Are Wireless Private Networks the Next Frontier?

Enterprise private networksTwo paths to 5G deployments are emerging: consumer and enterprise deployments. The former is how operators make the vast majority of their revenue. The latter is receiving much interest as it promises a new bump in revenue. Enterprise private networks is not a new idea: it has been slow to realize it because of economics among other factors. New technologies promise to reduce the cost structure. Some equipment vendors, like Nokia, are making a bet on private networks. Operators in their turn are looking to play a role in the enterprise market as the consumer segment reached saturation.

In my view, making a bet on the enterprise segment requires new operating models that the mobile ecosystem has been slow at evolving. Moreover, 5G is not a prerequisite to success in this space: it’s not evident that enterprises are ready to benefit from the advantages that 5G provide. Additionally, competing technologies exist. It may be that applications in vertical markets will take time to mature by which time the 5G ecosystem would be ready. However, this only serves to increase the market risk. Continue reading

Can Edge Computing Help Telcos Win in a Cloud Play?

Edge cloud - edge computingEdge computing presents a new opportunity for telecom service providers to have a cloud play. Their proximity to users gives them an inherent advantage at the ‘edge.’ The question is: are the telcos ready to capitalize on this opportunity? What could be their approach in securing their share of this market? And, will they succeed in claiming their share of this emerging market?

The rise of the edge computing

Ever since the early age of computers, there’s a constant battle between centralized architectures represented by mainframe computers and servers and the edge represented by personal computers and mobile devices. The mobile cloud has proved extremely successful in meeting today’s applications’ requirements. But the explosion in number of devices driven by IoT and other applications is putting pressure to distribute cloud services towards the edge. New applications with stringent performance requirements necessitate processing closer to the user and device. This made edge computing one of the hottest topics of discussions in industry circles. Continue reading

Is China Really Leading the 5G Race?

5G RaceIt 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 DeloitteThe 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

The Last G!

5G mobile evolutionAnyone 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: A Talent Mobilization Platform

Algiers Smart CityThe 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

5G Spectrum Costs: The Value of 3.5 GHz Spectrum

3.5 GHz 5G Spectrum ValuationInterest 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

5G Spectrum: 3.5 GHz Spectrum Valuation [Source: Xona Partners]

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5G Workshop: Demystifying 5G for Decision Makers

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.

Download brochure: Demystifying 5G for Decision Makers.

The 5G workshop is free of charge to qualified clients.

Contact me for additional information and to book your workshop.

Telecom is a Utility!

Telecom Valuation MultiplesIt’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

3.5 GHz Spectrum Valuation Setting New Records

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!

UK 3.5 GHz spectrum valuation 2018 vs. 2003

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The True 5G Value Proposition: It’s not about Speed and Latency!

5G FutureIt 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

The Cost of 5G

Cost of 5G Capex spectrum 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

5G Myths and the Cascading Technology Trap.

5G TechnologyThere 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:

  1. 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.)
  2. 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

The AI-Telco Intersect Opportunity: A Dehype!

AI Telco applicationsArtificial 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:

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Observations from MWC 2018

MWC 2018The 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