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Thursday, July 11, 2019

Neutral Host Networks for 4G & 5G - latest learnings

On July 9th, I ran my first whole-day workshop in London on the emerging sector of Neutral Host Networks (NHNs), together with Peter Curnow-Ford of Viatec Associates. The event backgrounder is here (link).

It covered an important new addition to the mobile industry landscape. Along with pure private networks and "thick" MVNOs, NHNs are extending the 4G/5G marketplace, to many more stakeholders than today's handful of cellcos in each country.

Definition: An NHN is 3rd-party cellular network providing wholesale, commercial mobile localised coverage solutions to national mobile network operators (MNOs) or other communications service providers (CSPs). That access can be either paid or unpaid, and in dedicated NHN-owned spectrum, unlicenced/shared or the MNO's own bands. NHNs typically use small cells, but not always.

Podcast: An accompanying audio track for this post is now available at: https://soundcloud.com/user-521594836/neutralhost

NHN uses & types

NHNs have many possible use-cases, and several business and technical archictecture models. 

The main common theme is wholesale enablement of 4G/5G, in areas with poor coverage, reflecting difficult economics or tricky accessibility. A secondary motivation is a desire by venue/property owners for more control of wireless usage - and ideally monetisation.

The key uses for NHN deployment are:
  • Rural / remote areas
  • Metropolitan centres needing 4G/5G densification with small cells
  • In-building, especially for large sites such as offices, stadiums and hotels
  • Road and railtrack coverage (and potentially in-vehicle)
  • Industrial sites and large transport hubs
  • Temporary sites and events (eg festivals, major construction projects)
  • Some classes of residential and SME commercial venue
There are several types of NHN model emerging, plus a number of other similar or overlapping approaches, as well as hybrids. The two most important versions of NHN are:

  • Multi-Operator Small Cell as a Service (SCaaS), without the NHN having spectrum of its own. This can either use multiple small cells clustered together (eg one per MNO) & sharing backhaul, or a single small cell capable of virtualisation and with radios supporting multiple MNOs' frequency bands.
  • Spectrum-based NHNs, where the provider is a full local MNO in its own right, with its own radio resources (shared or dedicated) and network, hosting other MNOs & SPs as tenants or roaming partners.
An additional model is the use of some form of cloud/virtualised RAN, with shared fibre / antennas linked back to different MNOs' signal sources and core networks. One more option is for "pure" private 4G/5G networks, run by an enterprise, to also offer NHN capabilities as a secondary function - for instance for a 5G-enabled factory where the  network is mostly for the robots, but can also support employees & visitors' smartphones.

We considered NHN to be different to a few other alternatives such as national roaming, network-sharing, or government-run/funded wholesale cellular networks. 

There are several SCaaS players already in the market, and many more being trialled or discussed. Some are TowerCo's expanding to new markets, some are indoor specialists, and others are starting with metro deals with local authorities, or street-furniture assets.

As yet, we were unaware of any of the spectrum-based NHN offers being fully commercialised yet, although that should change in the next 12 months, either in the US with CBRS spectrum, or in a number of other markets such as UK, Germany, Ireland, NZ and elsewhere with early trials ongoing, with new spectrum owners or lessors.

The workshop discussed which model is the best-fit for each use case, summarised in the chart below. This may evolve over time, and there are certainly nuances and exceptions, but for now, this is a unique mapping of the overall opportunity space. Rural coverage in particular has many options - and while NHNs have opportunity, there is also a chance that the existing MNOs may collaborate, if allowed (or encouraged or forced) by regulatory authorities.

Challenges and Opportunities

The workshop discussed a whole range of NHN enablers and components, such as suitable spectrum bands and cloud-based core networks, and perhaps eSIM. I'll cover those in other posts or presentations.

There are numerous technical and operational challenges to getting NHNs to work properly, especially where dedicated spectrum and core networks are involved. The workshop discussed these, and while some of the detailed discussion will remain private, it's worth highlighting a few interesting outputs of the day:

  • The biggest variable is how to get operators to sign up to use NHN capacity, especially where they have to pay for it. Sometimes access will be free to the MNOs (perhaps beyond providing backhaul or core-network interconnect), and paid for by a venue. But even in those cases, there are substantial contractual and organisational challenges.
  • There is a lack of appropriate tools and back-end software. Planning and design tools are not yet focused on NHN deployments, especially if they use different spectrum bands, or have other constraints. There is also a gap around NHN-friendly billing and charging software, although perhaps existing wholesale billing platforms can be customised.
  • Security was raised as an issue - can NHN deployments be fully trusted by MNOs, which may be using them as local partners? How is security - at many levels from physical access to small cells to authentication and fraud-management - managed? This could well be an obstacle to uptake (or an excuse for inaction)
  • For 5G, can NHNs and MNOs inter-operate their mechanisms for QoS and network-slicing? How can an MNO offer a premium service & SLA to a developer or content provider, when the final delivery is on someone else's infrastructure?
  • Skills - are there enough engineers and installers who understand how to make this work? Especially where 5G small cells are involved, perhaps with mmWave and MIMO radios - there simply isn't a deep pool of trained and certified personnel to deploy them for NHNs in-building or wide rural areas.
  • How can efficient marketplaces for spectrum resale/leasing or wholesale access be developed? What does a future NHN "dashboard" or aggregation play look like, and are there APIs being implemented to enable them?
  • Backhaul and fibre - is it in the right place, either indoors or outdoors? This is problematic in rural areas in particular, but also for enterprise deployment, particularly where landlords may have different investment priorities to their tenants.
Some of the key opportunities in the next 24 months will be in solving these problems, as well as the early pioneers rolling out NHN services themselves. 

We will also see numerous "adjacencies" for NHN that tie in with it. There is a strong overlap with open-access wholesale fibre deployments, as well as some interesting NHN/edge computing scenarios such as combining multi-operator SCaaS with multi-operator (and enterprise) edge cloud facilities.

One possible rival technology is better Wi-Fi, especially Wi-Fi 6 for indoor and industrial use. If it gets deployed quickly, and if easier access with the new OpenRoaming concept gets adopted by enterprises, it is possible that the opportunity space for NHNs may shrink in some locations.

Conclusions and next steps

There's a huge amount of interest in the NHN space. Numerous countries are releasing new spectrum bands, and many stakeholders (such as infrastructure owners, venues, enterprises and local goverment authority bodies) are keenly interested in experimenting. Trials, testbeds and prototypes are attracting attention and investment.

While a limiting factor might be getting the big MNOs on board, there is a chance that they may get pre-empted by other NHN tenants that nudge them into action. Cable operators, MVNOs, cloud players and others might exploit NHNs - especially the spectrum-based ones - to launch their own 4G/5G services at lower cost than solo deployments. One enterprise I spoke to recently even suggested launching venue-specific MVNOs themselves, on their own core-network platform. We can expect a whirlwind of innovation around NHNs, and also the wider class of "non-public networks" (NPNs) for 4G and 5G.

If you're interested in more detail about Peter & my work on NHN models, please drop me a line at information at disruptive-analysis dot com. We're intending to run additional public workshops later in the year, in London and elsewhere. Potentially, we're interested in partners to help market the events, or assist with with logistic in other geo's. In addition, if you want a private under-NDA workshop for your organisation, we can adapt to meet your specific needs. We also work with investors, enterprises, venue-owners and solution vendors to craft strategies around the NHN sector. 

Podcast accompanying this blog post