In the run up to the Total Telecom Congress 2019 in London this month, we caught up with Stephen Lerner, general counsel at Three to understand the key challenges that telecoms operators are facing in the UK
Three launched 5G in August and is looking to scale up its initial launch to 25 towns and cities across the UK by the end of the year. How is that going?
Our 5G rollout continues to gather momentum following a successful launch in London this summer with a home broadband service using our 100MHz of contiguous 5G spectrum. We have demonstrated that we are a serious player in 5G and are building a true 5G network.
We are aiming to launch in 25 cities by the end of the year. Our focus is on providing an excellent service to our customers. This is about getting it right in the long run.
We are not standing still: customers are already enjoying Three’s real 5G with the launch of our 5G home broadband service, the roll out is ticking along nicely and we have made good progress with updating our 4G network.
How important is fibre access for UK MNOs as they look to rollout 5G? How good are fibre access levels in the UK at the moment?
Fibre access is vital to all network operators, and simply put, access levels are still far from good enough. BT Openreach does not provide dark fibre on a commercial basis, and nor does Virgin. Dark fibre providers (like Cityfibre) focus on specific towns and cities and do not yet have a nationwide network.
Ofcom has made some positive moves by opening access to BT ducts and poles for other operators to lay their own fibre cables. Access to BT’s underground tunnels and telegraph poles from Aug 2019 will level the playing field and could substantially reduce the cost of deploying fibre. Virgin Media, Vodafone, CityFibre and TalkTalk have all announced plans to deploy full-fibre networks. This is a very positive development that will reduce the UK’s reliance on the Openreach network.
We are concerned, however, that dark fibre may not be available in parts of the UK where rollout by dark fibre providers is unlikely (for instance, areas which remain BT/Virgin-only). At a time of such enormous advancement and transformation in mobile networks, Ofcom needs to ensure that regulation around vital infrastructure can keep pace and dark fibre is available (on a commercial or regulated basis) throughout the country.
What are the main obstacles to getting access to fibre in the UK? Should Ofcom be forcing Openreach to open up its dark fibre to other players?
The main obstacle to date has been the large cost of deploying fibre networks. Opening up BT’s underground ducts can significantly reduce the cost and time it takes to lay new fibre. We are however concerned that rival fibre networks will not be available in large parts of the country where fibre rollout will remain uneconomic (for instance, BT/Virgin only areas). Ofcom needs to ensure that regulation around vital infrastructure can keep pace and dark fibre is available (on a commercial or regulated basis) in those areas as well.
How good a job is the UK doing of making 5G spectrum available?
Ofcom is committed to releasing 5G spectrum for mobile. Ofcom auctioned the 3.4 GHz band in 2018 and plans to release further 5G spectrum (700 MHz and 3.6 GHz) through auction in Spring 2020. Ofcom has yet to publish its plans for the release of some 26 GHz spectrum for mobile but we expect those plans to be announced soon.
Ofcom is looking at options for defragmenting the C-Band (3.4-3.8GHz spectrum). As the only MNO with a contiguous 100MHz block of 5G spectrum, how would these plans affect you?
Through its acquisition of UK Broadband and participation in the 2018 5G auction, Three has invested hundreds of millions of pounds in 3.4-3.8GHz spectrum (including paying significant sums for specific frequencies in our preferred location within the band). We are now deploying bespoke equipment operating on those specific frequencies to offer 5G services to UK consumers.
Nonetheless, Three set up a trading process to allow other the operators the opportunity to secure frequencies at their preferred location in the band. BT and Vodafone decided not to participate and O2 actively sought to disrupt the process.
Three remains open to trading and to participate in a voluntary trading process and supports Ofcom’s proposal to hold a negotiation stage in the 2020 5G auction. This will enable other operators the opportunity to secure contiguous blocks in the band.
We haven’t auctioned off any mmWave spectrum yet – how much of a gamechanger is that going to be?
Three is the only UK operator to have extensive holdings of mmWave spectrum, both in the 28GHz and the 40GHz band. The 40 GHz band is expected to become a global band for 5G at the World Radio Conference in November 2019. We have exciting plans to use this spectrum to provide ultra-fast 5G services to our customers.
We are currently exploring the full potential of our mmWave spectrum in a 5G Home Broadband trial. We want to understand the speeds and latency that customers can expect from our 5G mmWave service, and how far the coverage footprint will extend.
The large bandwidths available could be a gamechanger for both home broadband and mobile 5G networks in the UK. In the hands of the UK’s market challenger, our unrivalled mmWave portfolio has the potential to bring much faster and more reliable 5G connections for UK consumers.
How good a job is Ofcom doing of managing the cost of spectrum at auction? Are they at risk of over egging the pudding?
Ofcom has resisted the temptation of designing spectrum auctions in a way that extracts maximum revenue from operators. Ofcom understands that the key objectives in an auction are to maintain a competitive market and achieve an efficient allocation of the spectrum, not maximize proceeds to the Exchequer. There have been recent instances in other jurisdictions (e.g. Italy’s 5G auction) where this has not been the case, and the auction has been designed to create artificial scarcity and extract the largest possible revenues from operators.
How big is the issue of site access?
Operators are currently upgrading thousands of sites in the UK to 5G technology. This requires reinforcing mast structures and deploying new 5G antennae and equipment on those sites. 5G will bring much faster, more responsive mobile connections to UK consumers. To stay in the 5G race, the UK needs to remove barriers to the deployment of 5G technology and reduce the risk and cost of rolling out this critical national infrastructure.
Government is proposing to allow operators to increase the height and width of existing masts (and to install and upgrade rooftop sites) with no requirement for prior approval from local authorities. These much-needed reforms will expedite the pace of 5G rollout and allow UK consumers to enjoy the full benefits of 5G sooner.
It is also important that operators can access and upgrade sites to 5G technology without being held ransom to extortionate rent increases from landowners in contravention of the spirit and intent of the recently amended Electronic Communications Code. Unfortunately, some landowners are trying to frustrate the law by blocking our access to sites unless such rental increases are agreed. We find ourselves before the courts with increasing frequency. This leads to significant delays in rolling out 5G for the benefit of UK consumers.
Is the government doing enough to incentivise landlords to grant access to sites?
We have asked Government to issue guidance on the proper interpretation of the new Code rights, to prevent unscrupulous landlords from seeking to extract rents from operators when a site needs to be upgraded to 5G.
The Total Telecom Congress will return on the 29th and 30th October inLondon. Click here to find out how you can be a part of the show.