Orange puts industrial services first in its 5G plans

The French government recently decided not to follow Germany’s lead and reserve some spectrum within the 3.5-4.2 GHz range specifically for industrial use. But while a minister said in an interview that there was “not yet a very clear demand from industrialists” for their own spectrum, there is clearly a demand for 5G that is tailored to their requirements.

France Industrie, the country’s association of large companies, is calling on Stephane Richard, Orange’s CEO, to commit to building a 5G network that covers all the industrial zones in France. And Orange itself has said it expects the 5G build-out to be very different from that of 4G, with far more investment being targeted, in the first phase, at business-to-business services and the IoT.

Germany decided to earmark spectrum for industrial use and offer it at competitive rates, to the consternation of the country’s three large MNOs. This came after intensive lobbying by the Industrie 4.0 community, particularly by automotive firms and other manufacturers.

But in France, Agnes Pannier-Runacher, secretary of state to the minister of economy and finance, recently said there was no clear demand for private 5G spectrum among industrial firms, and so the upcoming 5G auction will offer four nationwide exclusive licences, which will almost certainly be affordable only by the four MNOs.

Some of France’s substantial cohort of large industrial companies are getting concerned about how far the 5G networks will suit their needs. Carmaker Renault and rail operator SNCF told a recent conference in Paris, hosted by Orange, that, if deployed right, 5G could be a major boost to their efficiency, productivity and competitive advantage.

Guillaume Pepy, the president of SNCF and chairman of the Eurostar cross-Channel rail company, said 5G allow the number of trains running on French tracks to be increased by 45% without putting safety at risk. SNCF is already planning to increase the numbers running between France and Lyons by 20%, using 5G-based monitoring systems so that trains can run more closely together.

But such gains will only be made if the 5G networks cover the right areas of the country, and support the right capabilities to suit industrial and transport, not just consumer broadband, use cases. Philippe Varin, president of France Industrie, said at the conference: “We have spoken to Stephane [Richard] and we need massive deployment that covers the whole French territory. We need to scale this up depending on requirements and that means 136 industrial territories all need to be covered. There needs to be a clear roadmap drawn up with the government.”

Pannier-Runacher said coverage and service quality commitments would be included as obligations in the forthcoming auction. “We need to be ahead of the curve and make sure we can talk about business models of the future right away,” she said. “We need to mobilize industry. There will be some reluctance and we have to work on that.”

Yet many operators plan to build 5G, for the foreseeable future, in hotzones where there are particularly high rates of mobile data usage, keeping 4G as the coverage network (and in many countries, in reality, 2G is still the only ubiquitous coverage technology).

Truly universal LTE coverage with 5G hotzones might support most industries, provided those 5G zones were located in areas of heavy usage by key vertical sectors – which do not necessarily map to areas of heavy general mobile broadband traffic. Large factory sites are rarely in city centers, for instance, which is why large manufacturers are interested in private sub-nets to cover their industrial campuses. For many low power IoT applications, the coverage network could be based on 2G, enhanced with the new E-GPRS standard; or an unlicensed option like LoRA; or NB-IoT (or combinations of the above managed by a common virtualized core).

But when it comes to rail, road and sea transport, there are some applications in which these sectors are very interested, which do require 5G everywhere for extremely high availability (safety-critical) and low latency. High quality broadband and IoT systems along railways and roads would transform the business model of many sectors including the railways themselves, freight carriers, logistics firms and so on. But the investment in these systems is huge, requiring operators to reach areas which they have never found cost-effective to do before, and access infrastructure in rural areas, or owned by entities such as railway companies.

Many countries, especially those with extensive rail networks like France, are looking at how to address this issue and finally mobilize their transport grids. Co-investment by the government, or the railways and highways agencies, or by interested private sectors like freight, could all be options, since a shared network is almost inevitable in these scenarios.

A neutral host model seems logical, whatever the source of funding, and a few service providers are starting to look at how that might work in the case of transport. In Japan, for instance, Japan Rail is a significant co-investor in 4G and 5G expansion, and one of the ways the MNOs line up against one another in marketing campaigns is to quote their unbroken call record on the super-high speed Shinkansen trains.

In the UK, one of the government-backed 5G testbeds was based on a neutral host small cell network deployed along a high speed car testing track, with technology and business model that could be applied to railways too. One of the partners was DenseAir, the subsidiary of small cell vendor Airspan which is acquiring spectrum in various markets in order to build out neutral host networks in areas which the MNOs find hard to cover cost-effectively themselves, such as roadsides.

Orange and the other French MNOs may find it hard to fund a full rail and road deployment themselves in the first years of 5G, but the incumbent telco is certainly acknowledging that, unlike many operators, it will not only prioritize traditional MBB and consumer services in the first phase of 5G.

Richard said Orange is already partnering with SNCF and with manufacturers like

Renault, Schneider Electric and Lacroix Group, and also exploring possible “co-construction” options. He said the first Orange 5G services, due later this year, would not be commercial but would be focused on industrial environments and used to test different use cases and business models with enterprise partners.

He said: “This is something we have to do together … Rolling out 5G in full will take time. The spectrum auction will take place, then initial B2B uses, then it will become into general use for the general public. To harness this technology shift, we need to look ahead without delay and work out what your future opportunities are.”

And Helmut Reisinger, CEO of Orange Business Services, told the conference that the telco would target enterprise demand when it deploys 5G. “It is likely this network build-out will be different. It is B2B-driven and can be focused,” he said.