690 Million Mobile Money Accounts in 90 Countries

The mobile money industry is now processing a billion dollars a day and generating direct revenues of over $2.4 billion. With 690 million registered accounts worldwide, in 90 countries, mobile money has evolved into the leading payment platform for the digital economy in 75 percent of low- and lower-middle-income countries, the GSMA says.

Globally, the percentage of providers who offer mobile money through a smartphone app has increased from 56 per cent in 2015 to 73 per cent as of June 2017.

Total transaction values grew by 21 per cent from $26 billion in December 2016 to over $31.5 billion in December 2017. On average, an active customer moved $188 per month, primarily cashing in and out and sending person-to-person (P2P) transfers.

source: GSMA

source: GSMA

When Infrastructure Sharing Makes Sense, or Does Not

The cost of small-cell deployment can be reduced by up to 50 percent if three players share the same network, McKinsey consultants say. Incentives to do so tend to be highest where capital requirements are very high, where service providers see little incremental value from operating their own access networks, or conversely where a collaboration can drive competitive value.

At the moment, the former arguably drives interest in Africa. In Europe, the more-common driver is perceived value when two or more competitors partner differentially, to gain advantage over other providers in the same markets.

“Two market leaders in a four-player market might be willing to share a superior network to polarize the market, for example, or two attackers might join forces to improve network quality and compete jointly against the market leader,” McKinsey consultants say.

source: McKinsey

The point is that infrastructure sharing is most likely where there are perceived value drivers: capex savings or competitive positioning. At least so far, tier-one providers have not seen the competitive advantages in North American markets.

source: McKinsey

One More Reason Why 5G Infrastructure Will Not be As Costly as Some Fear

AT&T, China Mobile, Deutsche Telekom, NTT DOCOMO, and Orange announced the creation of the ORAN Alliance, a world-wide, carrier-led effort to drive new levels of openness and virtualization in the radio access network of next generation wireless systems.

That is one more example of efforts underway that suggest the cost of network infrastructure is going to keep dropping. That is important as some fear the costs of 5G, for example, will skyrocket.

But the ORAN Alliance efforts are one example of what is happening to drive infrastructure costs to new and lower levels.

“Technologies from open source and open whitebox network elements will be important software and hardware components of these reference designs,” the group says.

Open, interoperable interfaces, RAN virtualization, and big data enabled RAN intelligence are among the areas of work.

ORAN Alliance also will attempt to maximize the use of common-off-the-shelf hardware and merchant silicon, while minimizing proprietary hardware.

More U.S. 5G Spectrum Coming: Auctions in November 2018

It is impossible to understate the importance of new spectrum being allocated for 5G networks.

New spectrum being made available for 5G, in the U.S. market, for example, represents at least an order of magnitude (10 times) more spectrum than presently is available for all mobile service providers.

Combined with small cell architectures and spectrum aggregation, there could be two orders of magnitude more effective spectrum available for 5G use.

Assuming the U.S. Congress clarifies rules on upfront payments, the U.S. Federal Communications Commission will hold spectrum auctions in the 28-GHz and then 24-GHz bands in November 2018, for 5G network use.

“It is my intention for the United States to hold an auction beginning this November of spectrum in the 28 GHz band, followed immediately thereafter by an auction of spectrum in the 24 GHz band,” said Ajit Pai, FCC chairman.

That will follow auctions of 600-MHz spectrum, opening up spectrum sharing for 150 MHz of spectrum in the 3.5-GHz band.

“I intend to propose the next steps needed to make the 3.7 to 4.2 GHz band available for commercial terrestrial use,” said Pai.

In addition to those spectrum moves, Pai also noted that the FCC Spectrum Frontiers Order opened up nearly 11 GHz of spectrum in the bands above 24 GHz for mobile use.

“We followed up by making an additional 1,700 MHz of millimeter wave spectrum in the 24 and 47 GHz bands available for terrestrial 5G wireless use,” said Pai. “Last year, we began to explore unlicensed use in the 6 GHz band.”

Pai says the FCC also is moving to remove barriers to wireline deployment, which addresses issues like easier and cheaper ways to attach equipment to utility poles, said Pai. “We’ve also updated our rules for high-speed, dedicated services by lifting rate regulation where appropriate.”

“In sum, we are creating huge incentives for the private sector to invest in the 21st-century networks used for backhaul,” he said.

How Much Will 5G Cost in Europe?

McKinsey consultants believe 5G infrastructure costs could increase between 60 percent and 300 percent for some European mobile operators, at peak.

Some estimates of spending in Europe to build 5G networks, which have capex estimated at $300 billion to $500 billion.

But other estimates suggest building 5G in Europe might cost less than $60 billion.

source: McKinsey

Many doubt this.

Will 5G Capex Really be Higher than 4G?

