Vodafone continues to extend its UK roll-out of 5G, and it has announced its first implementation of RAN sharing, using the standardized MORAN (multi-operator RAN) approach.
Although Vodafone and O2 have an extensive passive infrastructure sharing arrangement through their Cornerstone joint venture, they announced last year that they would also be moving to share active equipment, outside of congested areas like London, where they will take separate paths in order to meet the expected demand for 5G capacity.
Active RAN sharing remains rare in most parts of the world – sometimes because regulators restrict it in order to maintain competition; sometimes because of operators’ own commercial sensitivities; and sometimes because it was not necessary until MNOs found themselves having to invest so heavily in new networks to support rising data usage, which often came with no additional ARPU. In 5G, then, sharing is likely to become an economic imperative for many operators, especially in rural and even suburban areas.
There are two main standardized network sharing technologies, MORAN and MOCN (Multi-operator core network). MORAN is simpler because each operator retains its own spectrum/radio channel to the shared base station. So they share the backhaul link to the core network and the digital module of the base station, as well as the passive infrastructure (tower), but have separate RF paths and radio units.
Vodafone has also turned on 5G services in the cities of Belfast, Edinburgh and Leeds, bringing its total to about 100 towns and cities.
“We have started the new year as we mean to go on,” said Vodafone UK CEO Nick Jeffery. “We now offer 5G in double the number of places than our nearest rival and we have significantly boosted the capacity of our network. It is ready for the arrival in 2020 of some great new 5G handsets and the next big software release bringing ultra-low latency. Together, these will push 5G to the next level.”
Vodafone is also reported to be renegotiating a deal with CityFibre, which gives it exclusive rights to use the latter’s fiber-to-the-home (FTTH) connections in certain areas, for access and to backhaul small cells in urban areas. The companies have a partnership that aims to deliver 5m FTTH connections by 2025, with the alternative fiber provider deploying the links and Vodafone investing some of the money, while also acting as an anchor tenant, guaranteeing a level of usage of the new connections in return for first access rights.
Because Vodafone has significantly fewer wireline assets in the UK than incumbent BT, the CityFibre deal was seen as a way to redress the imbalance with BT’s mobile arm, EE, at least a little. But at the end of last year, the pair were reported to be in talks to restructure the deal.
This was sparked by CityFibre, and its owner Goldman Sachs, wanting to scale up their plans, but that would impact on Vodafone’s exclusive rights. Either it would need to make a far higher investment, if the fiber build-out were to accelerate, said sources, or the whole deal would need to be rethought. Some sources said the clause was restricting CityFibre’s ability to sign up other lucrative contracts or partnerships. But if other companies, such as TalkTalk itself or Sky, were to gain access to CityFibre’s network, Vodafone would be likely to be compensated with improved commercial terms, sources told The Telegraph newspaper.
The Financial Times reported that Goldman Sachs could invest a further £1.5bn in network expansion. CityFibre was previously reported to be interested in purchasing the Fibre Nation unit from ISP TalkTalk, though that had to be put on hold in the run-up to December’s UK general election, since the Labour Party manifesto included a pledge to nationalize BT’s wholesale fiber arm Openreach, and provide broadband to every home. Following Labour’s defeat, talks between Vodafone, Goldman Sachs and CityFibre reportedly resumed.
The main point to be resolved is how Vodafone’s exclusivity clause – and the amount of investment the MNO makes – would be affected by any additional expansion of CityFibre’s network or the potential acquisition of Fibre Nation. When the original deal was struck in 2017, Vodafone said the exclusive period would last “about three years”, so the arrangement might well be coming close to an end anyway. At that time, CityFibre CEO Greg Mesch said that, after the period expired, the network would be open to all.