5G as a platform for private networks and enterprise applications is more than just another service provider technology. Enterprises, neutral host service providers, building owners, asset management companies and many others are asking about the potential impact of 5G.
We have prepared the 5G workshop to provide the facts – not sell the hype of 5G. The objective of the workshop is to enable ecosystem players understand both the technology and market dynamics that will bring it about. The workshop is intended to help companies prepare their strategy for 5G.
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We designed workshops in emerging technologies to help executives gather the important facts and get a head-start on establishing a strategy to leverage innovation.
Each workshop is delivered by a sector practitioner with insights into both technology and market aspects.
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It is fashionable to talk about the race to 5G. This theme started last year, and has picked up this year with many opinion articles published on the topic. Perhaps the one that got most attention is the white paper by Deloitte: The chance to lead for a decade. The paper compared US networks and investments to that of other countries, with a focus on China. Of the several comparisons made, one in particular got me thinking: can we use the number of cell sites to qualify who’s winning or losing a race? Never mind whether or not the whole notion of a 5G race is relevant (I’ll save this for another post), but is the number of sites, which is a proxy to coverage and capacity indicators, a legitimate metric? In this, I don’t mean to pick on one element of the argument. This question is more fundamental: should coverage and capacity remain the sole indicators for wireless services?
China ahead on number of sites – and that’s that!
According to the Deloitte, China has 14.1 sites per 10,000 people vs. the US’ 4.7 (3x). Alternatively, China has 5.3 sites/square miles vs. the US’ 0.4 (13x). At face value, this is a big disparity, but one that’s well known. The larger of the US carriers like AT&T and Verizon have on the order of 60,000 cell sites, each. That pales in comparison with China Mobile’s 500,000+ LTE sites alone! Continue reading
Anyone knows what generation processor running in their laptop? How about which DSL or cable modem technology is serving their house? With 802.11ax starting to come to market, I don’t see anyone rushing to upgrade their access node. When no one is keeping track of ‘generations’ in these technologies, why is it that in mobile it’s all about the “G”? How did this come about and why? And, will it keep being this way? Or will 5G be the last “G”?
Processors, Fixed Access and Wi-Fi
As I recall back in the 80’s and 90’s we used to buy computers based on the processor. We were all familiar with the different generations of Intel processors, like the 8086, 286, etc. Then came the Pentium and after that fifth generation, most people lost track. Computers became a commodity, the market structure and sales channels changed. Marketing focused on applications and away from technology to reach the mass market. Continue reading
The Algiers Smart City Project is more than just another smart city project: It is a platform for talent mobilization. Over the past week, I had the pleasure to participate in the Smart Cities Summit in Algiers and as mentor and judge in the Leapfrog Hackathon and Startup Challenge. These events were designed to focus attention on Algiers burgeoning startup scene and enhance interaction with global actors to address the IDC syndrome. Continue reading
Interest in the 3.5 GHz band is increasing as its set to become the global 5G spectrum band. We recently undertook a study for a new research report* of global 3.5 GHz band to uncover the impact on the 5G deployment timelines and ecosystem. One of the fundamental questions is putting figures on the value of the 3.5 GHz band. Our analysis shows that on average 3.5 GHz spectrum is 36% that of 2.6 GHz spectrum. In the meantime, we estimate that a 3.5 GHz network will require 15% more cell sites than a 2.6 GHz network. This leads us to conclude that prices for 3.5 GHz spectrum will rise. We also identified a number of issues that regulators will have to address to improve the value and utilization of this band.
5G Spectrum: 3.5 GHz Spectrum Valuation [Source: Xona Partners]
It’s official! Telecom is a utility! The admission comes from service providers themselves. Service providers struggled to monetize value added services to keep from being dumb pipes. Now, it seems that they have resigned themselves to being a utility and are happy to be the pipe. This admission came at the TMT M&A Merger Forum in London last week that I attended. While European service providers dominated event, the sentiment includes service providers all over the world, except for the US. In fact, the rest of the world is just content to watch developments in the US. Continue reading
Results from the recent UK spectrum auction and the minimum price set by the Korean regulator show record 3.5 GHz spectrum valuation.
UK operators paid £1.16 Billion ($1.64 Billion) for 150 MHz. In Korea, the regulator asked for close to $2.5 Billion for 280 MHz.
For comparison, the 3.5 GHz UK spectrum is more than 5x the price paid in Spain and more 3x the price paid in Ireland, two years ago. It is also more than 39x the price paid in the UK in 2003!
