Month: February 2019
Overview of Recent FCC and North America Forum Activity related to 5G
FCC adopts innovative incentive auction for 5G high-band spectrum:
On 12 December 2018 the FCC took a significant step toward holding a major 5G spectrum auction in 2019 by adopting new rules that will promote the availability of high-band millimeter wave spectrum for the next generation of wireless connectivity. The airwaves in the combined Upper 37 GHz and 39 GHz bands are the largest amount of contiguous spectrum available for wireless service in the millimeter wave bands—2,400 megahertz in total—while the 47 GHz band provides an additional 1,000 megahertz of spectrum.
Specifically, the Fourth Report and Order:
- modifies the band plans for the Upper 37 GHz, 39 GHz, and 47 GHz bands from 200 megahertz blocks to 100 megahertz blocks to be licensed by Partial Economic Area, which will facilitate the simultaneous auction of licenses in the three bands;
- adopts an incentive auction mechanism that will offer contiguous blocks of spectrum throughout the Upper 37 GHz, 39 GHz, and 47 GHz bands, while preserving spectrum usage rights for existing licensees; and
- adopts a pre-auction process that allows incumbent licensees to rationalize their holdings.
https://www.fcc.gov/document/fcc-adopts-innovative-incentive-auction-5g-high-band-spectrum
Spectrum:
Forward-thinking spectrum policy is critical for next generation wireless networks. The FCC is focused on making additional low-, mid-, and high-band spectrum available for 5G services.
- High-band: The FCC has made auctioning high-band, millimeter-wave spectrum a priority. The FCC will hold its first 5G spectrum auctions this year in the 28 GHz and 24 GHz bands. In 2019, the FCC will auction the upper 37 GHz, 39 GHz, and 47 GHz bands. With these auctions, the FCC will release almost 5 gigahertz of 5G spectrum into the market—more than all other flexible use bands combined. And we are working to free up another 2.75 gigahertz of 5G spectrum in the 26 and 42 GHz bands.
- Mid-band: Mid-band spectrum has become a target for 5G buildout given its balanced coverage and capacity characteristics. With our work on the 2.5 GHz, 3.5 GHz, and 3.7-4.2 GHz bands, we could make up to 844 megahertz available for 5G deployments.
- Low-band: The FCC is acting to improve use of low-band spectrum (useful for wider coverage) for 5G services, with targeted changes to the 600 MHz, 800 MHz, and 900 MHz bands.
- Unlicensed: Recognizing that unlicensed spectrum will be important for 5G, the agency is creating new opportunities for the next generation of Wi-Fi in the 6 GHz and above 95 GHz band.
Infrastructure Policy – Broadband Deployment Advisory Committee:
The Broadband Deployment Advisory Committee, formed by Chairman Pai in 2017, provides advice and recommendations for the Commission on how to accelerate the deployment of high-speed Internet access. See the latest BDAC news.
The FCC is updating infrastructure policy and encouraging the private sector to invest in 5G networks.
- Speeding Up Federal Review of Small Cells: The FCC adopted new rules that will reduce federal regulatory impediments to deploying the small-cell infrastructure needed for 5G (as opposed to large cell towers) and help to expand the reach of 5G for faster, more reliable wireless service.
- Speeding Up State and Local Review of Small Cells: The FCC has reformed rules designed decades ago to accommodate small cells. The reforms ban short-sighted municipal roadblocks that have the effect of prohibiting deployment of 5G and give states and localities a reasonable deadline to approve or disapprove small-cell siting applications.
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5G Americas – Powering the 5G future with global technology standards:
On 23 October 2018, 5G Americas announced the publication of Wireless Technology Evolution: Transition from 4G to 5G which details the extensive standards work by the global organization 3GPP in the development of 5G wireless technology.
The whitepaper takes a step-by-step look behind the curtain at the 3GPP standards for 5G with a detailed status of key areas of work in 3GPP through Release 16, providing an easy and time efficient approach to understanding the technology standards development.
Release 15, the first phase of normative specifications for 5G provided specifications for a wider range of spectrum bands, from below 6 GHz to millimeter (mm) Wave bands up to 100 GHz enabled by a New Radio (NR) access technology.
The 5G NSA specifications have an LTE anchor for the control plane communications with a 5G NR cell to boost user data. The Rel-15 Standalone 5G NR specification will work without any reliance on LTE and those specifications were completed in June 2018 along with specifications of the new core network. The new core network specified in Rel-15 will provide interaction with the Evolved Packet Core (EPC) 4G system with orchestration, virtualization, a clearly separate control and user plane, and signaling architecture. Network slicing and Service Level Agreement (SLA) for groups of devices of new vertical industries and services will be provided for by the 5G core specification.
Release 16, or phase 2 of 5G, will primarily address any outstanding issues in Rel-15, expansion of 5G NR based on C-V2X capabilities, Industrial Internet of Things (IoT), enhancements to Ultra-Reliable Low Latency Communication (URLLC), and 5G in operation in unlicensed spectrum and above 52.6 GHz. 5G efficiency improvements in Rel-16 will include enhancements to 5G Self-Organizing Networks (SON) and Big Data capabilities, MIMO enhancements, improved power consumption, support for device capabilities exchange, and a study of support for non-orthogonal multiple-access (NOMA).
Security – A critical success factor for 5G:
On 31 October 2018, 5G Americas announced the publication of The Evolution of Security in 5G which details a 5G world that is defined by the core tenets of network security architecture – an evolution of best common practices for people, processes and tools.