The Telecom Infra Project, which now has 300 members working on open source telecom network elements and platforms, is likely one reason coming 5G networks will not cost “10 times more” than 4G, as some fear.

In fact, predicts GSMA Intelligence, on a global basis, mobile infrastructure spending is going to remain mostly flat through 2020. And history suggests that will not change post 2020, as more 5G networks are built.

In fact, post 2016 capex has been close to 2010 levels, GSMA Intelligence data suggests. In part, the reason for relatively constant spending is that mobile service providers in recent years have tended to spend about 15 percent of revenue on capex.

And if revenue is flat, capex spending will tend to be flat as well.

source: GSMA Intelligence

Including fixed and mobile capex, some forecasters believe spending will grow to 2020 at low single digit rates.

source: IHS Markit

Existing Telecom Infra groups are working on crowd cell, power, disaggregated cell site gateways,  OpenCellular radios, millimeter wave, vRAN fronthaul, artificial intelligence, machine learning, software defined radios,

The point is that even though 5G networks might involve higher capex to support huge numbers of small cells, some believe costs actually can drop. Open source, software-defined radios and virtualized network elements all will help.

Global Mobile Revenue Growth 1% to 2020; Developed Markets Flat

Global revenue growth rates provide the best evidence possible of why new revenue sources and business models must be developed in the mobile industry.

Traditional mobile revenues will have a compound annual growth rate of about one percent to 2020, GSMA Intelligence predicts, and virtually all of that growth will come in developing markets,

particularly India, China, Pakistan, Indonesia and Bangladesh, as well as Sub-Saharan Africa and Latin America.

Revenue in North America and Europe, for example, will be flat. In product life cycle terms, that means the mobile business now has reached the peak of its cycle in developed nations, though not yet in developing markets. Revenue decline follows.

source: GSMA Intelligence

Despite growth slowing, especially beyond 2020, China will account for around 40 percent
of global mobile revenue growth between 2017 and 2025.

The number of unique mobile subscribers will reach 5.9 billion by 2025, equivalent to 71 percent of the world’s population.

By 2025, two thirds of mobile connections (excluding cellular IoT) across the world will operate on high-speed networks, with 4G accounting for 53 percent of total mobile SIMs and 5G at 14 percent.

The number of Internet of Things (IoT) connections (cellular and non-cellular) will increase more than threefold worldwide between 2017 and 2025, reaching 25 billion.

5G-NR Simulation Shows 10X to 100X Speed Increase, 10X to 100X Latency Decrease

5G-NR radio networks boosted device speeds an order of magnitude in 100 MHz of 3.5 GHz spectrum, while latency also improved by an order of magnitude (10 times), in simulations conducted by Qualcomm.

In a separate simulation using 800 MHZ of 28-GHz spectrum, browsing speeds increased by two orders of magnitude, while latency improved by two orders of magnitude.

The 3.5-GHz test, conducted in Frankfurt, increased end user speeds from 56 Mbps for the median 4G user to more than 490 Mbps for the median 5G user. Latency dropped from 116 milliseconds to 17 milliseconds.

The San Francisco simulation boosted browsing speeds from 71 Mbps for the median 4G user to 1.4 Gbps for the median 5G user.

Browsing download latency dropped  from 115 ms to 4.9 ms.

In both simulations, existing cell site locations in Frankfurt and San Francisco were used, where 5G NR cell sites are co-located with actual, existing LTE sites.

How Much Incremental Revenue from 5G IoT?

Ericsson estimates that incremental new revenues from 5G could represent as much as 36 percent to 46 percent revenue growth for mobile operators and others in the ecosystem by about 2026. 

If you assume mobile operators will get 10 percent of that upside, then an incremental $328 billion in mobile revenues by about 2026. That might boost mobile operator revenues as much as 19 percent. 

source: Ericsson

Will 5G Capex Break the Bank?

Will 5G break the bank? In other words, will 5G cost so much more than 4G that the business model breaks?

Some fear capital investment could be double to triple the levels of 4G. By other estimates, 5G will require just four percent higher capital investment than did 4G.

But cost parameters are changing so much that some expect 5G capital investment might actually be less than 4G, even if the historic trend is that each next generation mobile platform requires incrementally more investment.

source: European Commission

One reason is infrastructure cost improvements, including open source platforms that inherently cost less than proprietary solutions.

Nokia and Facebook, for example, are working on 60-GHz fixed wireless platforms for urban or suburban areas. Nokia expects to develop Facebook’s Terragraph network and will conduct trials of the technology this year.

Combining Nokia’s wireless passive optical network protocols with Terragraph's mesh-routing and multi-hop capabilities allows broadband providers to wirelessly deliver gigabit services over wider areas with high reliability and meet growing demands for ultra-broadband access, Nokia says.

