Intelligence Brief: Who needs 5G when Wi-Fi is at 6?

Let’s be honest. The Wi-Fi versus mobile data debates are old and tired.

I can remember the early iterations when Wi-Fi creeped into phones and people began asking if the 802.11 family of technologies would cannibalise 3G usage. Then, as smartphones became an integral part of our lives, we had the “revelation” that most usage was indoors, where Wi-Fi signals were more likely than cellular ones. And still, data traffic on mobile networks continued to rise, with Wi-Fi and 4G living alongside one another.

But, like my 14 year-old Icelandic Sheepdog (now somewhat blind and deaf), a well-thrown stick is all it takes to kick those debates back into action, no matter how old or tired they are. And, in 2019, that stick comes in the form of Wi-Fi 6.

If you aren’t familiar with Wi-Fi 6, the short story is pretty simple. Known from a technical perspective as 802.11ax, the follow-on to 802.11ac (now given the marketing handle of Wi-Fi 5) it uses technologies including OFDMA; Multi-user MIMO; Beamforming; new modulation options; and wake time improvements to deliver better performance. Higher throughput? Sure. But, more importantly, better user scale (support for more users/devices), and battery life and coverage improvements.

[1]Now, if you hear some of these highlights – MIMO; Beamforming; improved throughput; enhanced user capacity; boosted battery life – and think 5G, you’re not alone. These are exactly the sorts of things 5G is supposed to bring.

Thus, we return to the age-old question of whether or not Wi-Fi and mobile data are friends or enemies, and whether or not one can replace the other. Or, in a view of the world taken from the film Highlander, will these long-lived technologies battle until only one remains? There can be only one, right? And 6 is better than 5.

A kind of magic?
Let’s put aside the question of mobility support (where cellular technologies excel) and the indoor-versus-outdoor dynamic. Let’s put aside 5G’s focus on edge computing and network slicing: after all, those should be possible with Wi-Fi. Where mobile networks have always had an upper hand is on the authentication and on-boarding front. Pop a SIM into your phone and it works. Get into a moving bus or car and it works. Roam from one country to another and it works. There’s no need for splash pages, logins or fears of security breaches due to dodgy public hotspots.

In launching its Wi-Fi 6 portfolio this week, then, it was great to see Cisco introduce its OpenRoaming initiative. The concept leverages Hotspot 2.0 technologies alongside a “federation” of Wi-Fi access providers (retailers, venues, hotels, et cetera) and identity providers (operators, device vendors and cloud providers) to deliver seamless connectivity onto Wi-Fi networks, and across Wi-Fi and mobile data networks.

As Cisco’s SVP of product management for Enterprise Networking Sachin Gupta put it during a virtual launch event held for customers, “imagine a world where you can walk in anywhere and you’re on the network.” In retort, Cisco’s Enterprise Networking GM Scott Harrell summed up how most of us feel: “I’m looking forward to that world. That will be awesome.”

He’s correct, it would be awesome. More importantly, if Wi-Fi 6 can deliver on all of its performance promises and if the average user can expect seamless Wi-Fi 6 connectivity, then it really would be a viable alternative to 4G or 5G, at least for many indoor and campus environments.

Done deal. Call the debate over?

Waiting for the hammer to fall
Well, there’s a lot of “ifs” above. That said, I don’t doubt any of the technical claims (no more than I doubt the technical promises of 5G). Where things often break down in bringing new ecosystems to life is the commercial front. Even where the technologies are fully in place, the business cases and organisational will necessary to move forward are often the major impediment.

Consider a few directional indicators:
– Hotspot 2.0 (an OpenRoaming enabler) has been around for a while. And yet, the mass deployments once hoped for haven’t arrived.
– In highlighting how the OpenRoaming Federation will be comprised of identity providers and Wi-Fi access providers, Cisco failed to do one thing: name any of them.
– Detailed in Cisco’s OpenRoaming launch materials, the “find out more” link doesn’t actually lead anywhere beyond a “stay connected to know more” page, which doesn’t paint the picture of anything more than a good idea in the works. While this might sound like a minor nit, it is all indicative of something that is either not fully baked, somewhat rushed or lacking in support.

With that, we have a conclusion to the debate. Or rather, a sign that there is no debate. Nothing has changed from the first, second or last time we all asked whether Wi-Fi was going to kill mobile data…or vice-versa.

With Wi-Fi 6, Wi-Fi will be significantly better. With 5G, mobile data will be better. We will still live with both. They will live together. No debate.

And, hopefully, my dog is around long enough to see the next stick get thrown about.

– Peter Jarich – head of GSMA Intelligence

The editorial views expressed in this article are solely those of the author and will not necessarily reflect the views of the GSMA, its Members or Associate Members.


Intelligence Brief: My MWC19 Barcelona resolutions

At the start of the year, I spent some time outlining my mobile and communications related resolutions for 2019. Rather than make predictions, I wanted to highlight some aspirations and commitments for how I’d work with and think about the industry: you can think of them like a combination of predictions and wishes with a little self-direction. If you missed the column, you can check it out here [1].

With MWC19 coming up in less than a week, I wanted to return to the resolution framework.

Anyone who has been to the show before knows that it offers an incredible opportunity to engage with the entire breadth of the mobile industry, but that it’s so massive that unless you go in with a plan you won’t make the most of it. Consider my resolutions the core components of this year’s plan.

Get to every meeting on time
Yes, this is the equivalent of a New Year’s resolution to run a marathon every month.

Possible? Sure.

Probable? Nope. Unless you’re a logistics genius who can manage to arrange all your meetings in proximity to one another, you will always arrive late to some. But, if we look at MWC19 meetings as part of an ongoing engagement, then leaving early (in order to get to the next place on time) is just an invite to follow-up. That’s my story and I’m sticking to it.

Focus more on devices
I’ve never been a mobile device analyst. And, as much as we all might consider ourselves amateur smartphone analysts when the newest Apple or Samsung devices get launched, it takes a very sharp focus and market understanding to map out the intrigues and implications of an ever expanding device landscape.

But it’s that expanding landscape that makes it all the more important to understand what MWC19 tells us on the device front. 5G business models. IoT business models. Smart home business models. They all hinge, to some extent, on what goes on in the device world.

