Reinventing Telcos - a preview of my ITU World panel session

Reposted from an article I wrote for the ITU's blog (link)

On the 27^th of September, I’m moderating a panel discussion at the ITU World 2017 conference in Busan, South Korea, on the theme of “The transformation of telecom operators: reinventing telcos.”

This is a topic we’ve heard discussed for at least the last 10 years in various forms, yet we still seem to be at or near the starting point. The panel will look at what can we do differently, to change the dynamics. In particular, it will focus on the internal organisation and processes of the telecom industry, both within and between telcos. Other conference sessions will consider new services, industry verticals, and the customer perspective.

Across the globe, traditional CSPs are trying to adapt their cultures and operational models, in the face of ever-increasing competition and substitution from new players. As well as other rival service providers such as cable operators, telcos now face challenges from Internet-based peers, niche specialist SPs (for example in IoT), and even enterprises and governments building their own networks. On the horizon, new technologies such as AI threaten to change the landscape even more. The nature of what it means to be a “service provider” is changing.

This goes beyond just implementing next-generation networks, whether fixed or wireless. While these are necessary, they are not sufficient for true reinvention – and they also require enormous new investment. The real question is what options exist for operators to best-allocate scarce resources (money, skills and time) to maximize the value from such investments in infrastructure. There is also a risk that emphasis on the “hard challenges” of raising finance, acquiring spectrum or sites, and building networks, means less focus on the “softer” problems of culture change, service design, organisation, customer-centricity and partnership.

This in turn poses problems for regulators, especially at national levels. Usually driven by domestic politics and local economic situations, they somehow need to ensure a strategically-important sector remains healthy, while also recognising the huge global-scale advances from many technologies and services that transcend national or regional boundaries.

It is not realistic for every country to have three or four competing local providers of social networks, IoT management tools or future AI platforms. Citizens and businesses expect similar functions to work internationally and immediately, with rapid incremental improvements. Unlike networks, innovation in services and applications often favours fast-evolving proprietary platforms, rather than committee-led interoperable services like the PSTN.

Telcos – and their regulators – have until recently been poorly-suited to this new world, although some are making interesting attempts to “turn the super-tanker”.

The session will touch on four or five key areas:

• Innovation: What is the best way for telcos to innovate, given regulatory & cultural constraints? Arms-length subsidiaries? Huge retraining programmes? Business units targeted on verticals / technologies? How much freedom should product units have, for example should they be forced to use the company-wide core network & NFV platforms, or should they be able to go “off piste” and act independently? Are “platforms plays” viable in telecoms, or just unrealistic wishful-thinking?
• Regulation: What should regulators be doing, to simultaneously encourage new entrants/innovators, but also allow telcos to make enough returns to take long-term investment views? And how can regulators deal with the overlaps, competition and tensions between very distinct groups, such as traditional infrastructure-oriented telcos and Internet-based “web-scale” platforms? One group has huge capex and strict regulatory constraints, the other huge R&D and greater risk of failure: how can one set of rules span both, where they intersect?
• Industry coordination: How do the current pan-industry structures (eg bodies like ITU & GSMA & 3GPP) need to change? Can they be made faster, more willing to take risks, faster to acknowledge errors, bring in non-traditional stakeholders?
• Technology catalysts: Are 5G & NFV really “transformational” enablers of re-invention? Or will prolonged hybrid/transition phases from older tech mean there can’t be fast shifts? How should telcos deploy technologies such as AI, blockchain or IoT internally, as part of their reinvention?

One other thing should frame the debate: language – how we describe the problems, or wider communications environment. Words, analogies and narrative arcs are psychologically important – they shape the way we perceive problems, and can either enhance or misdirect our responses. We should recognise the unhelpfulness of terms like:

• “Digital”: Morse Code was digital in 1843. Telecom networks have used digital technology for decades, as have most businesses. It’s about steady progress and evolution, not a “digitalisation” step change.
• “OTT”: usually said in a negative tone, I believe this prejudiced description of Internet services has hugely harmed the telecoms industry over the last decade. For example, it obscures the fact that larger Internet companies do more deep technology than telcos: they make network equipment and chips, build infrastructure and conduct billions of dollars of R&D.
• “Level playing field”: telco executives, regulators and lobbyists use this phrase with abandon. Yet the analogy is meaningless, when everyone is playing different sports entirely.

The narrative needs to change substantially. My ITU Telecom World 2017 session aims to reset the debate, and catalyse thoughtful (but rapid!) future action by operators, regulators and industry bodies alike.