The report describes 5G safeguards in depth, as well as the vulnerabilities and attack vectors that they’re designed to mitigate. It also explores how 5G differs from 4G and 3G in terms of radio and core network architectures, and how those differences affect the security mechanisms available to mobile operators, their business partners and their customers. For example, 5G is the first mobile architecture designed to support multiple, specific use cases, each with their own unique cybersecurity requirements. In the enterprise IT world, network segmentation is a common, proven way to mitigate security risks. 5G introduces the concept of network slicing, which provides mobile operators with segmentation capabilities that weren’t possible with previous generations.
Key functions and frameworks specific to previous generations (3G, 4G) will continue to work within the overall 5G umbrella. 5G allows for a proliferation of access technologies of all types with data speeds from Gbps to Kbps, licensed and unlicensed, that are based on wide swaths of spectrum bands and include technologies specified by standards bodies other than 3GPP.
The Evolution of Security in 5G report delves into details encompassing security topics such as cybersecurity considerations and responses, 5G use cases, security functions for 5G-DDoS, various types of threats that are imperative to combat in the connected world of 5G, mitigated controls for 5G networks, and IoT threat mitigation and detection.
Communication (URLLC) to digitize industries and unearth new use cases
On 8 November 2018 announced the publication of New Services & Applications With 5G Ultra-Reliable Low Latency Communication which details the principles of achieving URLLC, explains the need for a new approach and highlights key requirements of URLLC services with an emphasis on technical challenges and solutions.
The 5G Americas report describes upcoming use cases of URLLC in smart transportation, industry automation and tele-surgery, and presents the latency and reliability requirements for these applications. The white paper also identifies possible latency bottlenecks in current cellular networks as well as future 5G networks and lays out the necessary implementation blocks for achieving end-to-end latency reduction required to support mission-critical applications. In addition, New Services & Applications With 5G Ultra-Reliable Low Latency Communication summarizes the recent performance evaluation results of the basic designs and implementation of the 5G physical layer, multiple access layers and air interface blocks essential to reducing latency and achieving the desired reliability. It also discusses other potential latency reduction measures including Multi-Access Edge Computing (MEC).
5G to provide advanced connectivity for 4th industrial revolution:
On 15 November 2018, 5G Americas announced the publication of 5G Communications for Automation in Vertical Domains, summarizing automation concepts and communication modeling for vertical domains incorporating the key specific use cases, requirements and security mechanisms.
Communication for automation in vertical domains comes with demanding and diverse requirements with respect to latency, data rates, availability, reliability, and in some cases, high-accuracy positioning. The vertical industries that will reap the benefits of this new level of automation will range from railways, buildings, factories, healthcare, smart cities, electrical power supply and special events. These new Industry 4.0 opportunities will be possible through making sure that communications between machines is secure, dependable and seamless.
To achieve this, 5G supports three essential types of communication: enhanced Mobile Broadband (eMBB), massive Machine-Type Communication (mMTC), and Ultra-Reliable Low-Latency Communications (URLLC). Connectivity is a key component of Industry 4.0 which aims at significantly improving the flexibility, versatility, usability and efficiency of future smart factories, integrates the Internet of Things (IoT) and related services in industrial manufacturing, and delivers seamless vertical and horizontal integration down the entire value chain and across all layers of the automation pyramid. Meeting these objectives will greatly depend on the 5G technical performance such as supporting a peak data rate of 1–20 Gbps; connection density 1 thousand – 1 million devices/km2; reliability of 99.999 percent; enhanced battery life of 10 years; higher position accuracy; latency 1–10 ms; and strong privacy and security.
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ATIS: Alliance for Telecommunications Industry Solutions
Spectrum bands:
ATIS has published standard ATIS-0700040 [June 2018, https://www.techstreet.com/standards/atis-0700040?product_id=2018216], North American Spectrum Bands (United States and Canada), which summarizes frequency bands in which various technologies are deployed using wireless systems throughout North America and includes commercial and commercial/unlicensed wireless bands. This document maps out the band numbers with frequencies for the uplink and downlink operating bands and is associated with 3GPP 26.101. Also included in this standard is the Citizens Broadband Radio Service (CBRS) band (3,550-3,700 MHz) which is managed and operated by a dynamic Spectrum Access System. ATIS is currently working on incorporating band classes and frequencies for Mexico.
IoT categorization:
ATIS launched an IoT Categorization Focus Group in late 2017 to address how the burgeoning growth in the IoT ecosystem is driving a wide range of new uses and requirements on the network infrastructure. Several recent industry initiatives have examined the main features of IoT applications to better understand the requirements posed by each. The objective of ATIS’ work is to explore the multidimensional characteristics of IoT across devices, applications, subscription type and technology as well as regulatory and market drivers. This work is instrumental in identifying design choices relevant to the standardization of 5G.
ATIS has developed an IoT characteristics matrix, which will be used in subsequent activities to categorize IoT applications to identify network requirements (e.g., network slices). The initiative will aid service providers’ efforts to build networks that support a full range of IoT devices and services.
ATIS has contacted several IoT international standards bodies and fora requesting that they review the characteristics matrix and provide feedback.
http://www.atis.org/01_strat_init/5G/
NTT Communications leads APAC telco cloud market; Telstra and Orange close behind
Japanese telecommunications network provider NTT Communications is the market leader in the Asia-Pacific telecom cloud segment, and is well placed to maintain its position, according to GlobalData. In a new report, the market research company said NTT Communications has carved out a lead due to its software-defined capabilities, wide network and data center coverage and an expanded portfolio thanks to its integration with sister companies. According to the report, the cloud market landscape is evolving in the Asia-Pacific region. While web-scale players such as Amazon, Google, Microsoft and Alibaba are continually expanding in the regions, telecoms operators are carving out a niche by offering integrated network and cloud services.