Focus more on enterprise
Did you read the last bullet? Cool. Replace “device” with “enterprise” and a lot of it holds. I’ve never been an enterprise analyst. And as I look at key operator opportunities around 5G and IoT, the enterprise plays a major role in whether or not the business model pays off, meaning that the enterprise story operators and vendors tell at MWC19 will be an important one to pay attention to.

Give up on lunch
Complaint Bragging is a cousin of Humble Bragging and you run into it a lot at MWC.

“There was so much traffic in our booth, I never had a chance to sit.”
“With five conflicting dinner invites, I don’t know how I’ll manage them all.”
“I had so many back-to-back meetings that I never managed to eat lunch.”

Personally, I’ve always been conflicted about the issue of lunch at MWC. Walking around and engaging in meaningful conversation takes fuel. No argument there. But if time is a finite resource, then the 30 to 60 minutes spent on lunch is time taken away from engagement with companies you may never learn about otherwise. Of course, debating this stuff in my head also takes time away from more important things. So, this year I’m just resigning myself to grabbing jamon and manchego where I can find it and carrying around some Clif Bars.

Look for LTE in support of 5G use cases
This is something of an extension of my New Year resolution to worry more about 4G: recognising that 5G will likely upstage the technology that will come to dominate mobile broadband connectivity over the next five years.

One way to ensure LTE gets the credit it deserves is to shine a light on the value it’s delivering. But let’s be honest here: in the middle of peak 5G messaging, the buzzed-about use cases are 5G use cases.

The good thing is that LTE (and its evolutions) should be able to support many 5G use cases, clawing back some of the spotlight and helping operators make the most of their 4G investments. I know I’m not the only one seeing this dynamic play out and know we should see 4G in support of 5G use cases at MWC19. If it’s there, I plan to find it in action.

Test the definition of “enabling tech”
At GSMA Intelligence, we’ve been describing edge networking, artificial intelligence (AI) and blockchain as “enabling technologies”, foundational supports for new network and service innovations.

The definition, however, implies that these technologies are being put to use as a critical support for things like 5G and IoT rollouts. To be sure, we’ll see AI, edge and blockchain announcements at MWC19 framed in the context of new mobile networks and services. But, the real test of the “enabling” moniker will involve turning this on its head. We’ll need to see major 5G and IoT launches invoke these technologies in some way. If they do, then I guess the definition holds. If not, we may need to look for new naming.

Catch a keynote
Confession time: I’ve never actually attended an MWC keynote. By the time I made it to haphazardly scheduled meetings and everything else, there’s never been time.

I’ve always told myself that anything important coming out of a keynote will be covered by Mobile World Live. To some extent, that’s fair. However, having just seen the musical Hamilton for the first time, I was reminded that live versions are just naturally better than soundtracks or recaps.

In any case, Rakuten’s Mickey Mikitani (Wednesday) and Microsoft’s Satya Nadella (Monday) are both people I look forward to hearing from. If nothing else, should a big announcement of some sort get made, it’s always nice to be in the room where it happened.

– Peter Jarich – head of GSMA Intelligence

The editorial views expressed in this article are solely those of the author and will not necessarily reflect the views of the GSMA, its Members or Associate Members.


Intelligence Brief: Spectrum auctions – when do they pay off?

Since spectrum auctions in the mobile sector first became widespread in the 1990s, they have tended to generate one of two headlines. Either there is a “spectrum bonanza”, where more money is raised than expected, or “Government loses out” by getting less money than it was hoping for. In this respect, the record-setting high prices that UK and German operators paid for 3G spectrum almost 20 years ago still seems to influence some of the expectations amongst governments and industry analysts.

But when analysing spectrum awards, we should not lose sight of the impact on consumers.

A debate on this topic has persisted for years, with lots of discussions about economic theory and sunk costs. Do high spectrum prices – especially those driven by government policies rather than market demand – have an impact on the amount that operators invest in their networks or on the prices they charge to their customers? Or can spectrum awards be used to generate more revenues for public services without harming consumers of mobile services?

In fact, very little evidence has been gathered to determine how consumers are affected by spectrum prices. The research that has been carried out is generally inconclusive. We therefore recently published a study [1] that isolates the impact of spectrum pricing on consumer outcomes, including network coverage, quality and mobile prices. Looking at 229 operators in 64 countries (including both developing and developed markets) over the period 2010-2017, the research presents strong evidence of a causal link between high spectrum prices and negative consumer outcomes. Specifically, we found that:

High spectrum costs played a significant role in slowing the roll-out of next generation mobile networks in both developed and developing countries;
More expensive spectrum reduced network quality, as measured by download and upload speeds and latencies;
Countries that released spectrum early and in larger quantities saw quicker 3G and 4G network roll-out than countries that released spectrum later and/or in smaller amounts;
High spectrum costs are associated with higher consumer prices in developing countries, though this is not conclusive and so further research is needed.

What does this mean for spectrum policy?

[2]First, as economists are often fond of saying, “there is no free lunch”. governments that want to maximise revenues from spectrum auctions can continue to pursue this as an objective but they will now do so in the knowledge that it will have a negative impact on the development of mobile services. This is incompatible with other objectives to expand access to 4G and 5G as enablers of economic growth and sustainable development. Ultimately, policy-makers have to make a decision on what trade-offs they are willing to accept.

Second, auctions can deliver inefficient outcomes when they are poorly designed. One example of this is in relation to reserve prices. If these are set too high then precious spectrum may go unsold – as in the case of India (2016), Bangladesh (2018) and Ghana (2015 and 2018) – or force operators to pay more than they would otherwise. Another example is when governments artificially limit the supply of spectrum to operators, for example through set-asides (such as the German 3.5GHz auction in 2019) or large and mismatched lot sizes (such as the Italian 3.5GHz auction in 2018). The lesson from this is that auctions will not automatically deliver an efficient outcome if they are designed to achieve several objectives. Policy-makers must decide what their priorities are.

Lastly, spectrum should be released to the market as soon as there is a business case for operators to use it. In a market where long-term value, innovation and cost reductions are driven through short technology cycles (5G has been launched within ten years of the first 4G LTE networks), unnecessary delays to spectrum awards risk harming network roll-outs and leaving people behind. An up-to-date spectrum roadmap also alleviates uncertainty.

