France and Germany have taken contrasting approaches to 5G spectrum so far. Germany was quicker to kick off auctions and its regulator, BNetza, took the radical steps of earmarking some airwaves for private industrial use, to the chagrin of the MNOs, which claim this strategy has inflated spectrum prices and made it harder for them to meet the coverage obligations that go with the operator licences.
By contrast, French regulator Arcep said earlier this year that it had seen no demand for private spectrum for France’s industries, and that the goals of enterprise 5G would be better served by cooperation with the MNOs. But Arcep, announcing its 3.4-3.8 GHz auction rules last week, has made some unusual steps of its own to encourage industrial applications in the new wireless networks, including making network slicing a licence condition.
This highlights the two main routes by which the rarefied and diverse requirements of enterprise and the Internet of Things could be supported, in a market where MNOs’ business models have always revolved around a common generic voice and data network. That will not suffice for many industries which need connectivity that is fully optimized for their particular needs, whether those are ultra-low latency, high security or reliability, or massive device density.
One solution is to rely on private networks, and these are already growing rapidly in 4G. Some operators build and run private networks for enterprises themselves, separate from their main RANs and often with localized cores; but this can also be done by neutral hosts or vertical-specific integrators, in leased, shared or unlicensed spectrum.
The other solution is for the MNO to build a fully sliceable network, with separate virtual sections dedicated to, and optimized for, certain use cases, industries or users. This has the advantage of scale and flexibility, harnessing cloud platforms to support any number of different and changing requirements in an agile way. When these solutions mature, they could transform the 5G business case for operators and address the qualms that enterprises have about the quality of cellular networks for their purposes.
But even simple slicing – which involves carving the network into just three or four sections and keeping them quite static – is rarely achieved from end-to-end (only with upcoming Release 16 3GPP standards will the 5G radio be fully sliceable in a standards-based, interoperable way). And there are other challenges, such as how a multinational enterprise negotiates a deal for a cross-border end-to-end slice, given that most operators are not global.
So the auction policies may be premature. The rules require that operators activate network slicing by 2023, which is an ambitious timeline (depending how slicing is defined by the regulator), as well as coming close to breaking the modern norm of keeping auctions technology- and service-neutral.
Other rules require that each MNO must launch 5G services “in at least two cities before the end of 2020”, and there will be a “concomitance mechanism to ensure that non-urban areas will also benefit from these roll-outs”.
After that, each licensee will be required to deploy the following numbers of sites in 3.4-3.8 GHz:
- 3,000 sites in 2022
- 8,000 sites in 2024
- 10,500 sites in 2025.
Other conditions are that, by 2022, at least 75% of cell sites must deliver speeds of at least 240Mbps at each site, and this will be applied progressively to all cell sites in the period to 2030.
Operators also have obligations for ensuring coverage of the country’s motorways by 2025 then, by 2027, coverage of the main roadways.
Licences will be allocated for 15 years, which will be extended by a further five years if operators agree to all the conditions. Two interim reviews are scheduled for 2023 and before 2028 to verify operators’ implementation of their obligations.
Arcep also wants to make it mandatory for mobile networks to be IPv6-compatible.
The specifications contain a set of optional commitments. A maximum of four companies that make all these commitments will be able to obtain blocks of 50 MHz of spectrum:
- To boost non-telecoms sectors of the French economy, Arcep has established an unprecedented mechanism that would have operators commit to granting reasonable requests from businesses, cities and others, to provide them with customized coverage and performance (presumably using the slicing) or, if the operator prefers, by assigning its frequencies locally.
- Improved indoor coverage for business and commercial purposes, and to facilitate coverage by multiple operators.
- Supply of dedicated fixed access products on mobile networks.
- Increased operator transparency, on their roll-out forecasts and service outages.
- Improved MVNO hosting on operators’ 5G networks, in particular to stimulate innovation from all the sector’s players.
Meanwhile, France’s Agnès Pannier-Runacher, secretary of state to the Minister of Economy and Finance, followed the Arcep announcement with proposals for spectrum pricing. She said the reserve price for 5G spectrum should start at €2.17bn. She proposes that each of the countries’ four operators buy a first block of 50 MHz in the 3.5 GHz band for 350m, telling Les Echos that the price is “reasonable” since it is about half what the German MNOs paid for the same amount of midband spectrum. After this, the remaining 110 MHz will be auctioned in 10 MHz chunks, starting at a price of $70m each. By close of the two-part auction process, the maximum spectrum holding that an operator can have will be set at 100 MHz.
These recommendations are still to be approved by the government.
In Germany, where 100 MHz has been set aside for localized use by enterprises, Bosch has become an early applicant. It aims to establish campus networks in its own spectrum and is currently conducting trials in various plans, and in its R&D campus in Renningen.
BNetza has allocated spectrum in 3.7-3.8 GHz with frequencies allocated on a 10-year license, according to demand, with preference going to Industrie 4.0 or agricultural and forestry applications.
Japan has also been allocating spectrum for private 4G and 5G networks. Last week, Nokia announced an alliance with Hitachi to supply equipment for these networks. The Finnish vendor is the most active of the OEMs in building platforms to enable enterprise and private cellular, and now has its eye on the hoped-for boom in Japan.
Nokia’s Digital Automation Cloud (DAC) platform will be used to support applications such as video analytics, artificial intelligence, machine learning and IoT, as well as drones, group communication and autonomous transport vehicles in factories, utilities, airports and ports.