11 January 2019

Africa: Getting a Bead On the 5G Business Case for Africa - Looking Beyond the Vendor Hype for Real Revenues

London — Like all new technologies, 5G has been accompanied by a gassy wave of hype. It's now at the moment when the hype has to convert into actual business cases. Russell Southwood spoke to Dr John Naylon, CTO and Founder of CBNL and a member of the Advisory Board of UK5G about the timelines for Africa and what revenue case might work best.

In January 2018, MTN announced that it had conducted a 5G trial in South Africa based on commercially available baseband hardware in lab conditions. According to Tech Central, the 5G trial achieved download speeds of more than 20Gbit/s with latency (network round-trip time) of just five milliseconds. 20Gbit/s is significantly faster than fastest connection speeds available to South African consumers over fixed fibre-optic lines, where speeds top out at 1Gbit/s.

MTN South Africa's CTO Giovanni Chiarelli said at the time:" "There is no doubt that 5G will offer the consumer higher speeds and lower latency, but to achieve this we need the capacity that comes with additional spectrum. Thus, once again, we call on the government to urgently release the much-needed spectrum that is required in South Africa, to lower the cost of data and drive growth and development for all South Africans. We are talking about blocks of hundreds of megahertz, or even gigahertz."

Later in August 2018, Rob Shuter, CEO, MTN struck a more skeptical note saying that 5G was "a technology still looking for an application."

Vodacom announced a trial in Lesotho in the same month. The service used spectrum in the 3.5GHz band and was delivering fixed-wireless access broadband services to two business customers.

The group also announced that it has deployed the same standards-based 5G technology in South Africa, with speeds more than 700Mbit/s and latencies of less than 10ms. This will exceed 1Gbit/s as new software versions and devices become available, it said. However, again it was used to pitch for the availability of 3.5GHz spectrum that it said will be needed for deployment.

When I spoke to Dr John Naylon, I asked him when MNOs would roll-out 5G globally and what the business case was for doing it:"This depends on the use case. Some countries are only just deploying 4G. Places like South Africa will probably deploy in 2020/21. Fixed wireless access will be the leading use case. It's cheaper than fibre but has comparable performance".

He cited an ITU report called The State of Broadband that identified that 97% of Africa's current broadband connections were on fixed copper lines using ADSL. This he believes presents a significant market opportunity but "it needs the right set of market conditions". He also said that it might make sense for wholesale transmission for companies like Liquid Telecom "but wireless tends to be localized."

Delivering fixed wireless in the most cost-effective way probably needs two boxes: a external 5G modem to deliver the customer premises and a Wi-Fi modem to redistribute around the house or office:"There's lots of flavours of 4G/5G dual band modems which give 100 mbps per se". He also said that very much higher bandwidth might be delivered in time using Millimetre Wave technology.

"With 5G you can leapfrog (existing fixed technologies) and provide service to where there's never been any. It would work well for residential gated communities where properties can share the 5G CPE".

So when will 5G handsets be available for retail users?:"This probably depends on the frequencies that will be used. It will be 3.4-3.6 GHZ in Europe. There will be a small delta for 5G in the second half of 2019. For other variants like Millimetre Wave, it's impossible to predict".

What sort of bandwidth will it offer?:"t depends a lot on the operator's network. If you run it in aggregated mode with LTE you're making a fat pipe out of a collection of less fat pipes. This works with LTE A. You can send over two pipes and stitch back together. An operator should be looking to dual connectivity so that you can always use multiple connectivity". Are South African MNOs networks ready for 5G?:"They're absolutely able to do it".

The business case for 5G is still a little blurry at the moment:" The 5G mobile use case is attracting a lot of exotic use cases like autonomous cars but the more everyday use case will be the streaming of video rather than having your own (downloaded) library. Then there's discussion of how it will be able to handle 4K or Ultra HD which both require a lot of bandwidth. Content is a powerful tool for keeping customers happy".

But he believes that the more immediate use case is fixed wireless to deliver this newly available, high capacity bandwidth to corporates and homes:"A fixed wireless connection delivered using 5G is a new revenue stream for MNOs, many of whom don't have it. With an MNO, the handset and the network share the same standard. In the fixed case as access is ultimately via Wi-Fi there is a less compelling reason for it to be standardized".

Naylon's company CBNL has always specialized in point to point microwave and Millimeter Wave networks and the ecosystem has evolved in our direction:"We've been doing pre 5G access systems for a number of years for backhaul and access, usually for enterprise or gated communities. These have not aligned with previously published standards but in the fullness of time they will converge.

CBNL is present in 15 African countries, ranging from those on the emerging side like DRC (with multiple operators) to Morocco that has a very competitive telecoms environment. Its biggest market is Nigeria. Its applications include everything from enterprise access to businesses and Government as well as operators in general.

The research has uncovered that whilst the DTT process has been, and for the majority of countries still is being, a complex project there are expected to be significant developments over the next 24 months. In fact, we're predicting that an additional 83 million African households will have access. The report is priced at £1850, however, until the end of the year, we'd be happy to offer you a 25% discount from that, which would reduce the price to £1385. Knowing your area of work, I believe that the level of detail in this report would be beneficial to you and your company. If you'd like to get a feel for the contents of the report please let me know by reply and I can send you over the Executive Summary and the Burkina Faso Country Analysis as an example. Send your email to: editorial@balancingact-africa.com

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