As we move into the 5G era, in many countries the temptation to maximise spectrum revenues will remain – the potential sums involved are often too large to ignore. But if governments want to ensure that spectrum is utilised to support affordable, high quality mobile services for the benefit of citizens, then the best way of achieving this is for operators to pay market-driven prices for spectrum that are not distorted by auction design or other policies.

We’ll know we are moving in the right direction when ‘high’ and ‘low’ auction revenues stop making the headlines and instead generate the same level of media interest as other aspects of spectrum management policy.

Kalvin Bahia – Economist – GSMA Intelligence

The editorial views expressed in this article are solely those of the author and will not necessarily reflect the views of the GSMA, its Members or Associate Members.


Intelligence Brief: How is Jio leveraging start-ups?

The concept of operators targeting start-ups for acquisition is not new: the story around operator moves on this front – take Orange, AT&T, KDDI, et cetera – is well known. And, if you’re building a list, you should probably add Reliance Jio to it.

Yet, as much as Jio is known for the way it upended the Indian mobile market, its progress with acquisitions is often overlooked. That’s a shame. Its journey, for sure, has been no less than a business school case study of leveraging acquisitions for rapid growth.

Jio, the telecom operator which has revolutionised India by commoditising data, has stepped-up its engagement with start-ups through outright acquisitions, partnerships, or equity stake purchases. The company’s due-diligence team has been extremely busy, in particular, over the last few months, cherry-picking start-ups in music streaming apps, media production, AI, and blockchain. To name a few:

Haptik. Jio Digital Services struck an approximately $98.42 million deal to acquire Haptik, one of the world’s largest conversational AI platforms which counts Samsung, Coca-Cola, Future Retail, KFC, Tata Group, Oyo Rooms and Mahindra Group among marquee clients. It underlines Jio’s strategy of providing Indian users conversational AI-enabled devices with multilingual capabilities
Saavn. In March 2018, Jio announced integration of its digital music service, JioMusic, and OTT platform Saavn, which powers Amazon Alexa in India. The combined entity, valued at more than $1 billion, then introduced JioSaavn to compete with the likes of Amazon Music, Apple Music and Gaana.
Radisys. June 2018 saw Jio buy open telecom solution provider Radisys for $74 million, in a deal focused mainly on enhancing Jio’s presence in 5G, IoT and open source architecture adoption.

All told, Jio has invested $37 billion so far in the four years since its birth and is still running strong. For comparison, the total capex incurred by the telecom industry in India from 2010 to 2016 was around $38.7 billion. And how does Jio’s acquisition strategy fit in?

Jio sees itself as pillar around these technology companies, functioning as a toll gate for the host of the services it’s bringing to the table through vertical and horizontal integration. Jio has set up film, music, television and sports streaming services; news and content aggregators; chat, cloud storage and payment services, all of which appear poised to strengthen the company’s new commerce and digital revolution drive. By integrating start-ups, Jio wants to shed the image of being a mere connectivity provider. It has built a highway in the form of its mobile network. Now, it is building its digital ecosystem of apps by embracing start-ups and technological companies into its fold.


But, let’s take a step back and consider a few facts about the Indian market.

Figures from regulatory body TRAI show more than 562 million Indian users accessed the internet through their phones as of June.

Jio, the youngest of the Indian mobile operators had a predominant share of subscribers (331.26 million or approximately 59 per cent). Meanwhile, media reports suggest that 1GB of mobile data cost $0.26 in India, compared with $12.37 in the US, $6.66 in the UK, and a global average of $8.53.

Why does any of this matter? Sheer scale and competitive pricing have been leveraged by Jio to build an entire digital lifecycle for the customer, enabling them to access services via single platform. Hence, acquisition of these start-ups presents a unique opportunity for Jio, either to transform its existing domain or add new services for its customers.

Again, Jio is not alone in this regard: there are scores of operators aggressively eyeing start-ups across the globe, hoping they represent figurative cogs fitting directly into their business machinery. Yet, aspirations and outcomes are not the same thing. Simply going on an acquisition spree doesn’t assure that you will be entrusted with the keys to success.

What make these start-ups operator eye candy?
It is simple to comprehend these start-ups are totemic of operators current appetite to transform themselves into end-to-end solution providers and, quite frankly, the benefits of this arrangement are mutual. On one hand, the sheer size of most operators offers a unique proposition to these acquired technology companies by allowing them access to literally millions of customers. On the other hand, considering the vast trove of data operators house, it could benefit them to apply start-ups relevant software, automation and virtualisation solutions. Meaningful collaboration and acquisition could help the operators to unlock the vast potential for business insights and new services for telecom operators.

Operators can also leverage expertise and cutting-edge solutions which these start-ups bring to streamline their business models, user experience, customer profiling and engagement, as well as redefining their cost in marketing, sales and operations. But the word to watch here is “meaningful”. Although not a really a start-up, the industry has witnessed the fiasco of the Tumblr acquisition [2] and it’s worth learning a lesson.

What can go wrong?
Functionally, start-ups and operators are worlds apart. Start-ups get to be fast moving and lean, with agile decision making allowing them to leverage this flexibility. But, when working in tandem with established operators they can lose their edge. This culture clash can yield collateral damage too. For example, highly skilled employees of these start-ups (the backbone of any technology company) might consider moving elsewhere during or after the acquisition process.

Beyond cultural dissonance, there’s also the issue of business dissonance: it’s not necessarily the case that a promising new business will always fit in an operator’s scheme of things. Consider Tumblr, which became part of Verizon following its acquisition of Yahoo. You might have asked, backed then, how the two companies fitted together: when Verizon sold the asset for less than $3 million (significantly less than the $1.1 billion Yahoo paid for it in 2013), pointed to the answer.

And it all means?
Jio, like other operators, has seen the writing on wall: technology, apps, content, advertising, the cloud, and IoT have become a mainstay of modern digital survival. The acquisition of relevant start-ups underpins an attempt to hold the ground in an area where innovation is happening, with significant value creation and new business models hopefully following.

It will be interesting to see whether Jio can emulate the results of business strategies adopted by long-serving operators across the globe through its spate of acquisitions and partnerships with start-ups or it fails to give them the required attention.

Ashish Singhla – senior research analyst, strategy – GSMA Intelligence

The editorial views expressed in this article are solely those of the author and will not necessarily reflect the views of the GSMA, its Members or Associate Members.


