Towards the successful deployment of 5G in Europe:
What are the necessary policy and regulatory conditions
Professor Martin Cave
Professor Wolter Lemstra
Professor Marc Bourreau
Joint Academic Director, CERRE
Research Fellow, CERRE
Joint Academic Director, CERRE
Professor, Imperial College
London
Associate Professor, Nyenrode
Business Universiteit
Professor, Telecom ParisTech
1
Agenda
I.
II.
III.
IV.
Introductions
Positioning of the research project
Background and precursors
Two possible futures and their policy and regulatory
challenges
V. Questions for clarification and discussion
2
Agenda
I.
II.
III.
IV.
Introductions
Positioning of the research project
Background and precursors
Two possible futures and their policy and regulatory
challenges
V. Questions for clarification and discussion
3
Agenda
I.
II.
III.
IV.
Introductions
Positioning of the research project
Background and precursors
Two possible futures and their policy and regulatory
challenges
V. Questions for clarification and discussion
4
Positioning
• The research question – alternative title of the report:
5G: Just another generation of mobile
communications technology?
• What about the statements from the policy arena:
– European leadership in 5G?
– Serving industry verticals?
5
Traditional View
Generation
Introduction
Standard
Technology
Data rates
1G
e1980s
NMT/TCAS/…
Analogue/Circuit
NA
2G
e1990s
GSM
Digital/Circuit->Pct
170 kbit/s
3G
e2000s
UMTS
Digital/Circuit/Packet
7 Mbit/s
4G
e2010s
LTE
All-IP
26 Mbit/s
5G
e2020s
FPLMTS
All-IP
50 Mbit/s
6
5G Design Objectives
High-end for Humans:
• 20 billion terminals
• Guaranteed 50 Mbit/s
• Groundspeed 500 km/hr
Low-end for Machines:
• Over 1 trillion terminals
• 100-500 kbit/s
• Low power
• Aggregate service reliability > 99.999%
• Accuracy of outdoor terminal location < 1 m
1000x capacity increase (METIS 2012):
–
–
–
–
Network densification, 50x
More spectrum incl. mmWaves (60-80 GHz), 10x
Improving spectral efficiency, 2x
Consistent with: Doubling every 3 years - last 30 years
7
5G Introduction
3GPP Rel-14
June 2017
March 2015
5G 3GPP:
• Formal start RAN study December 2015
• Functionally frozen specs December 2019 => ITU-R WP5D June 2019
• Final specification February 2020 => ITU-R WP5D Oct 2020
Source: Nokia (2015); 3GPP (2016)
March 2016
8
Alternative View
Introducing the IT-cloud into the CT-world
9
CT-cloud?
Operator
back-office
IT
Computing
=
?
Routing
CT
Source: AT&T (2013; 2014; 2016)
10
AT&T: imperative
11
Positioning
•
The research question – alternative title of the report:
5G: Just another generation of mobile communications
technology?
The answer: YES and NO
• Depending on your perspective and objectives
– being an incumbent operator, potential market entrant, vertical industry firm, policy
maker, end-user…
• Therefore we belief a debate on the most desirable future is required
– being informed by two contrasting images of the future
12
Images of the future
Evolution
Image
• Improving the internal
business based on
virtualization
• Benefiting from enhanced
capabilities of 5G
• Mass consumer market as core
business
• Pressure on margins remains
Revolution
Image
• Unlocking verticals by opening the
market to Virtual Mobile Network
Operators (VMNOs) at retail level
using open APIs
• Improving the internal business
based on virtualization
• Benefiting from enhanced
capabilities of 5G
• Differentiated services leads to
13
higher willingness to pay
Images of the future
Evolution
Image
• 5G Leadership is about
enabling mobile
communications growth by:
– Timely introduction
– Fast roll-out
– EU-wide deployment
Revolution
Image
• 5G Leadership is about enabling
economic growth by unlocking
verticals through:
– Leveraging insider knowledge
– Across all verticals
– Simultaneously
•
VMNOs: Divisions of MNOs, internal ICT
departments; specialized ICT services firms,
14
start-ups,
Research Approach
Exploring European leadership:
• Assessment GSM success factors
• Identification regularities 1G-5G
• Transposition over time and
industry settings
Exploring virtualization:
• Assessment cloud-based IT services
• Assessment transformation of IT
data centres
• Appreciation SDN and NFV
technologies
• Assessment regulation of the Cloud
Exploring policy and regulatory implications:
• Development of two images of the future – at the extremes of the spectrum:
“Evolution” and “Revolution”
• With the related policies and regulatory actions for each image
15
• To serve as input for discussion on the most desirable future outcome
Agenda
I.
II.
III.
IV.
Introductions
Positioning of the research project
Background and precursors
Two possible futures and their policy and regulatory
challenges
V. Questions for clarification and discussion
16
The success of GSM as precursor
The facts:
• Commercial launch in 1991
• Peak of deployment in 2015:
3.83 billion subscribers
• 700 operators
• 219 countries and territories
Source: GSMA (2016)
The perceived success factors:
• Outcome of industrial policy
• From national to European standard
• European-wide roaming
• From analogue to digital technology
• Unlocking the consumer market
• From ‘brick’ to ‘handy’
• Wide adoption outside Europe
17
Virtualisation as precursor
Source: AT&T
(2013; 2014;
2016)
18
Agenda
I.
II.
III.
IV.