Nokia and Facebook will also work together to accelerate IEEE's 802.11ay industry standard, leveraging Nokia's Wireless PON and Terragraph's TDMA scheduling capabilities, Nokia says.

Wireless PON is based on 802.11ad WiGig technology and provides a wireless drop for fiber-to-the-home networks.

Access points can be easily mounted on utility poles, street lights or a building facade, and deliver gigabit-per-second speeds to a self-installable WPON Home unit.

The point is that 5G capex requirements might not scale linearly as have prior network generations, despite the heavy reliance on small cells and need for dense optical backhaul.

5G Will Use Millimeter Wave and "All the Above" Frequencies

Unlike earlier mobile network generations, there will not be such a close association between particular platforms and particular frequencies. Analog mobile was based on use of 800-MHz frequencies.

The 2G network added 900 MHz and 1.8-GHz frequencies.

Spectrum including signals at 400 MHz, 900 MHz and 1.8 GHz anchored 3G. The 4G network used more spectrum at 2.1-GHz, plus additional 600-MHz, 700-MHz or 1.8 GHz spectrum in some markets.  

The coming 5G networks will add use of millimeter wave spectrum in many bands, as well as repurposed spectrum from former 2G and eventually 3G bands as well. To a greater extent than in the past, 5G will use “any spectrum,” licensed or unlicensed, across a bewildering range of frequencies.

source: Viavi

23 Mobile Operators Have Launched IoT Networks

Some 23 mobile operators have commercially launched 41 mobile internet of things networks worldwide, including  both NB-IoT and LTE-M platforms.

NB-IoT networks are available from 3 Hong Kong (Hong Kong); China Mobile (China, Hong Kong); China Telecom (China); China Unicom (China); Chunghwa Telecom (Taiwan); Cosmote (Greece); Dialog (Sri Lanka); Etisalat (UAE); KT (South Korea); LGU+ (South Korea); M1 (Singapore); Mobitel (Sri Lanka); Orange (Belgium); Slovak Telecom (Slovakia); Telia (Finland, Norway); Telstra (Australia); TIM (Italy); T-Mobile (Austria, Germany, Netherlands, Poland); Turkcell (Turkey); Velcom (Belarus) and Vodafone (Australia, Czech Republic, Ireland, Italy, Netherlands, Spain, Turkey).

LTE-M networks are available from AT&T (US, Mexico); Etisalat (UAE); KDDI (Japan); KPN (Netherlands); Orange (Belgium); Telstra (Australia); Turkcell (Turkey) and Verizon (US).

Those choices reflect thinking about demand for internet of things connections. Mobile operators choosing NB-IoT are betting that lower-bandwidth connections will dominate. Service providers picking LTE-M are betting that higher-bandwidth applications especially those supporting cameras, will be important.

AT&T to Launch Mobile 5G in 12 Cities in 2018

AT&T says the first three U.S. cities to get its standards-based 5G  service will be Dallas, Atlanta and Waco, Texas, by the end of 2018. In all, AT&T plans to launch mobile 5G in a dozen cities by the end of 2018.

AT&T says it will use its millimeter wave assets in at least some of the early launches. The map shows areas in green where AT&T has 39-GHz licenses available. So that is one clue about where mobile 5G might be launched in 2018.

source: Allnet

Will MulteFire Displace Wi-Fi?

Will MulteFire replace Wi-Fi in many enterprise settings? In some cases. More likely is coexistence of Wi-Fi and MulteFire, as mobile device connectivity inside the building becomes a new imperative, and as new internet of things sensor networks are deployed.

It seems most likely that either enterprises or neutral host providers will build such networks, though some venues are large enough to warrant carrier-built networks.  

The total addressable revenue for enterprises deploying private and neutral host LTE with MulteFire will reach nearly $5.7 Billion in 2025 growing at a 61.2 percent compound annual growth rates, according to Harbor Research.

The total global “smart systems” revenue for the private LTE addressable market in industrial and commercial IoT will reach $118.5 billion in 2023, the firm also estimates.

source: Harbor Research

5G Forecasts are Nearly Meaningless

Forecasts of near-term 5G revenue are nearly meaningless, since most of the revenue will come from mobile customers shifting from 4G to 5G networks. So most of the 5G revenue is a simple substitution of 5G for 4G, with the exception of any price increases suppliers are able to command for 5G service.

The salient exception will be fixed wireless, as that represents an incremental new revenue stream for most mobile operators. When fixed wireless is deployed outside an existing fixed network geography, the upside is close to 100 percent incremental.

In-region deployments are a mix of substitution (as has been the case for customers moving from digital subscriber line to fiber connections) and some hoped-for amount of market share shifts (if a mobile operator can take share from a competitor in the fixed services market).

A third possibility is incremental revenue upside from existing customers upgrading to higher-price tiers of service. In other cases, gains will come in the form of avoided churn or new customer gains from new bundle propositions that were not possible before high-speed fixed wireless was available.