Intelligence Brief: Should you care about CBRS?

Last week, the FCC approved five companies to begin initial commercial deployments of the Citizens Broadband Radio Service (CBRS) [1], which introduces a flexible model for spectrum sharing in the 3.5GHz band.

This development represents a major milestone in what has been a huge talking point in the US over the last few years. Nevertheless, CBRS is not widely understood elsewhere even though its implications are potentially wide-reaching. This makes it important to explore what CBRS means for mobile operators, as well as those companies outside of the industry, which will use CBRS as a testbed for deploying their own connectivity solutions.

How does CBRS work?
The CBRS initiative opens up 150MHz of the 3.5GHz band (3550MHz to 3700MHz) using a three-tiered approach to spectrum management:

Incumbents: Includes military, satellite providers and wireless ISPs. These users have the most rights over the CBRS spectrum.
Priority Access Licences (PAL): Holders pay to buy rights to a portion of the spectrum (70MHz), but can only use the spectrum when it is not in use by incumbents. The PAL spectrum auction takes place in 2020 using county-sized licence areas.
General Authorised Access (GAA): Users will be allowed localised access to up to 80MHz of spectrum as long as it does not interfere with incumbents or PAL holders. GAA spectrum will be made immediately available for commercial deployments.

The five companies approved by the FCC to start commercial deployments (Amdocs, CommScope, Federated Wireless, Google and Sony) are Spectrum Access System (SAS) administrators. Their role is to manage requests to use the spectrum at particular times and in certain areas, ensuring there is no interference between the three tiers.

How does CBRS benefit mobile operators?
In GSMA Intelligence’s report Region in Focus: North America (released this week), we look at the latest telecoms and broader TMT trends in the region, including a detailed look at CBRS’s potential impact on mobile operators. One key benefit will be the chance for operators to use CBRS spectrum to boost mobile capacity in congested locations. This is similar to how some operators deployed the unlicensed 5GHz band via Licensed Assisted Access (LAA).

Mobile operators seeking to enhance capacity will benefit from 3.5GHz spectrum emerging globally as a key 5G licence band. This means we can expect to see a steady release of new smartphones compatible with CBRS, including the latest iPhones and Samsung Galaxy devices.

Yet, CBRS’s potential extends beyond smartphones. It presents mobile operators with a chance to deliver home broadband services through fixed wireless access (FWA) technology. These deployments can be expected as early as this year, with AT&T already working with Samsung and CommScope to rollout FWA services using CBRS spectrum.

New opportunities, new players
CBRS will also drive change in other areas. For example, the use of localised spectrum licences makes it easier to deploy a location-specific mobile network, which allocates a dedicated slice of bandwidth for the sole use of a specific customer.

Demand for location-specific networks is likely to come from several enterprise verticals such as the manufacturing sector, which could use CBRS to support the high-speed mobility required by robots and vehicles as part of factory automation. There is also likely to be interest from industries involved in handling sensitive and personal data, attracted by the increased security offered by isolating their data from public networks.

CBRS also enables other solutions, such as neutral host networks. These are most common as localised deployments in busy places requiring ultra-high bandwidth (for example airports, shopping centres and stadiums). Several companies are trialling neutral host solutions including Wi-Fi hotspot operators (for example Boingo), equipment vendors and other localised network providers (Dense Air). CBRS allows neutral host networks to be deployed without mobile operators sharing licensed spectrum, easing commercial and technical obstacles.

Mobile operators are most likely to lead initial CBRS deployments. At the same time, operators can’t assume to be the default providers of connectivity. CBRS lowers the cost of entry to new providers, and many enterprises are taking this opportunity to experiment with deploying their own solutions. For example, Amazon plans to deploy CBRS at its Sunnyvale campus in California, building on a demo at AWS re:Invent 2018 where it showcased real-time surveillance cameras and smart meters.

What to expect next?
The initial commercial deployments of CBRS must run for a minimum of 30 consecutive days. SAS administrators will then report their findings to the FCC, ensuring their systems worked to prevent interference between users. After this, we will be closely watching out for further CBRS deployments as well as other key milestones, including:

PAL auction: PALs come with longer licence terms, larger coverage areas and greater rights than the GAA tier. However, the cost of acquiring PALs is likely to reflect these benefits. As such, the PAL auction will be a true barometer of demand for spectrum from those companies outside the mobile industry, which are deploying CBRS solutions in the GAA tier.
CBRS in 5G: CBRS will initially use LTE, with support for 5G coming later in the CBRS roadmap. This poses a dilemma to companies interested in deploying CBRS: move early on LTE or wait for 5G support? Many customers began planning their deployments when 5G was still a way off (reflecting the significant delays encountered by CBRS). It is therefore unlikely they will wait until CBRS supports 5G to commence deployments. This underlines the strong early demand seen by SAS administrators (such as Federated Wireless), which indicates LTE meets the initial CBRS requirements of most customers.
More spectrum sharing initiatives: If successful, CBRS could lead the FCC to pursue similar initiatives in other frequency bands. There will also be implications beyond the US, with many countries contemplating the merits of spectrum sharing initiatives. Some of these have already come to fruition, albeit in different forms to the three-tiered approach of CBRS. UK regulator Ofcom is enabling spectrum sharing through Shared Access and Local Access licences across four bands, while Germany’s Bundesnetzagentur has a gone a step further through reserving 100MHz of mid-band spectrum for local use.

James Joiner – analyst, Core Mobility Research – GSMA Intelligence

The editorial views expressed in this article are solely those of the author and will not necessarily reflect the views of the GSMA, its Members or Associate Members.


Intelligence Brief: Is Germany ready for IFA tech?

Europe’s largest consumer technology show, IFA 2019, has wrapped up for another year in Berlin. Although the show is based in Germany, its focus is global. That said, it is important to understand that while the show is global in scope, local market conditions are an important factor in any analysis of emerging technologies and trends.

So, let’s look at the German market, both because it is the host country and to draw attention to the uniqueness of Germany in the global consumer electronic market landscape.

Most consumer tech ecosystem players were on hand to showcase their latest creations, platforms, and products, giving press and the public a glimpse at the future of connected homes, entertainment, transportation, the latest in gaming technologies and, of course, the latest smartphones. Among announcements from nearly all major consumer electronics brands, several key themes emerged which showed what consumers can expect in the near future, both in Germany and globally.