NTT Communications is the leader in the APAC telco cloud services market with the highest overall score based on four categories – cloud portfolio, data center footprints, software-defined infrastructure and supplemental services.
“Cloud products offered by telcos are comparable in terms of technical capabilities and ecosystem partners,” GlobalData analyst Alfie Amir said. “What differentiates NTT Communications from the rest is its wide footprint and presence in the region to address data residency and latency requirements, as well as its software-defined capabilities which offer better workload management and service orchestration,” he added.
Australia-based Telstra and France-based Orange Business Services are in second and third place. While these providers have similar capabilities to NTT Communications, they are slightly behind with their footprints in the region. However, they are rapidly closing the gap, with Orange Business Services having partnered with Huawei to drive expansion in the region – particularly in China, and Telstra recently announcing a partnership with Equinix for direct access to more infrastructure globally.
The initiatives by telco cloud providers to add software defined capabilities, expand their footprints and enhance service capabilities are in-line with enterprises’ digital transformation directions. Enterprises today are looking for cloud providers with extensive cloud portfolios, not just the traditional IaaS, PaaS, and SaaS, but also cloud-based IT services such as IoT platform, UCaaS, security and marketplace that offer various horizontal and vertical applications.
“The APAC cloud market is still growing fast as the market emerges, while the competition is getting more intense driven by the web-scale players,” Amir said. “Telcos need to continue to leverage their network strengths and at the same time, include latest technologies such as self-service tools, analytics and AI in their offerings to gain competitive advantage,” he added.
Above illustration courtesy of K-Hits which has a report on the global telecom cloud market.
Reference:
SP Telecom deploys VeloCloud/VMware’s SD-WAN technology in Singapore
SP Telecom has launched Singapore’s first software-defined wide area network (SD-WAN). It’s based on VMware NSX SD-WAN by VeloCloud which VMware acquired last year. This will provide businesses with a low latency wide-area network that is automated and infrastructure-independent, to deliver robust and more secure networking services. Coupled with SP Telecom’s network management and consultancy services, this collaboration will expand SP Telecom offerings to meet growing customer demand to more securely run, manage, and connect any application from cloud to device.
The new SD-WAN services will provide businesses with the ability to automate and prioritize business-critical traffic to travel over faster, more secure connections, as well as set backup options for downed traffic links. This optimization of high traffic volume that enables near real-time access to rapidly changing data, is a key benefit crucial for mission-critical industries such as telecommunications, financial services, and the media and entertainment verticals.
In a multi-cloud era, where businesses operate in an increasingly complex environment, VMware NSX SD-WAN combined with SP Telecom’s diverse and utility-base data network provides simplicity, enabling greater flexibility to:
- support virtualized services from the cloud, connecting branch offices and mobile users to any type of data centers such as enterprise, cloud, or software-as-a-service;
- enable bandwidth expansion economically;
- provide optimal connectivity and access to the cloud and on-premises;
- accelerate new site deployments through zero-touch automated deployment.
SP Telecom’s data network is truly diverse, with network paths running along the Singapore power grid, enabling network resiliency for business-critical functions. Furthermore, this data network is enhanced with superior latency performance for more efficient processes. This reduces the risk of outage that could occur due to power or active equipment failure. Part of its network consultancy services, SP Telecom analyses and optimizes the network to deliver cost savings and efficiency. The connectivity and consultancy services, bundled with the new SD-WAN offering, will enable businesses to innovate fast and more securely by delivering robust performance for cloud applications, all through zero-touch deployment, the automation of network infrastructure implementation. Velocloud says their SD-WAN reduces the branch office footprint with a single click with seamless insertion and chaining of virtualized services on premise and in the cloud.
SP Telecom has more than 1M km of fiber connecting more than 100 sub-stations (data centers and commercial buildings) in Singapore as per this graphic:
Figure above courtesy of SP Telecom
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“Smart and discerning businesses are competing to offer differentiated end-user experiences, and with advanced connectivity, they can go-to-market quickly and roll out new innovations to meet the changing demands of customers,” said Titus Yong, Chief Executive Officer of SP Telecom. “This is precisely why we are enhancing our portfolio with VMware’s NSX SD-WAN on VeloCloud, a game-changer that will provide our enterprise customers with the best-in-class network infrastructure that they need to sharpen their competitive edge and win in a digital era.”
NSX SD-WAN is touted by Velocloud as the industry-leading SD-WAN solution. One that enables customers to deliver better cloud and application performance with full visibility, metrics, control, and automation of all devices and user endpoints, and lower overall costs. VMware NSX SD-WAN provides an extensible platform for enterprises and telcos to integrate both on-premise and cloud services under the same consistent business policy framework. It’s said to eliminate data center backhaul penalties with a cloud-ready network to provide an optimized direct path to public and private enterprise clouds.
“We are shifting from a model of data centers to centers of data at the network’s edge. This new networking approach, virtual cloud networking, is required to manage the hyper-distribution of applications and data,” said Sanjay K. Deshmukh, vice president and managing director, Southeast Asia and Korea, VMware. “By deploying VMware SD-WAN by VeloCloud as part of a Virtual Cloud Network, SP Telecom can provide enterprise customers with consistent, pervasive connectivity and intrinsic security for applications, data, and users from the data centers to the cloud and the branch. VMware SD-WAN will enable their customers to streamline the digital transformation journey by providing superior application performance with significantly reduced network complexity,” he added.
References:
T-Mobile’s “Record Breaking” 4th Quarter, Prospects for Sprint Acquisition; 5G Bragging Rights?
Controlled by Deutsche Telekom, T-Mobile USA said it added 1 million postpaid phone customers in the December quarter, accelerating its holiday period gains from 891,000 new subscribers a year ago. For fiscal 2019, T-Mobile said it expects to add 2.6 million to 3.6 million subscribers.
