Analysis Some are talking about 3.5 GHz as a 5G band, but Hutchison’s deal to acquire UK Broadband to bolster its 3UK arm is all about the good old fight for LTE spectrum.
This deal shows that it is not just the US’s opening of its 3.5 GHz band, via its CBRS scheme, that has thrust this spectrum into the limelight. In many parts of the world, airwaves between 3.4 GHz and 3.9 GHz are more simply available than in the US, and are finally being appreciated for their potential to add capacity to wireless networks without waiting for 5G’s high bands, or trusting to the wild west of completely unlicensed spectrum.
One of the promises of 5G is that it will support a dynamic, shared and varied spectrum framework, which will enable non-cellular licence holders to play in the wireless space. But the established MNOs are scrabbling for spectrum in the same old way, bidding in auctions and buying up smaller asset owners. The main difference is that their attention is increasingly on higher frequencies, as their competitive differentiation shifts from coverage to high capacity.
This was highlighted by the deal, announced last week, for Hutchison’s 3UK arm to pay £250m ($309m) for UK Broadband, currently owned by Hutchison’s sister company PCCW. UKB has 208 MHz of nationwide spectrum holdings, mainly between 3.5 GHz and 3.7 GHz – until recently, an area of the spectrum largely ignored by mobile operators because of its limited range and indoor penetration, and because it is often licensed only for fixed wireless usage.
Now, however, it is starting to be seen as a strong band for high capacity TD-LTE deployments, and has gained new profile from the US’s creation of the CBRS service in 3.5 GHz – a very different band plan from that in the UK, but raising hopes that a device ecosystem will start to develop internationally.
Even fixed-only spectrum is becoming more attractive as operators look to build quad play services, and eye the US leaders’ experiments with fixed 5G in millimeter wave bands. But the UK regulator was an early mover in permitting mobile services in 3.5 GHz, so UKB’s assets will also be relevant to 3UK’s core activities, in a world of small cell densification and the desperate race to build capacity for new 4G and future 5G services.
Purchase draws parallels between 3UK and Sprint
This could be a useful purchase for 3UK, putting it in a similar position to that of Sprint in the US.
As fourth-placed players, both these operators have struggled to gain market share, and are disadvantaged in sub-1 GHz bands, which have driven 4G rollout until now.
But they could both leapfrog rivals in some capacity-oriented deployments by harnessing plentiful higher frequency spectrum. Sprint plans significant densification in high value markets such as New York City, using its 2.5 GHz unpaired spectrum, which it will aggregate to its lower bands. This, it claims, will offset its lower holdings of spectrum in some lower ‘beachfront’ bands; and it enabled it to stay out of the bidding for 600 MHz licences, so saving money. It also means it will be in less of a rush to deploy unproven millimeter wave technologies since it has plenty of capacity left in 2.5 GHz.
UKB does not bring 3UK such a rich spectral dowry as Clearwire did Sprint, but these will still be very useful assets for a company which is in a poor position in UK airwaves. It controls about oneeighth of the total in use for wireless services, while BT/EE controls 45%. 3UK has been lobbying for BT, which will be excluded from the upcoming auction of 2.3 GHz licences, to be barred also from the 3.4 GHz sale, on the basis that these higher frequencies are becoming mainstream and valuable, and could be deployed more quickly than many operators have previously expected.
Neglected bands can help redress spectrum imbalances
If Ofcom ignores that call, at least 3UK will redress the balance somewhat with its new purchase, which will boost its current spectrum holdings totalling 74.9 MHz, by a huge 208 MHz. It has 124 MHz in the 3 GHz and 3.6 GHz bands; in the 3.7 GHz band, UKB has a hefty 2x84MHz of contiguous spectrum, and it also has rights in the 3.9 GHz band and, interestingly, the 28 GHz and 40 GHz bands, the former the focus of intense interest for pre-5G trials in various countries.
Not that UKB’s actual customer base will do much to change the fourth MNO’s business – under its Relish brand, it serves only about 15,000 customers, offering fixed residential and business broadband wireless in parts of London and elsewhere. By contrast 3UK has 9.2m active subscribers.
