BT and Vodafone duel for 5G first mover advantage in the UK

In the UK, the first mover advantage in 5G goes to BT’s EE mobile unit and to Vodafone, though the other two MNOs will follow close behind. Vodafone said last week that it would go live on July 3 in selected areas of seven cities, with 12 more to come by year end. EE followed up with its own date, stealing a march on its rival by saying it would turn on commercial services in six cities on May 30, with 10 more to follow later in 2019.

Telefónica O2 and Hutchison Three have both pledged to launch their first services in the second half of this year. However, as in many European countries, there is likely to be a significant lag between operators putting up a few 5G base stations in crowded areas of affluent cities, and demonstrating significant investment in wider availability of the services, in a full 5G core, and in new enterprise-focused applications. There are question marks, in particular, over O2 and Three in this regard. Telefónica has been keen to offload its UK arm, though the proposed sale to Hutchison was blocked by the competition regulator, and its 5G priorities are clearly elsewhere.

The initial cities for EE are the four regional capitals (London, Cardiff, Edinburgh and Belfast) plus Birmingham and Manchester. Customers can already pre-order bundles and devices, including the Samsung Galaxy S10 5G, Samsung Fold, Oppo Reno 5G and LG V50 ThinkQ, as well as Huawei’s fixed wireless device and the HTC 5G Smart Hub. Marc Allera, CEO of EE, said that there would have been a Huawei smartphone (the Mate 20X) on the list too, but the operator has been forced to hold fire on that until it has clarity on the future of Huawei’s Android platform. The Google bar on the Chinese firm using its Android services, such as the Play Store and search, would restrict the user experience if a compromise is not found (see separate item). Vodafone has also announced a “temporary” suspension of pre-orders for Huawei handsets, “while uncertainty exists”.

Of course, EE’s relationship with Huawei has featured in the headlines before. BT has worked extensively with the vendor in its 5G trials and has lobbied the UK government not to restrict operators’ choices by barring Chinese suppliers from 5G networks, as the USA has pushed its allies to do. It went as far as to say that Huawei was the only supplier offering ‘true 5G’ today. However, EE has been stripping out its Huawei core to bring it into line with its parent’s policy of using Chinese suppliers in access but not core networks. It appears that the government will take a similar line, leaving the MNOs free to make any choice of 5G RAN vendor, but restricting use of Chinese technology in the core, where the supposed security risks would be focused.

Asked by Light Reading about Huawei’s future role in the RAN, Allera said: “At the moment, we have no instructions to change plans, but it is important to say that we have a multivendor policy and architecture that we are rolling out and our core and RAN will be made up of a number of providers. Huawei is a part of that but not the only part.”

Working with multiple suppliers, EE plans to upgrade 100 base stations a month to 5G, making a total of 1,500 by the end of this year. Newer ones will have been implemented in a ‘5G-ready’ state, which can be upgraded from LTE largely in software; older ones will need to be replaced by multimode systems.

BT set out a three-phase roll-out plan. The first will last until mid-2020, at which point it aims to have 5G available in 50 cities, though only in selected areas (the busiest ones where LTE is struggling to keep up by itself). By this time, 8% of EE’s base stations will support 5G, and they are expected to deliver 25% of EE’s total traffic despite the limited geographic coverage.

Like all operators, EE will initially launch 5G New Radio Non-Standalone (NR NSA), which uses the 4G core network. However, it is moving more quickly than many of its counterparts in developed markets to the Standalone version, with a 5G core, perhaps because it is having to rework its core network anyway because of the Huawei situation. It plans to start rolling out the 5G core in 2022 as well as adding new spectrum including 700 MHz.

The final phase, starting a year later, will see the addition of ultra-low latency and mission critical capabilities to support a new range of enterprise, IoT and critical communications services.

But like most MNOs, the first focus will be on enhancing performance for existing customer groups and use cases. “Today is Day One of our 5G journey, we are going to be the first in the UK and one of the first in Europe to bring our customers 5G,” said Allera. He said the marketing of the new service would focus mainly on reliability and consistency rather than peak speeds, though the aim is to support a maximum of 200Mbps. “Peak speed might be the headline, but it is not the story,” he said.

For consumers, EE will offer a range of zero-rating options and some exclusive content partnerships, particularly with Niantec for the forthcoming augmented reality game, ‘Harry Potter, Wizards Unite’.

Another important aspect of BT/EE’s messaging and differentiation is the convergence of its fixed and mobile networks, plus its extensive in-home and public WiFi assets, to support a wide range of services, and the widest coverage in the UK, cost-effectively. BT is moving quite quickly from having two separate networks (having re-entered the mobile market when it acquired EE three years ago), to a fully converged platform in which fixed and mobile connectivity complement one another – for instance, 4G devices are offered as back-up if a fixed line fails. In time, a converged 5G core could allow the operator to manage and allocate all its network assets dynamically, treating them as a single pool of capacity, and to enable network slicing, something which BT has trialled extensively.

Meanwhile, Vodafone UK was scheduled to have its own informal media launch event the day after EE’s, but cancelled it at the eleventh hour.