If you are seeking a moderator or speaker for a telecoms strategy or policy event, please contact information AT disruptive-analysis DOT com

Quick thoughts on MWC from afar

I'm not in Barcelona this week.

I stopped going to MWC a few years ago, when the hassle and costs involved started outweighing the benefits. One year I had 400 requests for meetings, and it took me a solid 2 weeks of email just to sort my diary. No more - I prefer smaller events, which have the added benefit of fewer "messages" being hammered into my skull by stressed marketing execs and their PR/AR minders.

But I am watching from afar, scanning Twitter and a few webcasts for nuggets of insight, from the comfort of my sofa, bed or local artisan coffee place.

A couple of quick observations so far:

• The most intriguing announcement is the Cisco/Ericsson blending of VoLTE and Cisco's Spark collaboration and messaging app (link). Although the PR is carrier-focused and around selling UCaaS, I suspect the real story is yet to come. Both companies also have close relationships with Apple and IBM. And I suspect that a future enterprise-centric solution could combine private (or virtual-private) mobile networks, optimised iPhone/iPad experience, maybe eSIM, Siri, Watson integration and more. Let's see if there's any different messaging, or more detail, at Enterprise Connect next month, the big UC/UCaaS shindig in Orlando. I'll be there, unlike MWC, as it gets the signal/noise ratio right. [Sidenote: if anyone at Ericsson or Cisco is now thinking "hmm, sounds interesting.... why haven't we thought of that?" then get in touch with me!]
• Nokia's reinvention continues. On its analyst/press webcast yesterday, it made a big deal about verticals and enterprise-related activities too. Utilities, transport, public sector and "webscale" companies were namechecked, including (again) private cellular either standalone or in partnership with classical MNOs. It also highlighted optical and IP networks (which came with the ALU acquisition) which was an interesting choice for a mobile event. Props to CEO Rajeev Suri for using "Webscale" instead of the pejorative "OTT": much more mature and inclusive language. 
• There's an awful of of 5G-washing going on, unsurprisingly, with plenty of references to its supposedly world-changing abilities. Governments and policymakers have all swallowed the 5G spin, without realising it's mostly just a pitch for more spectrum. Yet the GSMA head Mats Granryd talked in his keynote about 1.1 billion users in 2025. Given half of those (or more) are likely to be smartphones, that suggests that maybe 500m, at most, will be 5G IoT devices. Which, depending on your preferred overhyped forecast number, implies about 1-4% of the total IoT universe in 2025 - hardly the most indispensable enabler of the overall automated society of the future, nor an indicator that a spectrum monoculture policy is desirable. Doesn't suggest billions in new value from network-slicing capabilities, either. In a nutshell, 5G is important, but it's not the gamechanger many assert. Use the hashtag #5Gwash to call people out on it.
  
• The most-discussed new handset is HMD Global's new take on the classic Nokia 3310. As well as its retro looks, it sports a month-long battery, the Snake game, and a whole two (count 'em!) generations of cellular technology. That's right, it's a good-ole 2G GSM, calls+SMS device. Plus, it comes in a dual-SIM version. That's proper plastic SIMs, naturally, not this newfangled eSIM stuff. Sounds like a great backup device for 2-factor authentication when your main phone breaks or gets stolen.  
• GSMA published an eBook on "Messaging as a Platform" (link), tying its MaaP vision to RCS. There's a lot of generic stuff about chatbots, AI and "conversational commerce" in there, without explaining how it relates to a useless messaging service which isn't even a successful product, nor has any form of unifed API. Unless, as I suspect, it's aimed at making MNOs the distribution channel for Google's chat interface, Assistant and voice-recognition tools. Maybe there's a Google API / PaaS play to look forward to?  As I wrote last week, operators should ignore RCS and So-Called Advanced Messaging (yes, I like the acronym) and do more-relevant things instead. The same applies to contact-centre and multi-channel vendors: there are plenty of more-urgent things to look at. The GSMA's continued use of a Twitter SnapChat avatar points to the fact that platform status is earned not just imposed.
• The "official" announcement that Deutsche Telekom's immmr VoIP/messaging spin-off is using GenBand's Kandy cPaaS is interesting (link), although it was talked about informally last year at TADSummit (link). Looks like it's Internet/WebRTC-based and very much a good example of "post-IMS" mobile communications, with iOS and Android apps as well as browser access. No RCS nonsense visible, although I can imagine that DT's network-fundamentalist wing might have something to say about in future.

