In the final article of our 5G series, I sit down with Vodafone’s Chief Strategy Officer, Dan Lloyd, to find out what, if anything, stands in the way of Australia’s 5G future.
RW: Dan, thanks for taking the time to sit down with us today. We’ve heard a lot of news recently about rollouts of 5G possibly as early as next year. So tell me, when do you think we can realistically expect to see the rollout of 5G mobile networks?
Dan: Practically speaking, the rollout has already begun, with Vodafone starting its 5G journey several years ago. Like previous network generations before it, it’s not simply a matter of flicking a switch, 5G requires a complex series of upgrades across many parts of the network.
One of the biggest steps we have taken to get our mobile network 5G-ready is our “dark fibre” transmission network. In 2015, we started rolling out 4,000 kilometres of fibre to more than 3,000 of our sites across the country. This fibre acts like a highway with virtually unlimited lanes, meaning exponentially higher capacity and lower latency to enable the exciting applications we expect from 5G.
In early 2017, we also embarked on a world-leading project to “virtualise” our core network. By moving our network to the cloud, it will enable us to be more agile to respond to technology advancements, deploy services faster, and ultimately deliver a better user experience.
In Australia, Vodafone is in a unique position to be able to leverage the global experience of our shareholders, Vodafone Group and Hutchison. For example, Vodafone Group recently completed the world’s first 5G call with Huawei.
These are just some of the many initiatives we have been driving for several years to ensure that key parts of our network are ahead of the curve for 5G. But importantly, carrier networks are just one piece of the puzzle and there are a number of other vital elements that will need to come into play before 5G becomes a reality.
RW: So what else needs to happen before we see 5G services in Australia?
Dan: Firstly, you need an international standard for 5G, where engineers from across the globe define exactly what a 5G network is going to look like.
Secondly, you need enough spectrum to run the 5G network. It’s important that you have internationally aligned spectrum. There’s no point in one country picking a particular spectrum band (a part of the radio frequency spectrum) to operate 5G when everyone else in the world is using a different one. So, there’s a complex international process coordinated by the UN which decides which spectrum bands can be used for radio, for television and mobile communications.
Then you need to clear and allocate as much of that spectrum as possible in each country. Often businesses and governments are already using the spectrum for various legacy purposes and so you need to set out a clear path that gives them enough time to migrate to other spectrum bands.
Once this has been accomplished then you’re still only halfway, because you still need to be able to purchase and install the network equipment across thousands of base stations.
And finally, you need to get 5G capable devices into the hands of every consumer. Devices that are currently in the market are designed for 3G and 4G, and they simply wouldn’t work on 5G. We’re only going to start to see a significant number of 5G capable mobile devices in customers’ hands towards the middle of 2020.
So you’ve probably heard some people blithely say that they’re going to be deploying 5G in 2019, but that is likely to be limited to “fixed wireless” deployments which are essentially a fixed line replacement and not a mobile service.
We always want to push innovations such as these as fast as we can, but we also need to be realistic and we think that’s the realistic timeframe for all the pieces of this complex puzzle to fall into place.
RW: So once the international standard has been agreed upon how do telecommunications providers go about acquiring spectrum?
Dan: Generally speaking, most governments, Australia included, puts spectrum up for auction. They run a sophisticated, online auction process where multiple companies compete and whoever is prepared to pay the most, wins that particular chunk of spectrum.
Of course, it’s never as simple as that and I think in recent years there has been an increased awareness in Australia that you need to be extremely careful when setting the rules for these auctions.
If we’re not careful, this will allow for the possibility of one or two companies purchasing the overwhelming majority of spectrum which limits competition.
And if we don’t have a competitive mobile market then we’re simply not going to get the results that we want in terms of innovation, efficiency and pricing.
The first 5G spectrum auction in Australia is set down for October 2018.
RW: How much 5G spectrum is being made available at the upcoming auction?
Dan: The answer to that question is simply nowhere near enough unfortunately. In the key 5G band, that is the 3.4-3.7 GHz band, there are a total of 300 MHz of spectrum technically available.
