The operational challenges of urban 5G rollout

As the buzz around 5G grows and trials of the technology increase across Europe, MNOs, towercos and other neutral host providers are faced with the real challenges of providing the complex and dense infrastructure that will be needed to support the cities of the future. In European markets, where regulation can be set on national, regional or EU-wide scales, infrastructure operators will find themselves picking through a quagmire of bureaucracy and operational challenges to roll out at scale. Even where trials and small-scale rollouts have been successful, the management fire power needed for negotiations and navigating tricky relationships could escalate broader rollout costs beyond the realms of feasibility. Making the jump from our current reality to the vision of Smart Cities with millions of IoT connections and smart, connected transport will demand a significant shift in the way infrastructure is owned, managed and rolled out. 

The lack of clarity around 5G economics is one of the biggest hurdles for infrastructure owners of all types. Mobile network operators who shouldered the cost of infrastructure and spectrum needs for 3G and 4G have found much of the benefit of these technologies snapped up by OTT players whose investments in infrastructure have been very much on their own terms. As 5G is presented as a ‘revolution’ rather than an ‘evolution’, indebted MNOs are naturally very cautious to leverage further without a clear picture of where the returns will lie. 

Sitting in the balancing point between mobile network operators’ fear of over committing and their need to capture the nascent gains which 5G presents are the neutral host operators. Towercos, fibrecos and other communications infrastructure providers have the ability to roll out one set of neutral infrastructure for use by three or four mobile network operators and their access to relatively cheap capital makes the business case much more compelling. However, whether infrastructure is rolled out by MNOs or neutral host operators, rollouts face operational complexities around densifying infrastructure by as many as 10x points of presence for every one currently in existence, particularly in urban areas.  

Although power might not be the first challenge which comes to mind when thinking of urban rollout, it’s a more significant challenge for infrastructure owners than you would expect. 

Outdoor small cells will be connected by fibre, so in most cases power will have to be transmitted by a discrete power grid connection. Although bringing fibre to outdoor locations has its own challenges, connecting to the grid is more dangerous and therefore even more strictly regulated, both in terms of how the cabling is laid and how access to the site is managed. For infrastructure owners, dealing with national grids on a strategic basis is tricky: most of Europe’s power grids are facing more immediate challenges in terms of upgrading ageing infrastructure and supplying mounting demands from both industry and population, the idea of providing hundreds of thousands of new connections for 5G infrastructure is not yet a priority for them. 

In many cities, this problem can be circumvented by attaching  smart antennas to street furniture, which has a pre-existing power supply. Lamp posts are the most common piece of street inventory used for small cell rollout, but many European lamp posts are on a passive system, with no power supplied to the poles during the day, when if course small cells will be working hardest. At this point, two additional problems present themselves: 1) existing lamp posts are often not structurally able to support small cells and 2) in many countries local government has a specific negotiated rate with electricity providers which would preclude them from allowing any third party access to the grid via their assets.

New smart poles can help to navigate these issues on many fronts, providing integrated real estate for small cells and offering access to power on a 24/7 basis. These smart poles will revolutionise the way infrastructure owners can access both space and power in urban areas, but there is still work to be done in terms of defining who will bear the cost of rolling them out on a large scale.

In order to power their urban infrastructure, MNOs and neutral hosts must either find a route to power that bypasses the grid (which is only applicable in some circumstances) or navigate a route through various relationships and entities in order to obtain reliable and constant grid access. While deploying the relevant managerial and legal fire power to obtain agreements with local government, power providers and other stakeholders has worked well for pilot schemes and small scale rollouts to date, the cost of management time needed to replicate these deals on a nation- or continent-wide scale would render small cell rollout unfeasible. 

For many towercos and MNOs rolling out small cell networks, one of the biggest issues they face is accessing fibre. Although we are seeing huge amounts of fibre being rolled out in Europe, many fibrecos are focussing heavily on the immediate need of Fibre To The Home, Premises or Enterprise. While more fibre in the ground offers a better opportunity for connectivity, the technical and commercial specifications of much of the fibre being laid today don’t match the needs of small cell nodes. 

