Programmatic Lunch

Deflating 5G

Mobile Marketing

When a Cabinet Minister is fired over a new technology, people start to take notice. Watching cautiously from the wings is the mobile industry, until now in a haze of pent up excitement about its new toy. From the corridors of Westminster to the networks of developers, Oliver Pink, head of communications at Truphone, argues that it’s time to sober up and have a conversation about what telecommunications really needs – now.

Amid the confusion, the excitement and the panic, one thing about 5G is for sure. Even if you had barely heard of it a few weeks back, you’ll know about it now. It has morphed from narrowly reported but wide-eyed enthusiasm at MWC19 to a major news story carried on every network; on every front page.

Worries about its impact on “the health of all species” to South Korea’s KT beating its US rivals in rolling out a functioning network, this nascent technology even has diplomatic relations with China hanging in the balance as the UK government tries – and fails – to reach another crucial policy decision.

Still, there’s a lot of hype around 5G.  The director general of the GSMA, Mats Granryd has said it “is more than just a generational step; it represents a fundamental transformation of the role that mobile technology plays in society.” Other observers have touted its potential to realise the pipe dream visions of some of the most disillusioned IoT device makers, to reshape how rural communities engage with telecommunications and to be the end-all democratising force in communications altogether.

Significant advances
It’s easy to get excited. If not for the simple reason that it does promise some pretty significant advances. Super-fast bandwidth and significantly lower latency absolutely should spark some conversations on the potential for 5G to change the face of AI, or to help move us into a future with autonomous vehicles – technologies that actually require such bandwidth and low latency.

So, now we’ve had a good old naval gaze and the futurists have completed their contract, it’s time to look up. Time to sober up and reflect, with a modicum of objectivity, on the technology’s real potential – and its limitations.

We still haven’t really nailed 4G
This is one of my biggest gripes with the 5G hype – and it’s analogous to the mysterious absence of an iPhone 9, which also infuriates me. The powers that be – not least the UK Chancellor – have opted for glamour over practicality and need.

As it turns out, I’m in good company. According to The Register, Professor William Webb, former director of the UK regulator Ofcom (more on them later), has warned that there is no clear rationale for 5G's 100x faster speeds, and 1000x capacity.

Webb argues for consistent connectivity rather than spotty, faster connectivity. In fact, it’s right there in the title of his book: The 5G Myth: And Why Consistent Connectivity is better. "We will need 10 times current speeds in the future, but most of that will be delivered in the 4G era," he says.

4G simply still isn’t good enough. What’s more, there’s data (thankfully available via fixed line connection also) to back it up. A report on 5G by the National Infrastructure Committee (NIC) in 2016 found that 4G coverage in the UK is worse than that of Albania. It called on the government to address the 4G "digital deserts" on roads, railways, and city centre not-spots.

Commenting on the report, the NIC’s chair, Lord Adonis acknowledged the potential of 5G but warned: “none of this will matter unless we bring our mobile network up to speed.”

The following year, however, all seemed to be well. Ofcom, in its annual International Communications Market Report, estimated that the UK enjoys 99 per cent 4G coverage. When I first read this, I wondered how unlucky I must be that the places to which I regularly travel are almost consistently in the 1 per cent black or ‘not’ spots.

I soon found my answer. Firstly, I discovered that it only refers to good coverage from ‘at least one operator’– practically useless to people who like to move around a bit. Secondly, although the 99 per cent statistic is half-true, it’s reached by such an absurd metric that it tells us absolutely nothing.

The 99 per cent refers to the percentage of residential and commercial premises that can connect to a 4G network – rather misunderstanding the fundamental point of mobile networks. What good is it that I can use 4G at home – where I most likely have a fixed-line connection – if, when I’m on a train from Birmingham to London I can’t so much as make a basic Google search for half the journey?

Come 2019, Ofcom seems to have come to its senses. In April, its CTO Mansoor Hanif revealed to the Scottish Parliament that “geographical coverage… is a revolution in the way we measure coverage because we would [previously] only target coverage to where people actually lived, to houses.”

The actual percentage of UK landmass with a good 4G connection across all networks, you ask? 66 per cent.