T-Mobile CEO John Legere sounded very optimistic on Thursday’s earnings call:
“We had the highest total customer net additions ever in Q4 and we followed that up with record breaking financials, which is a winning formula for our shareholders. T-Mobile led the industry in postpaid phone net adds for the fifth year in a row and we posted a Q4 record low branded postpaid phone churn. Both service and total revenues hit record highs in this quarter while adjusted EBITDA was our best Q4 ever. Our 2019 guidance shows our confidence for the standalone outlook for T-Mobile. We continue to meet the needs of wireless customers and translate that into incredible results. I feel good about the state of our business going into 2019.
I want to reiterate unequivocally that prices will go down and customers will get more for less. We’re entering the final stages of our regulatory review process and it’s an important time to document the commitments that we’ve made from day one. This is another example of T-Mobile putting its money where its mouth is and backing up what we said in our public interest statement.
In summary, I am very, very pleased with the progress we’ve made on our merger and the process so far and I continue to expect regulatory approval in the first half of this year. Okay, to wrap it up I also couldn’t be more excited about the performance in 2018 and our guidance shows continued momentum in 2019. The combination with Sprint means that we will be able to create a future that is even more exciting for American consumers.”
Legere also said that he expects the acquisition of Sprint to be approved in the first half of this year.
“We continue to work through the regulatory review process with humility and respect for all parties involved. A number of major milestones have been completed and we remain optimistic and confident that once regulators review all the facts they will recognize the significant pro consumer and pro competitive benefits of this combination. We continue to have a productive dialogue with both federal and state regulatory authorities.”
On Monday, T-Mobile told U.S. Federal Communications Commission it would not increase prices for three years, with few exceptions, if it gets approval to buy Sprint for $26 billion.
In sharp contrast, MoffettNathanson analyst Craig Moffett said in a report published on Thursday: “A series of developments over the past few weeks have forced investors to consider the possibility that T-Mobile’s merger with Sprint may be in more trouble than previously appreciated,”
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T-Mobile has just a 10 percent market share of business customers, said Chief Operating Officer Mike Sievert during the call, giving the carrier opportunity for more growth. “Now that the network is there … we’re starting to see these kinds of customers come in, in historic numbers,” Sievert said. T-Mobile added network capacity in rural areas of the United States during the 4th quarter of 2018.
Legere summarized the wireless carrier’s progress and 5G and how the competition (mostly AT&T) responded:
“Our engineering team is hard at work furiously building out our 600 MHz and setting the stage for America’s first real nationwide 5G network next year. Our aggressive build out is on 5G ready equipment and we have made rapid progress in just one year since getting our hands on the spectrum. 2700 cities and towns in 43 states and Puerto Rico are live on 600 MHz and we already have 29 600 MHz capable devices in our lineup today including the new iPhones.
We have standards based 5G equipment deployed to six of the top 10 markets including New York and Los Angeles. We believe the 5G revolution should be for everyone, everywhere, and not just the few intense areas. While the other guys hyped 5G we continue to focus on real 5G using global standards based equipment, 5G NR that will light up and deliver for customers across the U.S.
How has the competition responded to our plans? Well, AT&T responded by trying to rebrand 4G as 5GE and we know the customers see right through their bullshit and Verizon by the way, their current standard pups, pre-standard 5G footprint covers what they even themselves call limited areas in four cities, while our 5G capable 600 MHz network already covers hundreds of thousands of square miles. Also we continue to expand our 4G LTE coverage and deliver industry leading network performance.
Our network now covers more than 325 million Americans with 4G LTE effectively matching Verizon’s population coverage. We now have 600 and 700 MHz low band spectrum deployed to 301 million people across the country and we continue to lead the industry in 4G LTE speeds. In Q4 our average download 4G LTE speed was 33.4 Mb per second once again ahead of all the competitors. We remain very confident in our outlook for 2019 and this is reflected in our guidance.”
T-Mo CTO Neville Ray, bragging about T-Mobile’s adding 600 MHz spectrum for both 5G NR and LTE, said that the uncarrier’s 600 MHz spectrum is deployed in more than 2,700 cities and is supported by 29 devices. It is “going to be the biggest and largest and most transformative piece as we move through ’19 and into ’20. We do not take our eye off the ball at all on capacity and performance…The 600 LTE rollout has been going incredibly strong. As we get our software matured and ready for primetime, we will light up 5G services on those same radios. The 5G story is coming on super strong.” If that wasn’t enough, Ray said:
“You can see an aggressive competitive response against 5G NR victory lap on the fastest LTE. AT&T especially trying to figure out how to not be second or third in that race for the coming couple of years. We’re going to be adding 600 MHz spectrum to the fight, both with LTE and with 5G NR and speeds and performance are going to continue to increase on this network into 2019 and materially more so in 2020 when we can reach our nationwide ambition on the 600 MHz 5G deployment……
Biggest focus right now is, as we’ve reference multiple times here is the 600 MHz build, that’s going to be the biggest and largest and most transformative piece as we move through ’19 and into ’20. I mean thousands upon thousands of new sites with 600 MHz capability coming on air, but we do not take our eye off the ball at all on capacity and performance. We’re at the best capacity performance in our company’s history right now, lowest congestion figures we’ve ever seen. We love to be that way.
The proxy for that in the marketplace is our fastest speed performance. And as I mentioned earlier, we continue to win on that front and look to maintain that lead. On the small cell piece, we are starting to see and introduce license assisted access, so LTE in the 5 gig space we’re seeing very positive results and returns from those investments and so a lot of opportunity to grow capacity in the urban calls. We’re not taking our eye off that ball, but big, big most major improvements coming on the 600 MHz side this year.”