The next-generation technology was omnipresent at IFA 2019. Discussions around the impact of 5G in 2019 have increased relevance, as numerous countries have launched services this year. And no two companies were more passionate in evangelising the advent of 5G than Huawei [1] and Qualcomm [2] in their respective opening keynotes.

While Huawei emphasised the all-encompassing power of 5G to connect everyone and everything, Qualcomm was eager to note the potential for fixed wireless access (FWA) that could be positioned to eventually replace traditional wired broadband internet configurations in the home and in the workplace.

The potential of 5G to replace fixed broadband is good news for operators and consumers alike: as household devices are increasingly connected, the bandwidth and speeds offered by 5G can enable a seamless smart home (or workplace).

And what does Germany look like on this front? Brand new data from the GSMA Intelligence 2019 Global Consumer Survey suggests only 21 per cent of German consumers intend to upgrade to 5G when it becomes available. Moreover, any attempt to transition to FWA 5G in the home will face fierce competition from legacy players in the fixed broadband market. To generate interest, some operators are considering bundling 5G services with IoT or gaming to entice consumers. Unfortunately, this initiative may have limited impact: found that in Germany, only 10 per cent of consumers would be likely to invest in a 5G subscription if IoT devices were bundled with the offer.

Nevertheless, one clear takeaway from IFA 2019 is that 5G is not only on its way, it is here to stay. Consumers can expect the rapid proliferation of 5G enabled devices in 2020 and beyond.

Ubiquitous connectivity in the home
IFA 2019 is a showcase for connected everything: washing machines, ovens, dishwashers, vacuums, and even a connected closet from Samsung. While each vendor in Berlin seemed fully invested in connected devices in the home, the Consumer Survey data indicates the German market is actually among the slowest to adopt connected smart home devices (see chart, below, click to enlarge).


While in markets such as the UK and the US, connected devices hover around a 50 per cent adoption rate, ironically, Germany, the host of IFA 2019, lags significantly behind. Among the reasons cited by German consumers for their reluctance to adopt connected devices in the home are privacy and security concerns (31 per cent), and a lack of understanding of the value of connected devices (54 per cent). Given consumers privacy concerns and their overall indifference to the smart home, vendors will have an uphill climb in growing the smart home market in Germany.

Another significant takeaway from the chart is that across all the markets shown, adoption of smart home devices has stagnated year-over-year, with no new uptake since 2018. This raises some concerns for vendors at IFA and beyond, which have invested heavily in their “connected everything”.

Digital assistants
[4]The slogans “works with Google Assistant” and “works with Amazon Alexa” may well be my most lasting impression of IFA 2019, mirroring the experience from CES for many people. These slogans were emblazoned across a seemingly unending array of product types, from coffee machines, to dishwashers, televisions and clocks.

When I asked Amazon if it hoped Alexa would be the default access point for connected devices inside and outside the home, my question was met with some equivocation. Yes, basic functionality could be accessed with Alexa-enabled devices, but for more granular instructions to different devices, the proprietary application included with the device in the home would need to be used. The fundamental problem here is obvious: as these connected devices proliferate, each with their own associated application, it will become extremely unwieldy to sort through a dozen applications to find the controls for the device or appliance that a consumer is looking for. This constitutes a major customer pain point.

Furthermore, there is the issue of a digital assistant usage patterns. Our survey showed the proportion of users accessing their digital assistants on a daily basis is, with the exception of the US, very low (see chart, below, click to enlarge).


For digital assistants to become the portal through which a consumer accesses connected devices, these numbers will need to increase in the coming years, which will perhaps be the inevitable consequence of the increasing number of partnerships between Amazon, Google, Apple and ecosystem vendors, as they embed their digital assistants into a multitude of new products.

Final word
As planned, IFA 2019 had something (insights, at least) for everyone. For operators, the prospect of FWA 5G as an alternative to fixed broadband is an enticing new revenue opportunity. For ecosystem vendors, while there remain significant hurdles in adoption for “connected everything”, the industry is nonetheless pursuing this objective, even in markets which are more resistant to new technology adoption such as Germany.

For us at GSMAi, IFA provided a lens through which to view our 2019 Consumer Survey results: look for more from that soon.

Jason Reed – lead analyst, Consumer and Survey Insights – GSMA Intelligence

The editorial views expressed in this article are solely those of the author and will not necessarily reflect the views of the GSMA, its Members or Associate Members.


Intelligence Brief: Who would licence Huawei 5G tech?

Last week, following a two-hour interview of Huawei’s CEO and founder (Ren Zhengfei) by The Economist [1], the vendor’s 5G network solutions became the buzz of the mobile tech industry, yet again. For much of this year, those solutions have been in the news because of a potential (and, in some cases, real) prohibition against operators deploying them. The news last week was different.

Over the course of the interview, Ren said he would be willing for Huawei to license its 5G technology (existing patents, code, production techniques), allowing a third party to control and alter the code, building 5G kit based on these assets and ensuring that Huawei would have no control over any infrastructure that results.

And, over the course of the week that followed, various folks weighed in on what this all means. To their credit, the punditry generated a lot of great insight into why Huawei would make such an offer. That’s an important question. But it’s not nearly as important as questions around what comes next and how the market (including operators and other vendors) might react to Huawei’s offer.

What’s the Huawei strategy behind all of this?
This is an easy one, if only because it’s been discussed so much already.

The concept of licensing existing 5G assets (patents, code, technical blueprints) and giving a buyer permission to alter the source code is all about building trust while monetising existing R&D. If another company can leverage Huawei’s core 5G assets in order to build its own solutions, that company can (in theory) ensure that it’s secure. The licensee benefits by capturing business based on Huawei’s 5G know how. Customers benefit from equipment they know is safe (without dependency on a party they don’t trust). Huawei benefits by generating revenue that it wouldn’t otherwise have access to. Win-Win-Win.

There is another angle here too. We’ll come back to that at the end.

Who would buy third party kit powered by Huawei?
Past performance, as they say, is no guarantee of future results. Putting that aside for the moment, Huawei claimed earlier this month that it had secured more than 50 commercial 5G contracts. In other words, there’s a good body of empirical evidence suggesting that Huawei’s 5G kit is compelling, and not just in price sensitive markets. If another vendor could replicate these products, then their offer should be compelling as well.