Longer term, incremental new revenue from autonomous vehicles, internet of things or other new use cases represent the key incremental revenue opportunities.

In the early going, observers will watch a few countries for clues:  the United States, China, Japan and South Korea. Those four countries will represent more than 85 percent of potential 5G deployments.

source: TBR

Where Will AT&T Launch Mobile 5G First, in 2018 and 2019?

If you had to guess where AT&T will launch mobile 5G in 2018 and 2019, you would do worse than to guess it will be the locations where AT&T already has been readying its 5G Evolution network.

The 5G Evolution network essentially is a pre-5G network using LTE-Advanced techniques, carrier aggregation, 4x4 MIMO and 256 QAM, but compatible with the expected full 5G standard.

Among the roughly 24 U.S. cities where 5G Evolution is expected to be available are Atlanta; Austin; Boston; Bridgeport, Connecticut; Buffalo, New York; Chicago; Fresno; Greenville, South Carolina; Hartford, Connecticut; Houston; Indianapolis; Los Angeles; Louisville; Memphis; Minneapolis, Minn.; Nashville; New Orleans; Oklahoma City; Pittsburgh; San Antonio; San Diego; San Francisco; Tulsa, Oklahoma and Sacramento, Calif.

In the meantime, some like to criticize AT&T for selling “fake 5G.” Some of us would argue that is precisely the wrong conclusion to draw. The 5G Evolution network will allow customers with 4G phones (since there are no 5G phones yet) to experience what standards-based 5G will be like, using their existing devices.

Also, 5G Evolution allows AT&T to drive current revenue off an infrastructure that will not be ready for standards-based 5G, with limited handset availability, for some time until 2020.

More Wireless Competition is Coming

Emergency restoration is one application for many communications platforms, including Google’s Loon, using free-floating balloons. That was proven when Hurricane Maria destroyed the island’s electrical grid, and therefore its mobile and fixed communications capabilities.

Eventually, we will find out whether such wireless access networks, and others, such as constellations of low earth orbit satellites, such as planned by SpaceX, OneWeb, TeleSat, O3b Networks, Theia Holdings and LeoSat, can provide a more-permanent solution for gigabit internet access and communications across many rural and some urban areas globally.

Facebook also has high hopes for use of unmanned aerial platforms as well.

source: Google

The point is that the notion there is “less competition” for consumer internet access is likely to be proven wrong. Competition will heat up, even if many decry the fixed network duopoly or the mobile oligopoly. Those are not the only future choices. Private access networks, networks using a substantial amount of unlicensed or lower-cost shared spectrum as well as networks building from “inside out” (up from localized Wi-Fi to wide area coverage) are coming.

Vodafone, AT&T Show Clearly-Different Strategies

In the competitive era, firm strategies are diverging, compared to the monopoly era, where virtually every telecom service provider had fundamentally the same strategies, customers and services.

Vodafone, for example, is banking on emerging market subscription growth, while AT&T is banking on a move into applications and content, plus some geographic expansion in South America.

Over the intermediate term (a decade), either should work. Beyond that, perhaps nobody can hazard a guess.

source: Vodafone

Spectrum Prices Too High in South America

It should never come as a surprise when mobile operators or their advocates say spectrum prices are too high. That is the case in South America, GSMA says.

Licensed spectrum has been a fundamental prerequisite for being in the business, is a major cost element and therefore affects retail pricing.

In the future, such considerations, while still important, will coexist with business models using unlicensed spectrum, shared spectrum and aggregated spectrum. Significantly, the available amount of commercially-usable spectrum will grow by orders of magnitude.

source: GSMA

Where today a mobile operator often has less than 100 MHz of total spectrum, and operators even in the largest countries might have only hundreds of megaHertz, in the future each service provider might have access to thousands of MegaHertz. Also, other techniques such as use of small cells will amplify the usefulness of any amount of physical spectrum.

AT&T, for example, now holds spectrum licenses worth more than $91 billion, estimates Goldman Sachs analyst Brett Feldman, while the value of Verizon’s spectrum is $79.4 billion.

The current equity value of all AT&T stock is about $176.5 billion, implying that spectrum alone represents 51.6 percent of AT&T’s total equity value.

Verizon’s market value is $207.9 billion, implying that Verizon’s spectrum represents 38 percent of total valuation.  

Bloomberg Intelligence has estimated the total value of Sprint’s 2.5-GHz spectrum alone at $115.1, about 2.4 times Sprint’s enterprise value of $48 billion.

The large point is that the cost of spectrum has been a major cost for mobile operators. Though that reliance on licensed spectrum will remain, the cost per unit should fall, going forward. There is simply going to be so much new supply, while small cell architectures will allow abundant spectrum reuse.

Also, unlicensed spectrum is going to play a big role.

source: Parag Kar