On small cells: “(we have) just over 21,000 small cells in play today. We plan on continuing our march on small cells another 20,000 or so plan to come off as we exit ’19 and into ’20. And we continue to densify this network to prepare for obviously a tremendous capacity and performance future.”
T-Mo President Mike Sievert on incremental revenues and pricing:
“So, on pricing, the short answer would be, we have big aspirations for incremental revenues and growth from 5G, but not through pricing, through our current smartphone plans. So the incremental revenues come from more and more users picking wireless technologies instead of other technologies for their conductivity.
There is a big broadband business that we expect to build, there are big enterprise opportunities, there are IoT opportunities, there more devices per users, there are new capabilities being developed, all of which we can monetize with revenue growth. But we don’t have plans for the smartphone plans that you see today to charge differently for 5G enablement versus 4G LTE.”
Legere concluded his bragging about T-Mo’s (not yet deployed with paying customers) 5G network:
“Yes, so again, as I said from the very first day back in April going into the first week of May, I’ve been down here in Washington with the very same story that the 5G Network that’s going to be built with the $40 billion worth of investment and the breadth and the depth is going to be something that the country needs and has yet to see, it’s going to be super charging the uncarrier, capacity will go up precipitously and prices will go down and jobs will increase. And that’s been a dialogue that has gone from sound bite to tremendous modeling and conversation and depositions and hearings.”
References on T-Mo’s 5G at 600MHz:
https://www.t-mobile.com/news/first-600mhz-5g-test
https://www.digitaltrends.com/mobile/t-mobile-5g-rollout/
http://fortune.com/2019/02/07/t-mobile-5g-prices-sprint/
https://www.rcrwireless.com/20190207/carriers/t-mobile-us-600-mhz-update
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Related post:
The Future of 5G—and the Risks that Come With It
CoBank: Secular Tailwinds Support Current Fiber Optic Company Valuations
Fiber network consolidation has driven up the value of fiber optic networks for strategic buyers and infrastructure funds, says rural communications infrastructure financing company CoBank in a new report. As CoBank notes, the number of fiber networks available for acquisition has declined, causing the report authors to speculate that investors will turn their attention next to regional cable operators and potentially to rural local exchange carriers (RLECs).
Driving fiber consolidation and fiber network values is Americans’ growing demand for bandwidth, the report states. The authors cite research from Deloitte that forecasts the need for an estimated $130 billion to $150 billion in fiber infrastructure investment over the next five to seven years. Key demand drivers include broadband competition, rural coverage and wireless densification.
Building fiber networks takes a long time and as operators race to meet the expected surge in demand, a build/lease hybrid model will likely continue to play out over the next several years. Institutional investor interest in the fiber market should continue given the underlying demand drivers and predictable revenue streams these networks offer.
Given the relatively high entry barriers in the fiber market and consumers’ insatiable demand for data, there do not appear to be many glaring risks to fiber valuations. Oversupply is the most obvious one, but this is more region-specific than any kind of systemic risk, particularly given the proliferation of data usage.
Considering the amount of industry consolidation and scarcity of acquisition candidates, fiber-rich cable operators could become attractive assets for both institutional investors and strategic buyers. All of these factors paint a positive picture for future fiber valuations.
According to CoBank, fiber valuations have increased approximately 30% over the last 12 months, and some buyers have paid multiples above 20 times earnings before interest, taxes, depreciation and amortization (EBITDA).
The authors caution that “there is clearly a disconnect between public (e.g. fiber operator Zayo) and private fiber valuations.” The report attributes this disparity to “volatility in equity markets and waning investor confidence that have resulted in public valuations coming in much lower than private valuations.”
CoBank doesn’t see lower public company valuations negatively impacting those of private companies, however.
“Infrastructure funds have a much longer time horizon, and strategic buyers enjoy synergies that will allow them to pay a higher multiple versus myopically focused public equity investors,” the authors wrote.
Fiber Network Consolidation
The CoBank report references several key fiber network acquisitions by strategic buyers and foreign infrastructure funds, including:
- Macquarie Infrastructure’s plan to purchase Bluebird Network in conjunction with Uniti Group
- European-based EQT purchasing a majority stake in Spirit Communications and EQT’s plan to combine those operations with Lumos
- Antin Infrastructure Partners purchase of FirstLight Fiber
- Crown Castle’s purchase of Lightower, Wilcon Holdings and Fibernet Holdings
With so many deals in the rear-view mirror, CoBank noted that FiberLight, which has 14,000 route miles of fiber, is one of few remaining privately held fiber network operators that has yet to be acquired.
As a result, CoBank argues that strategic buyers and infrastructure funds are likely to begin taking a closer look at those regional cable operators that have been investing in fiber and at “progressive RLECs” that have been investing in fiber to offset their declining regulated revenues.
Although CoBank didn’t specifically identify the category, it would seem that statewide and regional fiber networks owned by RLEC consortia might be a particularly attractive category for such investors.
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References:
https://www.cobank.com/knowledge-exchange/communications/fiber-valuations
https://www.youtube.com/watch?v=GDqOw3jfsMshttps://www.youtube.com/watch?v=GDqOw3jfsMs
Synergy Research: Cloud Service Provider Rankings (See Comments for Details)
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According to Larry Dignan of ZDNET, “the cloud computing market in 2019 will have a decidedly multi-cloud spin, as the hybrid shift by players such as IBM, which is acquiring Red Hat, could change the landscape. This year’s edition of the top cloud computing providers also features software-as-a-service giants that will increasingly run more of your enterprise’s operations via expansion.