And if there was ever a time for a new vendor to enter the market with a compelling product offer, that time is now.

[2]In a poll of 100 operators across the globe (think the vast majority of mobile connections and capex), the GSMA Intelligence team checked on whether or not 5G was going to be an occasion to bring on new network suppliers (see chart left, click to enlarge). The verdict? More than half plan to do just that. Just as importantly, only about 20 per cent think it’s unlikely that they’ll bring on new suppliers in their 5G builds.

What’s been holding back operators from introducing new vendors to date? From integration issues to corporate culture and tepid RoI expectations, a plethora of considerations keep incumbents in place. But the number one factor conspiring against new suppliers? Network security concerns. If trust is the issue Huawei is looking to solve with a potential licensing scheme, it seems well-aligned with operator thinking around new suppliers.

Who would license Huawei’s 5G know-how?
Of course, before any product based on Huawei’s 5G assets gets built, there would need to be an interested licensee. On this front, two factors come into play: costs and future R&D.

It’s no major insight to note that a 5G licensing agreement with Huawei would find many more takers if priced at US$5 million vs. US$5 billion. But given the investments (time and money) Huawei has already made in 5G, it’s likely that the vendor would be looking for something closer to the latter sum. And there are only so many companies who would be interested and able to pony up that amount of money.

Start-up 5G infrastructure players? The cost would be prohibitive.
Incumbent 5G infrastructure players? They aren’t exactly flush with cash and the marginal value of additional 5G assets would be questionable.
Webscale and enterprise players? This might make more sense: they’ve got money and 5G solutions could play into virtualisation and enterprise digital transformation trends.

But then there’s the question of future R&D.

If Huawei is only offering up its current patents, code and processes, any licensee would need to be ready to invest heavily in future development. Huawei will certainly be investing on this front; any third party products based on a Huawei license circa 2019 will quickly be uncompetitive without similar investments. This is probably the biggest sticking point in the plan. Given Huawei’s R&D scale, it’s unclear that a licensee could keep their offer competitive going forward. And if the goal is to assuage government fears over security, there’s no real assurance that Huawei won’t alter its code going forward in a way that isn’t transparent – or that third party licensees could be trusted.

Presumably, Huawei and its CEO know all of this and understand the slim odds of this actually moving forward. If so, then the licensing proposal needs to be looked at from a different perspective. Rather than looking at it as a clear, easy, workable solution, it needs to be seen as an attempt at a solution. It might not be a great (or even viable) solution, but it’s a signal that Huawei – in the middle of a seemingly intractable problem – is actively looking for ways to get past current trust concerns and potential geo-political technology splintering. That’s got to be worth something.

– Peter Jarich – head of GSMA Intelligence

The editorial views expressed in this article are solely those of the author and will not necessarily reflect the views of the GSMA, its Members or Associate Members.


Intelligence Brief:What will make 5G take off in LatAm?

[1]With 18 5G trials across the region to-date and a live 5G-ready network (Fixed Wireless Access) in Uruguay there is a fair amount of 5G activity in Latin America (LatAm). Despite these developments, the reality remains that LatAm will lag behind most regions in the world with a conservative 8 per cent adoption rate by 2025 (see chart above right, click to enlarge. Source: GSMA Intelligence. *Developing APAC excludes China).

LatAm is a large region with a mix of developing and developed markets that can behave as highly volatile economies. Thus, the future of 5G in this region will predominantly lie in the hands of its macroeconomic trends, the life that is still in 4G and the policies its governments set out to create opportunities for investment.

Macro impacts versus 4G
Stagnating economies and hyperinflation make it difficult to justify 5G investment.

Argentina saw a 27-year high inflation rate reaching 47.6 per cent in 2018, while in Venezuela hyperinflation will likely reach 10 million per cent by year-end 2019. Brazil seemed to be the poster boy for LatAm in the early noughties as a fast growing developing market, leading to a boom in foreign investments in the market. But limited progress in adoption of economic reforms caused a deceleration in the economy and slowdown in foreign investments.

These developments, together with mobile service and device taxation, represent a fair indication of consumer purchasing power. Income levels and affordability of newer (and 5G) devices will be likely hampered as a result. Current mobile device pricing as a percentage of GDP per capita is already high across the region, not only in the expected smaller countries but also in the larger economies. Whereas device cost as a percentage of GDP per capita lies at 0.1 per cent in UK and US for instance, it is 2 per cent in Bolivia and Brazil, and 1 per cent in Argentina.

There is still a lot of life in 4G – this is good news!

Whilst those macro impacts have partially resulted in slow LTE growth to-date (44 per cent adoption rate, Q2 2019), MNOs in LatAm are still working on network performance and deployment of 4G and 4.5G.

With 4G still growing, it will remain the dominant technology in the long-term (67 per cent by 2025) and until after 5G is launched. There is a gap of >10 percentage points between smartphone adoption versus 4G adoption rates (2019). This creates an upsell opportunity to operators especially now that 3G pricing has completely vanished from LatAm, allowing for 4G investments to be recouped over the next few years.

Spectrum, spectrum, spectrum – yes we need to talk about it!  
Ok, so 4G still has a lot going for it but we need more spectrum. With consumer readiness in place – nearly 90 per cent of mobile subscribers are mobile internet users – what is lacking is sufficient spectrum dividend per operator i.e. volume of MHz per operator. This remains low in LatAm, impacting network performance (up/download speeds).

With the ignition of 5G, governments and policy makers have the chance to reform policies and help foster investment and innovation in their markets.

To take an example from the largest economy in LatAm, spectrum dividend fares very low in Brazil with almost no change over the last four to five years, according to the Mobile Connectivity Index (MCI [2]). This has impacted network performance over time, keeping Brazil at an “emerging” market level in this category. Any upcoming auction will need to allow for sufficient spectrum dividend as well as consider auction fees and coverage obligations.

Vendors seek opportunities in Brazil
Brazil’s upcoming spectrum auction could potentially become the largest in the world: the national regulator (Anatel) is currently consulting on the 2.3GHz, 3.5GHz frequency tenders next March. There is speculation amongst vendors that 26GHz and 700MHz could be added to the same auction, making it the world’s biggest 5G auction to come. This not only would attract all eyes on Brazil but also could provide higher spectrum dividend per operator, allowing network performance improvements. Further testimony to vendor optimism is Huawei’s plan to invest in an $800-million-dollar factory in Brazil for the rollout of 5G.