It is common to pin the 5G value proposition on its performance, mainly capacity* and latency. These features will enable applications that operators can monetize. However, I will argue here that capacity and latency are secondary to realizing the full 5G value proposition. Capacity and latency make for big headlines and are easy to grasp by the common subscriber. But the true value of 5G resides elsewhere: it lies in the network architecture of 5G. It is not that capacity and latency are not important. However, if we think of 5G purely from capacity and latency perspective, we could misread how the market could evolve. Continue reading
In my earlier post, I outlined a few myths about 5G to avoid the cascading technology trap. Here, I like to extend the discussion and share a few data points on the cost of 5G networks. Over the past few months, our team has analyzed vendors’ roadmaps and product features, assessed spectrum and its cost, and developed deployment scenarios and cost models for 5G. We used this information to optimize our financial models and to deepen our understanding of potential operator strategies in upgrading to 5G networks.
5G Capital Expenses
Taking South Korea as an example – a country of 51 million people with excellent fiber infrastructure that’s widely available to support the backbone of 5G services, the cost of 5G is set to exceed $8 Billion in capital investments for a single service provider. This excludes over $870 million for 100 MHz in 3.5 GHz that’s scheduled for auction in June*. Continue reading
There are a few myth about 5G that I came about in discussions with executives, investors, smart city officials and other parties active in technology development and planning for new services. Two examples:
- Don’t bother deploying a certain IoT technology – for example LoRaWAN or similar technology – because 5G will serve all these applications (e.g. street lighting, smart parking, etc.)
- Don’t bother with fixed wireless access in rural areas. 5G will make current fixed access services redundant.
You get the drift: 5G is the mother of all technologies; it will serve all applications, so don’t bother with anything else! Continue reading
Is blockchain just a buzzword, or can we expect real applications? If it is for real, where’s the opportunity? Xona’s thoughts on these questions are in the video below. Here, I give my own take on these questions.
Artificial intelligence is in yet another hype cycle – the fourth since the 1960’s. What is different this time from past hype cycles is that it is driven by data from the bottom up as opposed a top-down approach in previous hype cycles. The pervasiveness of connectivity and the Internet make AI applicable in many industries, including telecom. At the year’s Mobile World Congress, AI was a key theme. But there was little to show that has not been demonstrated in prior shows. So what are the prospects and challenges for the implementation of AI and how could AI applications in telecom evolve in the future?
A hotshot view!
Before leaving a few of my thoughts – the following video shows the view on AI in telecom from the experts:
The Xona Partners team was at Mobile World Congress and compiled a set of takeaways focusing on industry trends (link). Here, I wanted to add some personal observations on MWC 2018 which is a good barometer of the state on the wireless industry. But I don’t think you can judge based on the size of the event. Rather, it’s the many other signals that tell the story. This year comes in the midst of a slump in network solution revenues and a wave of consolidation of ecosystem players. The event shows how different companies deal with economic reality and an industry-wide transformation that’s reshaping the competitive landscape. Continue reading
Startups lead innovation in the technology world. But is there room for startups in the telecom world? And, what is the future of innovation in this industry? Innovation is one of the themes of this year’s Mobile World Congress which is starting next week, so will the ecosystem address this question?
Is telecom a utility play?
Services providers play a major role in setting the tempo of the industry: they own the end customer. For years, service providers squeezed vendors on price forming large purchasing consortia and bargaining down to the penny. Profit margins, which continue to shrink for everyone, are getting close to levels seen in utilities.
Startups seeking to sell into carrier have to pass many challenges, spend tons of money and wait years for acceptance and a purchase order. VCs don’t have patience for such processes; they backed off from many types of investment in this sector long ago. Continue reading
One of the criticisms of blockchain technology center on power consumption and the cost of mining. The electricity consumed in mining operations is high and continues to grow as mining difficulty increases in response to increasing processing power. Some think that blockchains is wasteful technology that is not compliant with a 21st century outlook for a green economy. Others accept it as the price to achieve consensus and trust in decentralized networks. Following recent work in this space, I like to share a perspective by making a comparison to the energy used in communication systems.
Bitcoin mining vs. mobile base stations
My estimates for bitcoin mining power consumption is around 7,000 MW, a average of a floor of 1,200 MW and ceiling of 12,000 MW. Many external sources point to values in the same range (at the time of writing, this example places power consumption on par with that used in Singapore). By comparison, I estimate that all the mobile base stations use around 12,100 MW, of which around 20% is in China. The power consumption for bitcoin mining has been increasing at a relatively fast pace. On the other hand, power comparison of mobile base station increases at around 2% annual. Based on this, the power used for bitcoin mining is set to overtake that used by mobile base stations this year, by late fourth quarter. Continue reading