One thing to note about the cloud in 2019 is that the market isn’t zero sum. Cloud computing is driving IT spending overall. For instance, Gartner predicts that 2019 global IT spending will increase 3.2 percent to $3.76 trillion with as-a-service models fueling everything from data center spending to enterprise software. In fact, it’s quite possible that a large enterprise will consume cloud computing services from every vendor in this guide. The real cloud innovation may be from customers that mix and match the following public cloud vendors in unique ways. ”
Key 2019 themes to watch among the top cloud providers include:
- Pricing power. Google recently raised prices of G Suite and the cloud space is a technology where add-ons exist for most new technologies. While compute and storage services are often a race to the bottom, tools for machine learning, artificial intelligence and serverless functions can add up. There’s a good reason that cost management is such a big theme for cloud computing customers–it’s arguably the biggest challenge. Look for cost management and concerns about lock-in to be big themes.
- Multi-cloud. A recent survey from Kentik highlights how public cloud customers are increasingly using more than one vendor. AWS and Microsoft Azure are most often paired up. Google Cloud Platform is also in the mix. And naturally these public cloud service providers are often tied into existing data center and private cloud assets. Add it up and there’s a healthy hybrid and private cloud race underway and that’s reordered the pecking order. The multi-cloud approach is being enabled by virtual machines and containers.
- Artificial intelligence, Internet of things and analytics are the upsell technologies for cloud vendors. Microsoft Azure, Amazon Web Services and Google Cloud Platform all have similar strategies to land customers with compute, cloud storage, serverless functions and then upsell you to the AI that’ll differentiate them. Companies like IBM are looking to manage AI and cloud services across multiple clouds.
- The cloud computing landscape is maturing rapidly yet financial transparency backslides. It’s telling when Gartner’s Magic Quadrant for cloud infrastructure goes to 6 players from more than a dozen. In addition, transparency has become worse among cloud computing providers. For instance, Oracle used to break out infrastructure-, platform- and software-as-a-service in its financial reports. Today, Oracle’s cloud business is lumped together. Microsoft has a “commercial cloud” that is very successful, but also hard to parse. IBM has cloud revenue and “as-a-service” revenue. Google doesn’t break out cloud revenue at all. Aside from AWS, parsing cloud sales has become more difficult.
IBM is more private cloud and hybrid with hooks into IBM Cloud as well as other cloud environments. Oracle Cloud is primarily a software- and database-as-a-service provider. Salesforce has become about way more than CRM.
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Vietnamese Mobile Network Operators in 5G Trials
Vietnam Minister of Information & Communications Nguyen Manh Hung signed a decision to license the implementation of 5G for Viettel – a military-run telecommunications company. This licence was granted to test and evaluate technical features and the ability to deploy telecommunications infrastructure using (undisclosed spec for) 5G technology. Hanoi and Ho Chi Minh (HCM) City will be the first two cities to test Viettels 5G and the trial will last for 12 months. Users will not be charged during the test period.
The group must be responsible for investment efficiency and report results to the Ministry of Information and Communications. The ministry said that, together with the 5G trial, it would license the new 4G frequency and study the route to find the right time to turn off 2G or 3G waves.
Viettel engineers install telecom equipment. The company is ready to trial 5G technology. – VIET NAM NEWS/ANN
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Meanwhile, MobiFone said they had sent a document to the Ministry of Information and Communications, asking for 5G testing in Hanoi and HCM City to evaluate technology and the marketplace before officially going live. MobiFone General Director Nguyen Dang Nguyen said they asked for permission to test 5G for the Ministry of Information and Communications from September last year. MobiFone is working with equipment suppliers to prepare for this test. It is expected that devices will come to Vietnam and will be installed in the second quarter of this year, he said.
Viet Nam Posts and Telecommunications Group (VNPT), is also planning to test 5G in the future. VNPT and Nokia signed a co-operation agreement to research, survey and test 5G technology and Internet of Things (IoT) during the working visit in Europe of Prime Minister Nguyen Xuan Phuc in October last year. The project is expected to be implemented within three years and worth around US $15 million. Chairman of VNPTs member council Tran Manh Hung said the group submitted documents to the Ministry of Information and Communications to ask for 5G testing. The purpose of the 5G testing is to enable VNPT to master the technology and plan the network in the future. VNPT had also tested to prepare for the production of 5G network devices, he said.
https://borneobulletin.com.bn/vietnamese-operators-speed-up-with-5g/
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“Vietnam should be among the first nations to launch 5G services in order to move up in global telecom rankings,” said Nguyen Manh Hung, the country’s new minister of information and communications.
Four Vietnamese telecom companies — Vietnamobile, a joint venture of Hanoi Telecom and Hongkong based Hutchison Asia Telecommunications, and three state-owned entities, Viettel, Vietnam Posts and Telecommunications Group, MobiFone and Vietnamobile — are expected to receive 5G testing licenses this year.