More MWC de-spinning if I get a chance over the next couple of days.

Telcos & OEMS: You should ignore the GSMA's "Advanced Messaging", RCS & "Universal Profile"

Summary: There are  10+ reasons why RCS messaging has failed, despite a decade of trying. Even with Google's involvement, the GSMA's "Universal Profile" and "Advanced Messaging" only fix, at most, two of these problems - and introduce new ones. Despite the hype, mobile operators should continue to deploy VoLTE only when it is really needed, and should avoid Advanced Messaging, RCS and ViLTE entirely. There are many other better ways for telcos to retain relevance in communications apps & services.



What's happening? 

In the next couple of weeks, we will likely be hearing a lot about the GSMA’s “Universal Profile” (UP), developed with Google as a standardised setup for new Android devices to support VoLTE, plus the latest version of the decade-old failed RCS messaging "zombie" service, now being rebranded as “Advanced Messaging”.

UP also incorporates a version of ViLTE, the video-calling application that can’t even be called a zombie, as it was never alive in the first place. Essentially, UP is a combination of VoLTE and RCS6.0. The first spec was published in Nov 16 (link). (Microsoft is also apparently supporting it, although seems less deeply involved than Google).

Expect the MWC announcements to talk breathlessly about how this is going to enable “Messaging as a Platform” (MaaP), and there will likely be some dubious-seeming big numbers mentioned. Any claims of "XXXmillion active users" should be *very* carefully questioned and analysed - what actually counts as use? There will be a lot of spin, painting what is essentially legacy SMS usage with a new app, as RCS. Daily is much more relevant than monthly data here.

Most probably, you’ll hear lots of hype and PR noise about “mobile operators winning back against the OTTs”, or “people won’t need to download apps”, or “everyone is fed up of having 17 messaging apps”. You’ll hear that it can use network—based QoS, which is great for VoLTE primary-telephony calls, but irrelevant otherwise. Vendors will probably say “well you’ve got an IMS for VoLTE so you should sweat the assets and add extra applications”.

We might even get an announcement about “advanced calling”, which is a way to improve phone calls with pre/mid/post-call capabilities (not actually a bad idea if done well) but force-fitted to use RCS rather than a more pragmatic and flexible approach (which is a very bad idea, and likely executed very poorly).

So ignore it. There are no customers, no use-cases, and no revenues associated with “advanced messaging”. It’s the same pointless RCS zombie-tech I’ve been accurately predicting would fail for the last decade. It’s still dead, still shambling around and still trying to eat your brain. It’s managed to bite Google and Samsung, and they’ll probably try to infect you as well.

What's the background?

If you're new here: I've been following and talking negatively about RCS for 9 years now. The project started in 2007, and emerged as a lukewarm 2008 IM concept for featurephones (link) in the days when both iOS and Facebook where just emerging onto the stage. I described it as a "coalition of the losers" in a report in 2010 (link) It evolved to a dead-on-arrival branded app called "joyn" as smartphones gained traction (link), and it has tried climbing out of its grave so many times since that I describe it as a zombie (link). Various operators have deployed it, then given up - even in markets like Spain and South Korea where multiple operators offered it at first.

I'm currently writing a report on VoLTE trends and implications for my STL/Telco 2.0 Future of the Network research stream (link). It should be out in the next month or so. As part of my research, I've been updating myself about the GSMA's plans to blend VoLTE with RCS - hence becoming aware of the Universal Profile and Advanced Messaging developments. 

Most people I speak to in the mobile industry privately admit that it's been a huge white elephant. I've met people who've been given the "poison chalice" of RCS inside operators and eventually quit their jobs in desperation. Huge slugs of time and money have been spent on a no-hope service, that could have been better deployed elsewhere, on things that could make a real difference. 

It's been pushed by:

• A few operators misunderstanding the nature of user behaviour, requirements and preferences for communications services, thinking that there had to be a standardised and interoperable "magic bullet" to compete with WhatsApp, Facebook, iMessage and WeChat (and 100's of others).
• The desperation of network vendors trying to make IMS seem relevant for something other than plain-old phone-call VoIP, either for fixed broadband voice, or VoLTE.
• The GSMA's stubborn belief that it needs to predefine interoperability and lengthy specifications, rather than iterate on something basic that people actually like. Also, the belief that it has to tie in the phone number / any-to-any model.
• Google, wanting to find a way to compete in the messaging space it has repeatedly failed with, especially creating an Android version of iMessage based on the Jibe acquisition. Samsung has recently joined in with its own acquisition of Newnet.