The UK government has set a target of achieving 95 per cent landmass 4G coverage by 2022, but as Hanif conceded to MSPs that same day, “I think we are very clear that we are not going to get to the 95 per cent.”

Rural Economy and Connectivity Committee member Stewart Stevenson said his Banffshire home gets “0G”, adding: “I would say that we should have no improvements in telephony services in cities, of any kind, including 5G, until we get decent rural coverage.”

It's a very lazy way to innovate
There are hundreds of new ways to improve connectivity around the world and yet the industry has its sights on making things faster. How boring. The veteran ad man, Rory Sutherland once described this folly in relation to high speed rail:

“The question was given to a bunch of engineers, about 15 years ago, 'How do we make the journey [from London] to Paris better?' And they came up with a very good engineering solution, which was to spend 6bn pounds building completely new tracks from London to the coast and knocking about 40 minutes off a three-and-half-hour journey time… it strikes me as a slightly unimaginative way of improving a train journey merely to make it shorter.”

Similarly, the conversation around 5G tends to glaze over the use cases for the technology. We need to be more granular about the areas in which it will actually make sense to implement 5G and those in which it won’t. It should, for example, create opportunities for augmented reality, virtual reality and immersive video producers who require high data volumes and low latency for their products to function at their full capacity.

But, as for the IoT space, it’s difficult to see how 5G will help. This is, after all, not a speed or volume-based challenge in most circumstances.

You don’t need to put a Formula 1 engine in a taxi, just as you don’t need 5G to run technologies that currently operate well on LTE or lower generation networks. More important for these industries is a renewed focus on what these devices actually need. NB-IoT and LTE-M are still not readily available, yet crucial to the rollout of many estates.

The initial rollout will be spotty – at best.

Ubiquitous networks
A report from Gartner notes that 5G networks will permeate 90 per cent nationwide coverage by 2026 in developed countries, mostly located in Europe and N. America. It will take another half decade before the networks become ubiquitous in other parts of the world. Furthermore, it will largely be focused in urban centres, making it far from the democratising force it’s said to be.

We have seen the first devices for 5G come out this year. But there is no meaningful footprint anywhere in the world at this stage. And how good is a 5G-enabled device that only works from five different base stations?

Carriers will struggle to come up with the right business models for 5G. Why? They always do when new needs are created. Traditionally, networks have been built for a revenue per subscriber of over £20. So, economically speaking, if you pay a licence fee of £0.50 per subscriber per month, the model works because the average revenue per user (ARPU) supports it.

But what happens when there is a proliferation of devices – asset trackers, for example – that can often form huge estates but where traffic per device is typically very low? Now, instead of the £20 ARPU, you’re talking about £1 ARPU and a £0.50 licence fee for some core network elements becomes completely unsustainable.

We, as an industry, need to build a next generation network which supports many more subscribers at much lower ARPUs. It’s not unfeasible. We know because we’ve done it. Truphone has reduced its licencing costs on our network by 87 per cent – and there’s more to come with scale. 5G is a potential answer. But it’s not the only answer and it’s certainly not an immediate one.

MVNOs should be clamouring for equal access, not speed.
Right now, it’s clear that the focus needs to be on the new low-power technologies like LTE-M and NB-IoT. All the frequency bands in the low-power chips being built now rely on them. And, while most carriers are rolling them out, support for MVNOs is still limited.

This is baffling. LTE-M is essentially just a software patch – very easy to provide access. NB-IoT is a little more complicated but orders of magnitude less complicated than building a 5G network.

The big question is, how do MVNOs get access? And they need access. If we don’t and similar carriers which work across borders don’t – this industry will never evolve.

The future for the IoT has to be global. It has to be single SKU devices that can be shipped to and used in every country in the world. And that means connectivity in any market, anywhere in the world. This requires collaboration, it requires more MVNOs with access, not fewer. It means more direct agreements with MNOs, not fewer. Vodafone might have 25 markets, but it’s only 25 markets. Telefonica might have 18 markets, but it’s only 18 markets. And the world is a bit bigger than that.

There has to be interoperability and equal access to these technologies. There has to be a refocusing of our attention away from the potential and toward the possible.

The future is here. Let’s use it.

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