Introductions
Positioning of the research project
Background and precursors
Two possible futures and their policy and
regulatory challenges
V. Questions for clarification and discussion
19
Possible futures and their policy and regulatory challenges
Starting points:
• Observed regularities: Europe is ‘on-path’ for 5G
• Policy option: Unlock verticals through virtualization as part of Industry 4.0
“Evolution” image:
“Revolution” image:
•
•
•
•
•
•
•
•
•
EU policy: Elec. Coms. Code
Consumer market plus verticals
Private use of virtualization
EU policy: Unlock verticals (Industry 4.0)
Verticals plus consumer market
Virtualization to enable horizontal market
Unlocking industry willingness-to-pay
Enabling service differentiation, incl. QoS
To stimulate investments in 5G as result
Socio-economic dimension (Porter-Wheelen framework):
• As context sketch for the mobile industry scenarios
20
Possible futures and their policy and regulatory challenges
Enabling “R/Evolution” image:
• Availability of new radio
spectrum – 11 bands identified:
–
–
–
–
–
–
–
–
–
24.25 GHz – 27.5 GHz
31.8 – 33.4 GHz*
37 – 40.5 GHz
40.5 – 42.5 GHz*
47 – 47.2 GHz*
40 GHz three bands
50.4 – 52.6 GHz
66 – 76 GHz
81 – 86 GHz
Radio spectrum management:
• New spectrum introduced into the
market as and when available:
•
•
•
•
•
– 700 MHz
– 3400 - 3800 MHz
Existing licenses made technology
neutral
Band usage for 5G essentially MNO
decision
Spectrum bands above 6 GHz more
fragmented globally
License shared access
License assisted access
21
Possible futures and their policy and regulatory challenges
Enabling “R/Evolution” image:
• Adapt net neutrality rules to
accommodate:
– PPDR (from LTE to 5G)
– Service differentiation for
Verticals
Net neutrality:
• Protection of the ‘best effort’ lane
• All traffic to be treated equally
• Economic trade-off: strict vs more open
• LTE/5G: Network slicing
• Non-homogeneous services
– Requiring different ‘lanes’
 All 5G services to be Specialized Services?
 When network capacity is sufficient?
 The specific level of quality to be specified?
22
Possible futures and their policy and regulatory challenges
Enabling “R/Evolution” image:
• Coverage
Indoor access:
• Avoid access bottleneck
– Compare in fixed ‘mutualization point’
• Potential solutions:
– Use of Distributed Antenna Systems
– Use of ‘Neutral host’
• Requires collaboration MNOs:
– Successful private coordination in UK
– Slow progress in NL: SIG as part of BTG
23
Possible futures and their policy and regulatory challenges
Enabling “Evolution” image:
• EU policy: Elec. Coms. Code
• Consumer market plus
verticals
• Private use of virtualization
Policy and regulatory implications:
• Monitor for negative impact on
competition from tying and closed APIs
• Stimulate spectrum sharing
• Stimulate network sharing
• Improve secondary market for spectrum
• Re-look at coverage obligations for
ubiquitous coverage
• Address data protection and privacy in
context IoT
24
Possible futures and their policy and regulatory challenges
Enabling “Revolution” image:
• EU policy: Unlock verticals
• Verticals plus consumer market
• Virtualization to enable
horizontal market
• Unlocking industry willingnessto-pay
• Enabling service differentiation,
incl. QoS
• To stimulate investments
Policy and regulatory implications:
•
•
•
•
•
•
•
•
•
•
Recognize the innovative nature verticals
Apply regulatory constraint
Be prepared to facilitate/guide the market
Enable VMNOs: use experience MVNOs
Assure standard+open APIs across Europe
Facilitate implementation of APIs: SDKs,
use certification experience
Assure seamless operation, re OAM
Assure dynamic retail market: stimulate
retail-level entry
Assure collaboration for national coverage
Support multiple VMNOs on single device
25
Possible futures and their policy and regulatory challenges
Enabling “Revolution” image:
• EU policy: Unlock verticals
Enable VMNOs across all industries –
simultaneously:
1. Implies leveraging industry knowledge
–
–
–
–
2.
Source:
Computaris
(2012)
Internal ICT departments of vertical firms
Specialized ICT service providers to verticals
Specialized divisions of MNOs
Start-ups
Leveraging experience obtained with
MVNOs
– Europe has largest MVNO market
– Norway, Denmark, Germany, Belgium > 15%
– Case Hong Kong (40% of capacity)
26
Possible futures and their policy and regulatory challenges
Enabling “Revolution” image:
• EU policy: Unlock verticals
• Enable VMNOs across all
industries – simultaneously:
– Stimulate retail level entry
– Create level playing field
• Recognize the innovative nature of
serving verticals
– Apply regulatory restraint
• If all else fails use experience fixed BB:
– Functional separation as ‘last resort’:
– Case BT v. Ofcom; TP v. UKE; Telecom
Italia v. AGCOM; TeliaSonera v. PTS; O2 in
Czech Republic
– Ongoing debates (UK) raise the question
whether structural separation is needed
27
Possible futures and their policy and regulatory challenges
Enabling “Revolution” image:
• EU policy: Unlock verticals
• Enable VMNOs across all
industries – simultaneously:
– Application of 5G
standard releases
– Application open APIs
• Standardized radio part: 5G (3GPP ongoing)
– EC Mandate not required
•
Application of 5G standard core
– EC Mandate not required (unlike 2G)
• Uniform and open APIs (3GPP/ETSI)
– Part of 5G standard releases
– EC Mandate as ‘last resort’
• Application of uniform APIs
– Result of competitive market place
– EC Mandate as ‘last resort’
• Certification strongly recommended
– Use field experience (e.g. Wi-Fi) 28
Agenda
I.
II.
III.
IV.
Introductions
Review and goals of the report
Background and precursors
Two possible futures and their policy and
regulatory challenges
V. Questions for clarification
29