https://asia.nikkei.com/Business/Technology/Vietnam-to-begin-testing-5G-networks-next-year
AT&T’s 5G Use Cases at NGNM Conference on Licensing Practices in 5G Industry Segments
Dawn Of The 5G World – AT&T Perspective
by Michael Robinson Director, Business Development AT&T Intellectual Property
Current “5G” Deployment:
• Live in 12 Cities: Atlanta, Charlotte & Raleigh, NC, Indianapolis, Jacksonville, FL, Louisville, KY, Oklahoma City, New Orleans, Dallas, Houston, San Antonio & Waco, TX
• Millimeter wave spectrum
2019-2020 “5G” Deployment:
• Live in 9+ additional cities: Austin TX, Las Vegas, Nashville, New York City, Orlando, Los Angeles, San Diego, San Francisco and San Jose, CA, (millimeter wave spectrum)
• Nationwide coverage available early 2020 (sub 6Ghz spectrum)
5G Use Cases:
1. Healthcare
• Provide more effective healthcare and improve revenue realization for providers
• Minimize need for annual exams or office visits
• Wearables/Home Sensors provide near constant monitoring
• Alert healthcare providers of potential ailments or abnormalities
• Preventative Care: wearables will calculate daily recommendations, provide prompting based on medical records, real-time vitals, projected needs
• Hospital of the Future: collaboration with Rush University Medical Center and the Rush System for Health
2. Retail
• Enable in-store 3D printers to create custom products
• AR/VR to try on clothing
• Home improvement stores use VR to create personalized demo of remodeling options
3. Finance
• Create highly customized financial/insurance experiences
• High resolution video enables customer interaction with in-person or AI representatives
• Security – AI cyber immune system to send threat intelligent defender cells from one edge of the network to the other
• Insurance companies
• Dispatch drones for claim investigations
• Holographic teleportation for adjusters – tour damaged property to provide benefits more rapidly
4. Manufacturing
• IoT neural network enables a ‘brain’ to react, calibrate and optimize end-to-end manufacturing process
• Robots mimicking human capabilities to carry out high-risk, dangerous tasks
• Network reliability and low latency enables manufacturing equipment to communicate wirelessly with back-end systems for time critical operations
• Samsung Austin Semiconductor “Innovation Zone”
• Test bed for the Smart Factory
• Location services to improve safety
• Industrial IoT sensors – environmental & equipment conditions
AT&T Foundry (Plano, TX) – Use Case Development:
• Plano Foundry prototypes innovative solutions for AT&T customers in manufacturing, retail, finance, public sector
• 5G functionality (2019) to co-create 5G solutions:
• Using 5G-enabled network slicing in a manufacturing shop floor to create a separate network for operational equipment efficiency,
• Transform the retail buying experience for consumers through innovative solutions like digital signage, IoT-enabled smart shelving and auto-inventory tracking,
• Enabling life-changing healthcare technologies, like Aira, that use our IoT connectivity to bridge the physical gap between caregiver and patient,
• Deploying drones to rethink the damage assessment process for insurance companies, and ………………
• Applying AI or machine learning techniques to enhance situational awareness for first responders
https://www.itu.int/en/ITU-T/Workshops-and-Seminars/itu-ngmn/Documents/2018/Michael_Robinson_Presentation.pdf
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NGMN Alliance Backgrouner: by Peter Meissner, CEO NGMN
The NGMN Alliance was founded by leading international mobile network operators in 2006 with the “Objective to ensure that functionality and performance of next generation mobile network infrastructure, service platforms and devices will meet the requirements of operators and, ultimately, will satisfy end user demand and expectations.”
§ NGMN actively drives global alignment and convergence of technology standards and industry initiatives with the objective to avoid fragmentation and to guarantee industry scale.
§ A global presence has been established that comprises a leadership network of about 90 Partners: Operators, Vendors, Software Companies and Universities. These Partners are contributing to and delivering the results of the Work Programme with a focus on 5G. Several Cooperation Partners support the NGMN Alliance by two-way liaison statements.
§ The 5G Eco-System is different! New use cases beyond mobile broadband like massive IoT as well as highly demanding requirements from Vertical Industries on low latency, ultra-high reliability and security are causing substantial network transformation. Service Based Architecture, Network Slicing as well as Network Function Virtualisation are the solutions with major impact on network architecture and operations.
………………………………………………………………………………………………………………………………………………………………………………………
AT&T’s 5G Use Cases at NGNM Conference on Licensing Practices in 5G Industry Segments
Dawn Of The 5G World – AT&T Perspective
by Michael Robinson Director, Business Development AT&T Intellectual Property
Current “5G” Deployment:
• Live in 12 Cities: Atlanta, Charlotte & Raleigh, NC, Indianapolis, Jacksonville, FL, Louisville, KY, Oklahoma City, New Orleans, Dallas, Houston, San Antonio & Waco, TX
• Millimeter wave spectrum
2019-2020 “5G” Deployment:
• Live in 9+ additional cities: Austin TX, Las Vegas, Nashville, New York City, Orlando, Los Angeles, San Diego, San Francisco and San Jose, CA, (millimeter wave spectrum)
• Nationwide coverage available early 2020 (sub 6Ghz spectrum)
5G Use Cases:
1. Healthcare
• Provide more effective healthcare and improve revenue realization for providers
• Minimize need for annual exams or office visits
• Wearables/Home Sensors provide near constant monitoring
• Alert healthcare providers of potential ailments or abnormalities
• Preventative Care: wearables will calculate daily recommendations, provide prompting based on medical records, real-time vitals, projected needs
• Hospital of the Future: collaboration with Rush University Medical Center and the Rush System for Health
2. Retail
• Enable in-store 3D printers to create custom products
• AR/VR to try on clothing
• Home improvement stores use VR to create personalized demo of remodeling options
3. Finance
• Create highly customized financial/insurance experiences
• High resolution video enables customer interaction with in-person or AI representatives
• Security – AI cyber immune system to send threat intelligent defender cells from one edge of the network to the other
• Insurance companies
• Dispatch drones for claim investigations
• Holographic teleportation for adjusters – tour damaged property to provide benefits more rapidly
4. Manufacturing
• IoT neural network enables a ‘brain’ to react, calibrate and optimize end-to-end manufacturing process
• Robots mimicking human capabilities to carry out high-risk, dangerous tasks
• Network reliability and low latency enables manufacturing equipment to communicate wirelessly with back-end systems for time critical operations
• Samsung Austin Semiconductor “Innovation Zone”
• Test bed for the Smart Factory
• Location services to improve safety
• Industrial IoT sensors – environmental & equipment conditions
AT&T Foundry (Plano, TX) – Use Case Development:
• Plano Foundry prototypes innovative solutions for AT&T customers in manufacturing, retail, finance, public sector
• 5G functionality (2019) to co-create 5G solutions:
• Using 5G-enabled network slicing in a manufacturing shop floor to create a separate network for operational equipment efficiency,
• Transform the retail buying experience for consumers through innovative solutions like digital signage, IoT-enabled smart shelving and auto-inventory tracking,
• Enabling life-changing healthcare technologies, like Aira, that use our IoT connectivity to bridge the physical gap between caregiver and patient,
• Deploying drones to rethink the damage assessment process for insurance companies, and ………………
• Applying AI or machine learning techniques to enhance situational awareness for first responders
https://www.itu.int/en/ITU-T/Workshops-and-Seminars/itu-ngmn/Documents/2018/Michael_Robinson_Presentation.pdf
…………………………………………………………………………………………………………………………………………………………..
