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5G strategy will put UK in world-leading position: Rowland – ZDNet

5G strategy will put UK in world-leading position: Rowland – ZDNet

Shadow Communications Minister Michelle Rowland has lauded the government in the United Kingdom for formulating and announcing a 5G strategy, saying this would likely ensure that it is a world leader in the digital economy.

“The UK government announced a 5G strategy, stating that ‘as part of their modern industrial strategy, the UK must be a global leader in the next generation of mobile technologies and digital communications’ and that ‘the government’s job is to create the environment for this to happen’,” Rowland said during a speech at the CommsDay Congress in Melbourne on Wednesday.

“While the UK government notes that ‘the development and deployment of 5G at a commercial scale is still some way off’, ‘such is the opportunity presented by 5G that the UK government is acting now to set out a bespoke 5G Strategy’.

“I commend this attitude — this disposition. By setting itself an ambitious goal, the UK may well take early advantage of the potential of 5G and create a world-leading digital economy.

“I ask you to compare: How do we set up Australia to leverage our clear strengths in the mobile arena? What is the attitude, the vision, of our government?”

At the start of this year, a UK government report outlined the collaborative effort needed from departments, industry, and academia on telecommunications. It also outlined its post-Brexit digital strategy to put “skills, infrastructure, and innovation” at the forefront of its agenda to support “Britain’s world-leading digital economy”.

The British government then announced that it would be investing over £1 billion to become a “world leader” in 5G, as well as to encourage the rollout of a full-fibre fixed-line network. The Department of Treasury; Chancellor of the Exchequer; and the Department of Culture, Media and Sport (BCMS), which oversees the telecommunications sector in the UK, are now working with the 5G Innovation Centre (5GIC) University of Surrey alongside tech partners.

“Somewhere along the line, the UK Treasury picked up on the sort of idea that ‘OK, the UK needs this much better mobile internet network to give the UK better productivity’,” 5GIC COO Keith Robson told ZDNet.

By comparison, the Australian government is bogged down in 5G spectrum discussions, with Rowland saying “spectrum reform is an area where much of the discussion and focus is on the means to an end, rather than the ends themselves”.

The only arm of the government currently focused on 5G is the Australian Communications and Media Authority (ACMA), which is currently investigating the allocation and auction of 5G spectrum across the 3.6GHz and millimetre-wave (mmWave) bands, last month announcing that it is proposing to accelerate the decision-making process on whether to use the latter after hearing of the “urgency” around setting aside 5G spectrum.

The ACMA released a consultation paper on mmWave spectrum in September, noting that international standards and harmonisation are “progressing rapidly”, with the bands to possibly be in use before 2020.

“Australia has a strong track record of timely review of spectrum arrangements in support of innovation in the communications industry,” acting ACMA Chairman Richard Bean said.

“5G in the millimetre-wave bands presents a great opportunity to maintain this record so the Australian community will continue to enjoy the benefits of early uptake of new technology.”

Specifically, the ACMA is looking to “streamline” the early consideration of the 26GHz band, which includes 24.25-27.5GHz spectrum, as well as “potentially other mmWave bands”, after Telstra argued that early access to 5G spectrum by next year is “absolutely critical” for Australia to remain a mobile leader as it has been for 3G and 4G.

While the Australian government focuses purely on 5G spectrum, the nation’s telcos have been continuing to trial the technology, with Telstra, Optus, and Vodafone working on live 5G trials with Ericsson, Huawei, and Nokia to show the speeds and latency that various specific consumer and business applications could attain.

“We spend a lot of time obviously on 5G; we’ve got a whole program of work,” Telstra CEO Andy Penn told ZDNet last month.

“We were the first to roll out serious 5G trials, and then we’ve got an in-market live trial on the Gold Coast next year.”

In a speech largely mirroring that delivered to the Australian Communications Consumer Action Network (ACCAN) National Conference in September, Rowland on Wednesday also blamed the Coalition government’s switch to a multi-technology mix National Broadband Network (NBN) for causing the “land grab” between retailers that has caused falling margins for slower-speed tiers.

According to Rowland, under Labor’s vision of a full-fibre NBN, connections would have remained at a steady 27,000 per week.

Instead, the Coalition’s mix of fibre, hybrid fibre-coaxial (HFC), and fixed-wireless deployments resulted in a pause during the rollout, followed by a leap in connections that had retail service providers (RSPs) scrambling to win market share.

“The emergence of this land grab — which would be more accurately described as intense price-based competition — did not appear out of nowhere. This land grab was man-made,” Rowland said.

“Look at the evidence. A fibre-to-the-premises NBN … would have passed over 27,000 brownfield premises per week at its peak, and remained largely steady at that level until the end of the rollout.

“However, with the change of policy at the 2013 election … to make the 2020 completion target, the rollout had to ramp-up sharply in FY17 and FY18. The impact of this can be seen in the sharp increase from a steady 27,000 brownfield premises per week under an FttP rollout, to 70,000 brownfield premises per week in FY18 under the multi-technology mix.

“That is almost a three-fold increase in capacity.”

It would have been “prudent” for the government to look into whether supplying customers in such a condensed period would “intensify price-based competition”, Rowland added, and then into what this would mean for NBN’s variable connectivity virtual circuit (CVC) pricing during the migration period, and in turn for consumer experience.

Rowland’s comments follow NBN last month denying culpability of its CVC charges in causing any margin squeezing for RSPs, instead suggesting that falling profits could be due to retailers focusing more on a “land grab” than on providing high-quality services to consumers.

“Whilst the CVC charge may be a new input cost, it is not an unquantifiable or unmanageable cost for retail providers,” NBN said in response to the ACCC Communications Sector Market Study.

“Even if it contributes to relatively lower margins … this would only be the temporary result of the ‘land grab’ phenomenon that is currently occurring in the downstream market as access seekers fight for market share during NBN’s rapid expansion phase.

“The effect of access seekers’ arguments to lower CVC prices even further is to require NBN to fund the ‘race to the bottom’ pricing that has occurred in the downstream market whilst access seekers embark on aggressive marketing campaigns to retain and attain market share.”

NBN reiterated this perspective in its response to the ACCC on its revised Special Access Undertaking (SAU) variation in September, saying that falling margins and trade-offs between price and quality of broadband services are not only caused by the CVC charge, but by competition.

“This includes the current ‘land grab’ as access seekers seek to maintain or capture market share in the transition to the NBN, and the failure of access seekers to take steps that could potentially increase ARPU,” NBN said.

RSPs including Vocus, Vodafone, MyRepublic, and Macquarie Telecom have previously argued that the only reason retailers are not offering 1Gbps speeds is NBN’s CVC pricing structure.

However, NBN CEO Bill Morrow recently criticised retailers for cutting corners by focusing on pricing rather than speeds or quality of service after he revealed that the average bit rate per user is around 1Mbps.

“Under our pricing model, that could be doubled to 2Mbps for each end user for around an extra AU$5 per month,” Morrow said.

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