But if an ecosystem develops around the 3.5 GHz TD-LTE band over the next few years, including the all-important handsets, 3UK could find itself owning a mighty tranche of newly valuable airwaves, acquired at a bargain price compared to most auctions. In addition to the upfront price, it will make a £50m ($62m) deferred payment as credit towards a wholesale deal for UK Broadband on 3's network.
Dave Dyson, CEO of 3UK, said that it would continue to operate the Relish service as a standalone business and with its fixed services sold alongside 3’s mobile offerings. He said that the acquisition “takes the risk out of the auction” but does not address the issue of 3UK’s competitive disadvantage in the sub-1 GHz bands.
There are signs of momentum building behind 3.5 GHz as a band for TD-LTE densification. ZTE and Huawei have been particularly active in developing infrastructure and CPE, and have been working with two Italian ISPs – Tiscali and Linkem – to roll out LTE.
The UK deal awaits regulatory approval, but is unlikely to face significant opposition, unlike 3UK’s attempt, last year, to merge with Telefonica’s O2 UK arm. That deal collapsed in the face of opposition from EU competition authorities.
UKB’s current owner PCCW, bought the spectrum licences in 2003 and the company has had various shots at deploying networks and services, initially using TD-CDMA technology, then WiMAX and most recently TD-LTE. While CK Hutchison is controlled by Asia’s richest man, Li Ka-shing, PCCW is run by his son Richard Li.
The UK firm’s 2015 accounts show that revenue more than doubled to £3.2m in that year, but it made a loss of £37.4m.
3.5 GHz initiatives outside the US
The 3.5 GHz band has a newly high profile thanks to the US’s CBRS scheme. But in many other parts of the world, 3.5 GHz has long been open and established as wireless broadband spectrum (usually fixed, but increasingly regulators are allowing mobility).
The Global Mobile Suppliers Association (GSA) noted in December that the 3.5 GHz ecosystem (bands 42 or 43) continues to grow, and 82 user terminals are now available in this band.
Last week, Pakistan's Wi-Tribe said it would deploy the first LTE-Advanced network in the country from May, and the first in south Asia in the 3.5 GHz band. The former WiMAX operator says its network will reach peak speeds of 100Mbps, which it will boost to 200Mbps by the end of next year and 400Mbps the year after that, as terminals and fixed CPE support that. Huawei will supply the equipment.
Wi-Tribe plans to invest over $25m in TD-LTE-Advanced over the next three years, and its owners have committed to reinvesting all profits from the company's operations over this time back into the business. Late last year, Huawei signed a deal to deliver TD-LTE equipment for 3.5 GHz to Italian ISP Tiscali. Huawei said that it was well positioned to supply CBRS equipment in the US because it had put considerable development into TD-LTE for 3.5 GHz elsewhere, and the tweaks will be minimal. The same will be true of ZTE, which has also been very active in 3.5 GHz LTE, and also has an Italian contract for TD-LTE in this band, with former WiMAX provider Linkem.
Many such deployments will be migrations from WiMAX, which was commonly rolled out in 3.5 GHz. Tiscali itself signed its €40m ($45m) contract with Huawei after acquiring former WiMAX operator Aria, which had already signalled its intention to shift to TD-LTE. As WiMAX ISPs make that move, larger providers, and even MNOs, are likely to pounce.
The CBRS scheme in the US
Meanwhile, across the Pond, the CBRS (Citizens’ Band Radio Service) scheme has set some interesting precedents for creative approaches to sharing spectrum. The CBRS spectrum, as defined by the FCC, sits in the 3.5 GHz band, at 3550-3700 MHz. Adopted back in April 2015, the scheme uses a similar dynamic access database as that used in TV White Spaces (TVWS). That access system has three tiers - Incumbent Access, Priority Access and General Authorized Access.
The incumbents include authorized federal and grandfathered fixed satellite services, currently in the 3.5 GHz band, and the FCC notes that they will be protected from interference from the Priority and General users. The priority users are going to be bidding on 10 MHz channels in the 3550-3650 MHz portion, with limits on the number of active licenses and their duration. Lastly, the general tier supports open and flexible access to the band, using any portion of the CBRS band that isn’t currently in use.
Many of those pushing models for that portion are members of the CBRS Alliance, which aims to drive use cases and a broad ecosystem of devices. One way to do this is to carry out high profile demonstrations, and it doesn’t get much more visible, or challenging, than a motor race track.
