Dark Fibre and the positive impact on 5G deployment

Grumbling to Ofcom will not produce cost effective alternatives to Openreach to accelerate fibre deployment in the UK.

O2’s plan to roll-out 1,400 “small-cells” across London – to boost mobile phone reception and prepare the capital for 5G – shows network densification is not blue-sky stuff. It’s really happening.

There are some snags, however.

We can’t just deploy thousands of new base stations – if the costs remain the same – as for the current-style base stations. It’s just not affordable.

We need all of the costs of the small cell to reduce. Site rentals, the kit and the backhaul.

Don’t be fooled by the word small.

Small cells are actually very high capacity nodes in their own right – and each will need its own high speed backhaul connection.

What’s more, the technology that allows us to manage interference – and the user experience – needs very high-speed fibre connectivity back to a “control node” that might only be a few blocks away.

Some of the leading technologies to solve this problem specify dark fibre – for these short but very demanding connections.

Pressure to decouple transmission costs from traffic volume is not going away.

Let’s be very clear. These network densification plans are tough, complex programmes to execute.

But it’s about WHEN not IF – in my view.

And dark fibre – is at the heart of this densification process.

So what’s the problem …… ”let’s just bring on Dark Fibre”

We don’t have an abundant supply of Dark Fibre in the UK today.

A typical UK Mobile network has c17k base stations. Let’s say half are in urban areas – where extra capacity will be needed first.

Densification could drive this number up significantly – maybe over 50k sites in 5 years. This is a big backhaul challenge – and opportunity. Especially when you multiply by 4 for all MNOs.

One estimate quoted at the Small Cells Forum in May 2017, suggested in excess of 500k small cells for London alone – between 2020 and 2025.

Of course, Dark fibre is readily available for intercity/inter data centre use – but these new base stations need metro and local fibre solutions in busy urban areas.

The Alt-nets do a great job promoting dark fibre products in their metro patches – where they have built out. But that’s not everywhere.

Overall, it’s a fragmented picture.

 

Lack of Competition

BT Openreach is the dominant provider of Local Fibre in the UK. It has lots of fibre just about everywhere.

Openreach doesn’t offer dark fibre today. But, nudged along by Ofcom, they were due to are launch a Dark Fibre in October. But Openreach’s legal victory over Ofcom on Dark Fibre has thrown the network densification plans for Mobile Operators into disarray.

So, we like regulation, but we like competition more. It drives businesses to improve, respond and invest.

Incumbent Telcos are tough businesses to compete with. 

They hold so many of the cards. But we have seen them react.

Here in the UK – BT raised its game on consumer broadband when Virgin offered higher and higher speeds – and they really responded when Virgin announced their new footprint investment.

The question for us is: what will kickstart BT to raise its game on Dark Fibre?

Without a real competitive threat, they’ll be very slow to come to the party.

Openreach is being pushed to do dark fibre

We can’t ignore Openreach – but almost everybody finds discussion about the business troubling.

Openreach is being pushed to do dark fibre. And what we actually need is an enthusiastic and committed supplier of dark fibre.

If this turns into an industry brawl, we won’t make progress any time soon

What we need is a collaboration – with enough missionary zeal – to deliver new dark fibre for dense Mobile.

We’ve seen BT resist Dark Fibre for many years.

 

Let’s talk about Ofcom for a minute

We’ve all seen Ofcom cracking the whip over the last while, threatening to break up BT. It’s hard to see what more they could do now.

I’m sure they are close to the limit of their powers.

So, BT are behaving entirely rationally – and Ofcom is a top-notch regulator.

But we still don’t have dark fibre at the right price – and in the right places for densification.

 

Dark Fibre Supply Options

Our train is hurtling toward the densification discontinuity – but quite likely to swing off onto the slow track, due to the scarcity of Dark Fibre

I really believe this is a critical moment in time for the industry – and it’s going to happen very soon!

So how can we fix this?

There are only three options to get the right UK dark fibre supply, in my view:

1. Wait for Openreach to become a great dark fibre supplier – this will happen but it will simply take too long. There’ll be no rush to drop prices in the short term and the risk is mobile capacity build will stutter and fumble while we wait.

You may have heard Clive Selley, Head of Openreach, ask the industry to meet him and discuss investing in fibre and broadband.

That’s great – but won’t we just end up funding an extension of Openreach’s monopoly?

2. We could create a national dark fibre alternative to Openreach from scratch – this is probably unrealistic and massively expensive. It would take too long and be too risky.

And anyway, why “overbuild” the alternative fibre investments already made.

3. Build a collaborative solution between Dark Fibre users and existing Providers to drive investment; eliminate fragmentation; fill gaps – and create a credible alternative national supply for mobile operators.

Sort of crowd-sourcing an alternative to Openreach.

But where do we begin?

 

Dark Fibre Alliance

Looking at the business case would be a good place to start

It’s not cheap or easy – but the 20 Year TCO is over 70% capex.

What’s more, if you dig, you can put as many fibres in as you like. It doesn’t move the costs much. And by carefully planning the network in rings – resilience can be almost free.

Now turning to demand from Mobile operators.

We’ve split the country into different “Mobile Geo Types” – RuralUrban, and Dense Urban.

It’s clear that if you build your own fat dark fibre network – it only works if you can win enough business to achieve a payback. That suggests Dense Urban is more attractive than Rural. It’s not difficult to understand.

But it also says that two operators – or more – are better than one. And operators that are densifying will be better off than those who don’t have plans – just yet.

Digging in Dense Urban is not a walk in the park.

But we know that alternative fibre infrastructure already exists. So, let’s assume we use it – where we can – rather than overbuild it. We need to buy it on an IRU basis – capex rather than opex. We think those deals can be done.

We also need to explore alternatives to digging up our hard-pressed roads and pavements:

Alternative ducts – like those being installed for electric car charging points – and water assets – are well worth exploring.

What about point-to-point radio?  Can that help us avoid burying fibre at all – in some places?

It’s easy to imagine a practical mix of solutions – giving some upside – instead of a new traditional dig which would improve the average costs we would face.

Bottom line is – this could work with the right coalition of providers and users committing to buy – for the long term.

The fly in the ointment is these key players are all competing with each other in the market place today – so it’s not straight forward.

However, thinking about the business case and benefits, it is a really exciting prospect.

But, there are some open questions:

  • How can we improve coverage and fill the gaps?
  • How do we trigger new build – if required?
  • What about common standards?
  • Can we reduce the integration costs for users?

We can’t expect MNOs to consume Dark fibre from dozens of different suppliers – using different interfaces and processes.

Can MNO’s put it all back together – and achieve the same service levels as from BT? Can we add resilience by linking different metro networks?

We want better service – not worse.

 

Conclusions

So, for network densification to work economically, it’s clear we must disconnect transmission costs from growing traffic volumes.

We have no choice.

Why would we sleepwalk into a situation where we have no alternative to Openreach?

BT Openreach is unlikely to offer much useful help in the short term. So, why would the rest of us sleepwalk into a situation where the industry has no practical alternative to Openreach.

There are alternatives – but we need to grasp the nettle now. And the harder we grasp it, the less it will hurt.

Whether you:

  • have dark fibre
  • want to buy dark fibre
  • have skills or technology to help exploit it or may even have ducts we could thread fibre through

Or maybe you just share my eagerness to fix this problem?

If you do, please get in touch. I’d be happy to share more of our thinking and hear your story. 

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