NGMN Alliance Backgrouner: by Peter Meissner, CEO NGMN
The NGMN Alliance was founded by leading international mobile network operators in 2006 with the “Objective to ensure that functionality and performance of next generation mobile network infrastructure, service platforms and devices will meet the requirements of operators and, ultimately, will satisfy end user demand and expectations.”
§ NGMN actively drives global alignment and convergence of technology standards and industry initiatives with the objective to avoid fragmentation and to guarantee industry scale.
§ A global presence has been established that comprises a leadership network of about 90 Partners: Operators, Vendors, Software Companies and Universities. These Partners are contributing to and delivering the results of the Work Programme with a focus on 5G. Several Cooperation Partners support the NGMN Alliance by two-way liaison statements.
§ The 5G Eco-System is different! New use cases beyond mobile broadband like massive IoT as well as highly demanding requirements from Vertical Industries on low latency, ultra-high reliability and security are causing substantial network transformation. Service Based Architecture, Network Slicing as well as Network Function Virtualisation are the solutions with major impact on network architecture and operations.
………………………………………………………………………………………………………………………………………………………………………………………
India’s 5G Conundrum: Mass Adoption not seen till 2023-2024!
by Hetal Gandhi (edited by Alan J Weissberger)
The writer is a Director at CRISIL Research
As the noise around India’s upcoming 5G spectrum auction rise, one must remember that ecosystem development is crucial to the success of next-generation technology. India is yet to complete the transition from 2G and 3G to 4G-LTE. But the march towards 5G is inexorable and necessitates giga-buck spending. Telcos have already invested more than Rs 3 lakh crore (India money) over the past three years, and a large portion of that money has been used to roll out 4G-LTE networks across the country, and we are still counting.
The implementation of any paradigm-shifting technology spawns manifold ecosystem changes such as spectrum usage, network infrastructure and devices. While newer bands will be made available for 5G services in India, the reserve price for the spectrum bands, recommended by the Telecom Regulatory Authority of India (TRAI) at around $0.23/MHz/pop (for metros), is almost twice compared to $0.12/MHz/pop auctioned in the UK in June 2018.
At TRAI’s pricing, owning a block of 20 MHz spectrum across circles in the 3.3-3.6 GHz band will cost a staggering Rs 98,000 crore or so. Also, high-frequency bands such as these will require more investments in cell sites because of their low-propagation characteristics. Even though a combination of sub-1 GHz and 3.3-3.6 GHz is ideal for the 5G rollout, prices in the 700 MHz band remain very high while the rest of the sub-1 GHz bands will be mostly utiliszd for 2G (voice) and 4G-LTE services.
The government seems ready to conduct the 5G auction towards the end of 2019, but it is imperative for telcos to check the readiness of their ecosystems before plonking down truckloads of money to buy spectrum. On the other hand, if the US and China successfully adopt 5G by 2020 as expected, subsequent adopters will have the benefit of lower network equipment and device costs, thus making the ecosystem transition smoother.
An important 5G ecosystem prerequisite, essential to building use cases, is optic fibre networks. But India lags far behind with lower than 30 per cent use of fibre as on date compared to more than 70 per cent in the US and China. CRISIL Research estimates that India needs to lay another 10 lakh fibre km to be 5G-ready. That will require an investment of over Rs 1 lakh crore.
Nearly three-fourths of this cost will occur to get right-of-way (RoW) approvals, which can be as high as Rs 1 crore per km in metros. We believe it will take three-four years for telcos to reach the required fibre levels, given delays in RoW and other permissions.
For telcos, getting RoW approvals has been as much an issue as making investments and RoW issues may delay fibre deployment. However, leasing of fibre can significantly reduce the investments required, depending on sharing modalities, and it will also make India 5G-ready sooner.
Furthermore, the Indian telecom industry is struggling under a massive debt load of Rs 4 lakh crore (as of March 31, 2018). In the recent past, a combination of asset and stake sales and sponsor support have helped telcos maintain their debt levels. But bundling of voice with data amid a price war, coupled with high investments, has resulted in low returns. We now see low single-digit returns on the capital employed in the industry compared to more than 15 per cent three-four years ago. So, telcos need to explore areas of revenue generation to make such investments viable.
While 5G-enabled devices are expected to enter India in late 2019 or early 2020, it may take another three-four years before mass adoption of affordable versions takes place. With the number of interconnected devices rising, the Internet of things will unfold newer revenue streams across domains such as healthcare, education and transportation. A lot is in store for Indian telcos, but things will not take a clear shape before fiscal 2023.
Copyright 2019. Living Media India Ltd