needs of today’s infrastructure providers would have been almost impossible, so local government and other stakeholders need to try and build flexibility into their contracts and maintain a trusting relationship as technology and use cases drive change. 

Although currently small cell owners are keen to get fibre to every small cell, there are an increasing number of voices in the industry saying that this isn’t a logical or feasible way to approach the rollout. Several of the leading experts at Meetup Europe suggested that the small cell model should become more of a radio play, using high capacity microwave to provide fibre-like capacity without having to dig up the roads. 

Another challenge for small cells is planning. Small cell demand today is derived from macro data, which divides a city into large ‘bins’ and aggregates huge amounts of data across time periods. The tendency of this data is to provide ‘big picture’ information about city centre coverage, but not to give enough granular data on how it’s really performing. Without reassessing the data it’s going to be hard for small cells to deliver to their maximum potential, and a lack of recognition of current performance is another key issue holding back the effective use of small cells. 

Whatever the solution, it’s clear that something needs to change. One CEO described city centre networks in the UK as ‘not fit for purpose.’ Although MNOs have been trying to increase city centre coverage through macro infrastructure for 20 years, they’re still struggling, and small cells clearly aren’t a quick fix as rollout has been slow to date. Meetup Europe attendees tend to expect urban coverage to be approached from both macro sites (through massive MIMO) and through the next generation of small cells, but the neutral host operators in the room are keen to build 5G ready architecture and are working hard to get the economics right.