With Brazil the obvious foster child, where else in the region can we turn to for opportunities?

Outside of the larger economies, in Peru 4G adoption rate is forecast to reach 73 per cent by 2025 and 4G availability[1] [3], measured by Open signal, shows an impressive reach in excess of 80 per cent. GSMA Intelligence forecasts show a fair growth for 5G by 2025 with 6 per cent adoption (with affordability of mobile services, relevance and availability of local content all faring well in Peru). Further, with growing competition operators have started investing in LTE-Advanced and the majority of upgrade deployments took place across 2018.

But where will 5G use case opportunities sit for LatAm?

5G use cases remain a significant discussion point across many major markets, with the top use cases evolving around enterprise, enhanced Mobile BroadBand (eMBB) and Fixed Wireless Access (FWA) in Europe, US, and China. In LatAm, two in particular could become successful.

Considering low fixed broadband penetration rates, FWA could take up well as it poses an opportunity to replace low bandwidth xDSL and in smaller range spaces, e.g. production plants and hot spots, as well as reach the unconnected.

Further, eMBB could make a good use case considering the high number of mobile internet users in the region as percentage of mobile subscribers, as discussed earlier. Additionally, per smartphone, Ericsson forecasts mobile data traffic growth of 481 per cent in LatAm to year 2024, reaching 18GB per month.

But what is indisputable for 5G success in LatAm is the need for adequate infrastructure, which includes sufficient spectrum as well as tax reforms to support 5G New Radio. Without that, 5G will be a 4G déjà vu.

– Armita Satari, Analyst – Core Mobile Research, GSMA Intelligence

The editorial views expressed in this article are solely those of the author and will not necessarily reflect the views of the GSMA, its Members or Associate Members.

[1] This is not equivalent to population penetration. Instead, Opensignal measures the real-world experience of consumers on mobile networks.


Intelligence Brief: Why nationwide fibre is the ‘backbone’ of India 5G aspirations

With India electing a new government to power, the vision of a Digital India has been given a renewed focus, but with more vigour. All stakeholders are now forging ahead to turn the dream of 5G by 2020 into a reality. Fibre backhaul, in particular, is expected to be one of the key enablers for 5G in India. Its deployment will remain critical to successful 5G rollout, but this journey will not be a smooth one.

As mentioned in an earlier blog  – Will India get 5G in 2020? [1] – the lack of required infrastructure is a major challenge to 5G rollout in India. To that end, it’s worth understanding the Indian fibre story to date.

Where does India stand today?
According to the National Digital Communication Policy 2018, India enjoyed 22 per cent of fibre coverage between the towers as of March 2018. In order to extend world class high-speed internet connectivity, around 75–80 per cent of mobile towers will have to fiberised; this is the case in markets like the US, China, and Japan. Even getting to a 60 per cent milestone by 2022 (which some consider the bare minimum for the satisfactory delivery of 5G) means there is clearly a long way to go.

[2]India’s leading telecom operators are committed to invest in fibre; Jio leads the pack followed by Vodafone-idea and Airtel. The government, in turn, has already taken initiatives (most notably BharatNet) to connect the deep rural pockets with fibre. Earlier known as National Optic Fibre Network (or NOFN), BharatNet was conceived with a specific aim to connect nearly 600,000 villages and eventually enable them with commercial internet access.

Evidently, efforts are being made, BUT…

Indian problems
While the necessity of fibre deployment for 5G is obvious, there is no shortage of challenges which will conspire to keep the pace of rollout slow: terrain hurdles, differing right-of-way norms across states, quality & maintenance issues. All of this is compounded by limited clarity on active network equipment sharing between the operators.

Of course, there’s also the issue of cost. Fibre deployment is expensive and comes on top of spectrum costs – which could be high given a mega 5G spectrum sale (275 MHz) coming up. And this is when Indian telcos are already saddled with a staggering debt of USD62 billion[1] [3] as of March 2019.

Clearly, the hurdles are there but as a worthy mind once said, “where there’s a will there’s a way.” And to find its way through these roadblocks, it’s time for India to look into a few nation-wide fiberisation models pursued across the globe and learn what can help India convert this digital dream into a reality.

Predominant models of fiberisation:
Based on research, predominantly five broad models of nation-wide fiberisation emerged across the globe. The models on the top of the chart below (click to enlarge) are considered more successful by some, as they mobilise public-private partnerships in such a fashion that they tend to be more conducive to faster and sustainable expansion of the fibre network to even the deepest pockets of the nation, yet remaining viable for operators to survive financially.


Unregulated Private investment: In this model, service providers are free to invest in fibre where they deem it profitable. There is little to no regulatory pressure to unbundle to competitors, and regulated prices are not enforced.
Incumbent-led, graded government support: In this model, the incumbent operator, usually still with a tangible government investment stake or a high level of influence, is mandated to roll out an extensive national fibre network. Public money is involved directly or indirectly, and some regulation is applied to create a competitive environment.
Private-led, graded government support: While similar to the above model, the government in this model distances itself from the incumbents. Importantly, the government drives and partially funds a national fibre agenda through all the players in the market.
Government-controlled fibre: In this model, the government takes a full hands-on approach to creating and, in some cases, operating a national fibre network. The agenda behind this is open digital economy, and the objective of policy and regulation is to openly offer and possibly transfer the infrastructure to the communication service providers in the country for commercial service operation.
Private investment with heavy regulation: With its focus on private investment, this model assumes strong competition and easy access to financing. Further, this model then applies open access and regulated price controls so that other, usually smaller, operators can offer services without the burden of heavy infrastructure investment. The intent is to induce considerable infrastructure competition that drives low prices for highly specialised services.

What makes sense for India?
For efficient asset management, Indian operators are already taking noteworthy steps to rationalise the capex required to lay fibre:

Bharti Airtel and Vodafone-idea have spun off their fibre assets to separate entities respectively, to monetise the fibre. They have also been discussing the potential to share their respective fibre networks by creating a joint venture.
Jio is in the process of demerging the fibre assets into a separate company which could then be monetised through an investment trust (InvIT) structure. As of now, they plan to keep the 15 per cent share while potentially selling the remaining 85 per cent to five global investors, including Qatar Investment Authority and Canada Pension Plan Investment Board.