Most other countries who have already started this process have made the full 300 MHz available and are actively working to introduce other spectrum bands to satisfy the demand of the technologies 5G will support.
In Australia, 175 MHz of this 300 MHz is already allocated to operators, leaving only 125 MHz to be auctioned later this year. This is going to fundamentally inhibit Australia’s ability to roll out competitive 5G networks. The risks include negatively impacting economic growth, productivity and innovation. And we’re not just talking about consumer mobile services.
5G is the step change to a new generation of what we call Internet of Things (IoT) services which is critical for all sorts of technological advancements. This will deliver autonomous driving and augmented virtual reality and is a step change in major industrial applications.
There’s a risk of the entire market being choked right from the beginning because we’re not making enough spectrum available, and that to me, is hard to understand.
RW: So if we’ve only got 125 MHz of 5G spectrum available, and presumably everyone wants a piece of it, what’s the answer to getting enough spectrum?
Dan: You’ve put your finger on the core problem. We are concerned that there will be far less spectrum available for 5G in Australia than most other countries. For example, the US is aiming for almost 11,000 MHz of 5G spectrum to be made available!
In Australia, there are substantial amounts of this spectrum set aside for other purposes, much of which is not even being used. This could and should be put to use for 5G to ensure that Australians don’t miss out. Currently, we have the three existing mobile network operators requiring 5G spectrum, plus a fourth operator saying they are entering the mobile market. On top of that we also have the nbn™ saying that they may need additional spectrum. To only have 125MHz available for that many players is deeply problematic.
We think the first question to be answered is whether or not there are any other spectrum that could be made available for 5G. The extent to which governments can do this really makes a difference. It’s no good saying we’ve found 5 MHz this year and we might have another 10 MHz next year. You simply cannot plan a massive upgrade of a network of thousands of base stations by doing bits and pieces one at a time.
RW: So this drip feeding of spectrum, what effect does that have on the telecommunications market and most importantly what effect does that have on competition and delivering the best result for Australia?
Dan: It means companies will have to wait until they are able to secure the last pieces of the 5G spectrum puzzle before they can begin to deploy their services nationwide. So what we will probably see are small, localised deployments in very high traffic areas of the major metropolitan cities. And a slow, cautious approach to rolling out 5G in other areas of Australia.
I don’t think that’s what Australia wants or what Australia needs. We need to close the digital divide between our cities and regional and rural areas, not expand it.
RW: Lastly before we wrap up, what 5G application are you most excited for?
Dan: That’s a great question, but one which is difficult to answer as we’re entering a new world of possibilities. The most useful applications are often unexpected. No one predicted that text messages would be one of the “killer apps” for mobile networks and yet Australians are sending billions of them. With 5G, you look at virtually anything and you can see the huge advantages that will start to come with 5G – cost savings, enhancements in efficiency, productivity improvements and so on.
I’m very excited about the potential of 5G for healthcare for example, Vodafone already provides connectivity for Diabetacare devices. Previously, patients would have to wait until their next GP or specialist visit to identify problems and adjust their insulin levels. Now, the devices can monitor glucose levels, send medicine prompts and automatically send this data to the patient’s clinician. 5G will exponentially enable exponentially more information to be gathered and sent, and the lower latency of 5G will mean that the information can be sent and monitored in real time, potentially saving lives.
Vodafone Australia’s DreamLab app has also already proved the potential of mobile networks for accelerating leading edge medical research. DreamLab is an app which uses the “downtime” when our smartphones are charging overnight to create a distributed smartphone super-computer. This allows for downloading and processing of many small pieces of the vast and complex cancer research puzzle, before sending the answers back to the Garvan Institute for Medical Research.
They put together the pieces of the puzzle which allows them to almost double the speed of their research their cutting edge research. 5G offers exponential possibilities for healthcare and medical research. We frankly don’t know exactly how, but it’s very likely that 5G will enable live-saving advances.
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