For small cells to work, fibre needs to be configured specifically as a part of wireless communications infrastructure, which means MNOs and towercos either need to work in close partnership with partners in the fibre space or own their own fibre. To date, towercos in Europe have been exploring different models that will allow them access to fibre to facilitate their urban rollout while maintaining a level of ownership or control over the critical infrastructure, which will maintain their value. 

Cellnex, always a market leader among European towercos, has taken the first steps in owned fibre, with the acquisition of Xarxa Oberta de Catalunya, 3,000km of fibre in Spain in 2018. As with their acquisition of CommsCon in Italy in 2015and Alticom in the Netherlands in 2017, Cellnex’s choice to acquire Xarxa de Catalunya is as much about onboarding expertise and experience as it is about owning the physical infrastructure owned by their acquisition. And with over 25,000 towers across six countries, it seems likely that Cellnex won’t rely on just one model for fibre access across all of Europe. 

Spanish towerco Axion in Spain and Arqiva in the UK have taken a different tack, forming partnerships to gain access to fibre for their customers. In Axion’s case their new joint venture with Spanish utility Enagas, Axent, will offer 4,600km of dark fibre for their own rollouts, and also to commercial partners in the telecoms community. Arqiva’s deal with CityFibre provides 15km of dark fibre in London to facilitate the UK’s largest pilot of 5G ready small cells. MNOs Three and Telefonica have also moved into partnership with SSE, using London’s sewer system to provide fibre backhaul ahead of 5G rollout. 

As small cells roll out on larger and larger scales, towercos and MNOs must also form relationships with new service providers who can deliver a cost effective street-level service for operational and maintenance needs. Rather than the skilled engineers who work at height on macro towers, small cell operations will necessitate a new type of managed service provider, who can reach urban sites quickly, comply with local government stipulations in terms of street works and have their own relationships with local councils. As small cells move towards a ‘plug and play’ model, installation skills will become less and less relevant, and on site teams will just be needed to ensure the cells are onsite, before remote commissioning takes place. 

For towercos and MNOs who have worked for 20 years with managed service providers across Europe, finding the right partners for this urban infrastructure, agreeing the scope of their responsibilities and setting up relationships which will drive urban rollout and maintenance of their networks is critical. 

One of the hardest challenges for infrastructure owners in urban areas is the issue of permitting. Getting the required permissions from local government isn’t a straightforward process, and when cities of historic interest such as Rome or Paris come into the equation, the aesthetic considerations muddy the water further. 

Local governments are running very lean operations across much of Europe at the moment, and finding the counterparts with the skills and experience to negotiate on access to street furniture is becoming harder. Indeed, as yet there’s no clear picture as to how local bodies will choose to approach allowing access to urban infrastructure, with some viewing better connectivity as a reward in its own right for local enterprise and populations, and others aiming to use space as a way of raising funds through ground rent. 

The man hours needed from both telecoms infrastructure players and local government in order to deploy as many as 10,000 small cells across a major city will undermine any cost efficiencies made in terms of operational rollout. It’s clear that all parties will have to work together more effectively in order to deliver infrastructure on the kind of scale needed for 5G. 

However, it’s not just the allocation of space on street lights which threatens 5G rollout. European attitudes to EMF under 5G rollout, which have long been cautious during previous technologies, threaten to present a major obstacle to the development of new infrastructure in all areas.

In January 2019, a letter signed by more than 180 scientists from 36 countries was written to the EU to demand further stringent testing on the potential effects of electromagnetic radiation on European populations. If the EU follows Resolution 1815 of the Council of Europe, then time will be taken for an independent task force to be recruited to reassess the health effects of 5G, and 5G rollout will be further delayed. 

For small cell rollout to reach the levels forecast for 5G, regulatory, strategic, governmental and operational challenges must all be tackled and radical new solutions sought. Those MNOs and neutral host providers who apply ‘macro tower’ thinking to their small cell portfolios will find themselves left in the slipstream of the more creative, innovative and proactive players in the market. It’s clear that stakeholder engagement and creating partnerships will be absolutely fundamental to the success of urban infrastructure, and that identifying and working with new solutions providers, be they in power, street poles, regulation advice or streetworks can make or break urban plans over the coming years. Finding the balance between staying ahead of the pack and keeping a careful eye on the market is becoming increasingly hard, and European towercos, from huge multi-nationals to innovative local players, are all taking their own approach to preparing for the next communications revolution.