While a case can be made for all the models in India, a “Private-led, graded government support” model suits the most. This resonates with the recent recommendation by TRAI (Telecom Regulatory Authority of India), especially for extension of internet and fibre networks to rural India. Subsequently, DoT has recently proposed to tie-up with the country’s three private operators to ensure connectivity to every India village. DoT plans to work with the private operators by providing 100 subsidies on Capex incurred on extending the connectivity to 43,000 disconnected villages, and have also agreed to subsidise the operating costs for the next five years.

Finally, to tackle the biggest bottleneck – RoW (Rights of Way) – the right policies for permits is a must. There should be cooperation between central and local authorities, where the centre could help in resolving issues like enforcing advance notification of civil works for infrastructure deployment (e.g. road, sanitation, energy, telecoms) and creating a single point of information for granting permits. The state government on the other hand should change its approach to take a proactive stance on dealing with the RoW issues and treat the RoW approvals as social-economic enablers instead of a direct revenue source.

Bottom line – A lot is being done to make 5G a reality, but adequate infrastructure remains the most essential piece of the puzzle in order to become truly ready. Hence, it is important for the operators to continue to invest in additional fibre deployments as building blocks for 5G.

– Aryan Jain – Research Manager, GSMA Intelligence

The editorial views expressed in this article are solely those of the author and will not necessarily reflect the views of the GSMA, its Members or Associate Members.

[1] [5] Source: Crisil


Intelligence Brief: Is AI on a slippery slope?

There is a strong case to be made that artificial intelligence (AI) is now the most central topic in technology. While the computer science that underpins AI has been in development since the 1950s, the rate of innovation has gone through multiple step changes in the last ten years.

The technological reasons for this are well understood: the advent of neural networks; an increase in semiconductor processing power; and a strategic shift away from AI systems that rely on parameter-driven algorithms towards self-reinforced and multiplicative learning, machines that get smarter the more data they are fed and scenarios they negotiate.

Development has been open and collaborative. The benefits of AI in process efficiency and, potentially, accuracy are clear. For this reason, R&D activity, pilots and commercial deployments stretch to virtually every sector of the economy from healthcare to automotive manufacturing to telecom networks. A recent Vodafone survey indicated a third of enterprises already use AI for business automation, with a further third planning to do so. Take-up on this scale, at this rate, could put AI on a level with prior epochal shifts of electricity, the combustion engine and personal computing.

Two sides to each coin
Whether that actually happens depends on how the technology is managed. I spend a lot of time talking with major telecom and technology companies. While it’s clear AI is a major point of interest to nearly everyone, the discussion is still pitched in generalities. Paraphrasing:

AI is the Fourth Industrial Revolution
We know AI is big and we want to do something with it, but we don’t know what
We’re moving to be an AI-first company
How can we win with AI?
We’re a far more efficient company because of AI
The ebullient tone is to be welcomed.

Far less talked about, however, are the ethical and legal implications that arise from trading off control for efficiency. It’s fairly clear that cognitive dissonance is at work – the benefits blind us to the risks.

How do you answer these?

A crucial faultline is the balance between programmed and interpretive bias. That is to say, how much are machines programmed to act based on the way humans want them to act (reflecting our value sets) versus their own learned ‘judgement’? This has a direct bearing on accountability.

To make this point, let’s pose a series of questions that draw on how AI is being used in different industries.

Autonomous vehicles
If a self-driving car faces the inevitability of a crash, how does it decide what or who to hit? If that same self-driving car is deemed to be at fault, who bears responsibility? The owner? The car manufacturer? A third-party AI developer (if the technology was outsourced)?

Criminal justice
If an algorithm is tasked with predicting the likelihood of reoffending among incarcerated individuals, what parameters should it use? If that same algorithm is found to have a predictive accuracy no better than a coin flip, who should bear responsibility for its use?

Social media
If Facebook develops an algorithm to screen fake news from its platform, what parameters should it use? If content subsequently served to people’s news feeds is deemed intentionally misleading or fabricated, does responsibility lie with the publisher or Facebook?

I chose these for a number of reasons. One, these are real examples rather than hypothetical musings. While they emanate from specific companies, the implications extend to any firm seeking to deploy AI. Second, they illustrate the difficulty in extracting sociological bias from algorithms designed to mimic human judgement. Third, they underline the fact that AI is advancing faster than regulations and laws can adapt, putting debate into the esoteric realms of moral philosophy. Modern legal systems are typically based on the accountability of specific individuals or entities (such as a company or government). But what happens when that individual is substituted for an inanimate machine?

No one really knows.

A question of trust
Putting aside the significant legal ramifications, there is an emerging story of the potential impact on trust. The rise of AI comes at a time when consumer trust in companies, democratic institutions and government is falling across the board. Combined with the ubiquity of social media and rising share of millennials in the overall population, the power of consumers has reached unprecedented levels.

There is an oft-made point that Google, Facebook and Amazon have an in-built advantage as AI takes hold because of the vast troves of consumer data they control. I would debunk this on two levels. First, AI is a horizontal science that can, and will, be used by everyone. The algorithm that benefits Facebook has no bearing on an algorithm that helps British Airways.

Second, the liability side of the data equation has crystallised in recent years with the Cambridge Analytica scandal and GDPR. This is reflected in what you might call the technology paradox: while people still trust the benevolence of the tech industry, far less faith is placed in its most famous children (see chart, below, click to enlarge).

[1]In an AI world, trust and the broader concept of social capital will move from CSR to boardroom priority, and potentially even a metric reported to investors.

This point is of heightened importance for telecom and tech companies given their central role in providing the infrastructure for a data-driven economy. Perhaps it is not surprising, then, that Google, Telefonica and Vodafone are among a vanguard seeking to proactively lay down a set of guiding principles for AI rooted in the values of transparency, fairness and human advancement. The open question, given the ethical questions posed above, is how actions will be tracked and, if necessary, corrected. Big questions, no easy answers.

– Tim Hatt – head of research, GSMA Intelligence

The editorial views expressed in this article are solely those of the author and will not necessarily reflect the views of the GSMA, its Members or Associate Members.