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Paul, 5Gscotland july 2020

Why a new open access standard may benefit Scotland’s 5G aspirations

Blog by Paul Coffey, CEO of The Scotland 5G Centre

Sweden has become the latest country to ban Chinese telecoms group Huawei from its 5G mobile networks.

Sweden’s telecoms regulator said this week that, following advice from the country’s armed forces and security services, it would ban Huawei from new installations ahead of the 5G spectrum auctions in November.

The announcement follows similar measures announced in July by the UK Government, although Huawei has repeatedly denied being a risk to national security.

While these moves can be regarded as a ‘course correction’ within the telecoms industry, I believe we can harness this change in direction to create opportunities for Scotland.

Despite the potentially vast size of the infrastructure provider market – which is estimated by one study[1] to grow by £12.76 billion ($16.28 billion) globally between 2019 and 2023 – there are only a handful of ‘tier 1’ suppliers of telecoms equipment.

So what you may ask? Over the past two decades, proprietary software tied to the underlying proprietary hardware from the same vendor has created vendor lock-in scenarios, resulting in network modifications carrying a higher cost and limited innovation;  and mobile operators limiting the number of vendors to one or two, to minimise the potential complexity of managing different proprietary interfaces from vendors.

This current set-up has led some notable industry figures – the National Cyber Security Centre’s Ian Levy among them – to conclude that the current model is ‘broken’, with innovation stifled, higher costs, and network resilience compromised. However, the emergence of a new industry structure – the Open Radio Access Network (OpenRAN) – is set to shake up the industry and sweep these barriers aside.

OpenRAN is being extolled by many in telecoms and beyond; both individually and through groups such as the O-RAN Alliance, which includes BT, Vodafone, and O2 owner Telefonica among its members.

What is it?  As the name suggests – and based loosely on the same principles as open source software – OpenRAN technology is built upon the principle of disaggregating the hardware and software component of the radio access network. It enables a switch from proprietary to commodity hardware, a move that will support a truly open software component, enabling networks to be built in a modular fashion.

A move to less expensive, interoperable and more scalable equipment has led to a new breed of suppliers offering these services.  OpenRAN promises to not only facilitate supplier diversity but to deliver it a at a transformational cost point. Indeed, some industry observers believe it can be delivered at 30% cost reduction, compared with traditional deployment methods.

OpenRAN has the potential to transform connectivity for Scotland.  It will not only enable new and enhanced connectivity across all sectors and transform public services but it will also, for the first-time, enable people to make choices about how and where they work and live.

Up to 80% of the capex required to build a mobile network is spent within the radio access domain. With legacy Gs – 2G, 3G etc – population density has been the barrier for widespread deployment of coverage.  As a result, just 42% of Scotland’s landmass has 4G coverage from all four UK operators[2], with 80% from at least one mobile operator.  This means that there are almost 1m people living in rural areas of Scotland today, who receive no mobile service whatsoever.

Whilst there are new government backed initiatives such as the Shared Rural Network that will deliver additional sites and ultimately connectivity into these ‘not spots’, it won’t close the gap and we are kidding ourselves if we believe 5G will be any different.

That’s why I believe a new breed of suppliers backed by a truly open standard can enable Scotland’s  digital transformation.  Not only is OpenRAN more modular and cost effective, but it will also support new deployment models that will become the standard for rural deployment, such as ‘neutral hosting’.  That’s where operators share the physical network, but utilise their own spectrum across it.  In future, this spectrum is likely to be shared or potentially independent from the mobile operators.  Allowing a neutral third party to build out a network and wholesale the service back to the mobile operators is more economical than would otherwise be feasible.

A move towards a more open form of 5G infrastructure could underpin its potential to transform Scotland’s economy and society. Separate reports from Deloitte and Vodafone have said that 5G is expected to deliver more than £12 billion in economic growth over the next couple of decades, creating thousands of jobs and bringing next generation connectivity to people wherever they live and work.

Yet, that will depend on the full implementation of 5G and proper adoption across the country and across the sectors. This is a difficult proposition under the current telecommunications model, which has rendered it uneconomic to bring connectivity to rural  areas and, therefore, to some of Scotland’s most important sectors.

OpenRAN can address this challenge and is emerging at a time when other trends are beginning to align – the development of new technologies and the Huawei measures included. By saying we are open to a new model of telecoms delivery we have an opportunity to raise Scotland’s profile on the world stage and bring in investment from 5G companies, but it is now up to us to embrace it.