Nokia, Alphabet and Qualcomm demo CBRS at high speed
Nokia, Alphabet, and Qualcomm teamed up to demonstrate what they say was the first instance of a private LTE network in the CBRS band. They used the signal to send a 360-degree VR experience from a stock car racing around at the Richard Petty Driving Experience event, at the Las Vegas Motor Speedway.
Hitting speeds of 180mph, the tech would allow a viewer to see what it is like driving one of these NASCAR racers – and the trio are pitching the technology as a way for venues to offer new services and experiences using a private LTE network in the CBRS bands.
Nokia provided the radios and Qualcomm the in-car modems, while the demo used Alphabet’s spectrum access system (SAS) and YouTube Live Events for streaming. Nokia customized the private LTE CBRS network with the first multiframe configuration of a TD-LTE network using config 0 and 64QAM to boost the uplink data rate from the car, and config 2 for high downlink rates in the spectator area. It also used Smart Scheduler configuration and Mobile Edge Computing (MEC) to reduce latency and support seamless mobility.
Using CBRS bidding, Nokia, Alphabet, and Qualcomm envision a world in which sports venues and campuses would be able to fire up a private LTE network on a temporary basis, without the need to buy the type of spectrum licence that MNOs require for national operations. Using the LTE network, they could then push content and experiences to users in the vicinity.
Private networks and slicing in shared spectrum
This was also the first test of a private LTE network running in the CBRS spectrum. And Nokia said the demo showed how enterprises, venues and other organizations could deploy their own private LTE networks in shared spectrum and achieve similar levels of performance and reliability as in licensed bands. Of course, Nokia wants to supply or, better still, manage those networks. The Finnish firm is intensely interested in private networks these days, seeing them as a way to ex-tend its business beyond telcos and into direct sales and services for vertical and government markets.
“Not only are we showing how the CBRS band can enable new business ideas using LTE, but also how such futuristic applications like this are possible,” Nokia head of strategy and business development for North America, Chris Stark, said.
He added: “We want this trial to act as a catalyst for carriers and enterprises to start thinking about leveraging this band for new applications. Beyond the high speeds and amazing views this demo provides, the real opportunity is in the life-changing applications that will benefit from the 3.5 GHz U.S. CBRS spectrum and transform users' experience.”
Progress is being made to ensure the CBRS spectrum can be harnessed for real world services using current wireless technologies, rather than waiting for 5G. Definition of standards and protocols is taking place via the Wireless Innovation Forum (WinnForum), whose members include Google, Ericsson, Nokia, Ruckus Wireless/Brocade – as well as Federated Wireless, which has devised an SAS.
In December, the WinnForum announced public availability of its signaling protocols and procedures for the CBRS band. It also worked with Alphabet to demonstrate interoperability between their respective SASs, using the SAS-to-SAS interface protocol defined by the WinnForum.
In December, the FCC conditionally approved seven SAS administrators for the band, including Alphabet, Federated Wireless, Amdocs, Comsearch, CTIA, Key Bridge and Sony Electronics. The SAS is to coordinate the three tiers so the band is available for commercial use on a shared basis with existing federal and non-federal incumbents.
Commercial access points for CBRS are expected to become available in the first half of this year, but device roadmaps are less clear.
AT&T petitions for test licence for 3.5 GHz
Also in 3.5 GHz spectrum, AT&T has asked for the FCC for a special temporary authority (STA) to conduct short term tests between 3550-3700 MHz, among other bands (which also include several millimeter wave bands). It wants to conduct these tests in suburban and rural environments in the California Central Valley including locations around Fresno and Bakersfield. The aim is to collect continuous wave (CW) data for a propagation modelling study, evaluating path loss characteristics in outdoor environments in these midrange and high bands. The operator will use up to 40 base stations provided by test equipment company BVS.
Last year, AT&T Laboratories was already active in the 3.5 GHz band, gaining an experimental licence to conduct tests in Georgia, using prototype 5G systems with integrated adaptive antennas. The company is also the most supportive of the CBRS shared spectrum scheme, among the major US MNOs, and the only one so far to join the CBRS Alliance. T-Mobile has also indicated it may consider CBRS as part of its future spectrum patchwork but the clearest attraction is for potential alternative operators such as Alliance co-founder Google.
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