So my "coalition of the losers" joke (er... jibe?) in fact has a reasonable basis in history. And history doesn't record many such coalitions having great success at anything, except maybe keeping a few people occupied.

A couple of operators have launched recently - Rogers and Sprint in North America - but the other operators are still delaying, and have big iPhone populations anyway.
 
In the meantime, while the telecom industry has procrastinated over RCS, various other adjacent players such as Twilio and Nexmo (now Vonage) have pushed the supposedly "dead" SMS market to become the standard mechanism for A2P messaging, and signed up thousands of developers for that, plus voice/video/notification cPaaS capabilities. In the time it has taken RCS to get to its 10th anniversary, we have seen Apple, Facebook, Whatsapp, WeChat and others create huge value and loyalty.


But, but... Google!
 

It’s a little difficult to tell if Google actually believes in RCS, or whether it’s just cynically using the GSMA and gullible MNOs to push Android harder – and especially, help reduce the horrendous fragmentation of its platform in terms of both OEM-specific skews and non-updated older OS variants.

As I wrote previously (link), it also seems likely that Google is using the surprisingly-pliant cellular industry to help it create its own version of Apple’s iMessage. The optional hosted RCS Hub could also be an early foray by Google into the NFV and cloud communications space – perhaps with an eye to ultimately competing not just with the Huawei/Ericsson/Nokia axis, but also maybe Amazon and Twilio over time. That’s quite an extrapolation on my part, though - not based on anything public from Mountain View.

What’s definitely clear is that Google doesn’t see RCS as “the one messaging platform to rule them all”, nor the Universal Profile as a way to replace all other forms of voice and video communications. It has a broad range of other services, including Duo, Allo, Voice, HangOuts (now being reoriented towards enterprise), WebRTC support in Chrome and perhaps natively in Android at some point. It also has a stake in Symphony (messaging/UC for finance and other verticals), and works with most of the larger UCaaS and hosted PBX/UC players.

It also wouldn’t be a surprise if Google acquires other cool youth-oriented messaging apps to compete with Facebook’s Instagram, although a post-IPO Snap might be too pricey. And of course, it has its own push-notification platform which is probably (quietly) the world’s biggest messaging service that nobody talks about.

In other words, Google seems OK about creating a lowest-common denominator function that's no worse than what it has already, but which brings extra cooperation brownie-points from the mobile industry, and a bit more leverage with its wayward licensees. Its downside is limited - and if miraculously it somehow it can create a MaaP platform, its upside significant. There's probably also some interesting data-analytics and machine-learning gains in here somewhere too - even if it's just a better understanding of what Android users don't like.

In other words, from Google's point of view, it's a worthwhile and almost risk-free punt. Whether the mobile industry wants to over-rely on a company with a reputation for ruthlessly shutting down failed ventures is another matter.

 

What's wrong with UP/Advanced Messaging? 

Where do I start?! Well, perhaps by pointing out what actually has changed for the positive. It's true that Google is offering a hosted RCS platform for operators that don't yet have an IMS. ("Effectively sponsoring this piece" - link). That's helpful as it reduces friction and cost of operators getting RCS to market. So to does having a pre-certified set of devices that should work with that platform, or in-house deployments. 

But while perhaps those are necessary, they are very far from being sufficient. Many other problems and concerns abound.

The biggest lie about RCS and the “universal profile” is that it will become universal or ubiquitous. Not only is Apple not likely to support it, but it is far from clear that Android OEMs will implement it on all their devices, especially those sold in the open market. It is unlikely to have good PC support (although to be fair, neither does Whatsapp). It is unlikely to be downloaded onto older Android phones. It is unlikely to work smoothly on dual/multi-SIM handsets, of which there are hundreds of millions. It’s unlikely to work well on many MVNOs’ devices (neither does VoLTE). It’s also unlikely to work nicely on the vast plethora of smart IoT devices that support SMS – even those with decent web-browsers and app downloads. 

I've seen some of the projections for RCS-capable handset penetration, and I think they're significantly over-enthusiastic, especially if considered on a country-by-country basis.

There is no relevance of RCS for the enterprise UCaaS and vertical markets that telcos urgently need to focus on. That has to integrate with all manner of other communications services that seem unlikely to have more than a loose coupling with RCS, if at all. It won't be replacing email, Office365, Cisco Spark, Slack, HipChat and numerous other collaboration tools, not to mention the universe of video-conferencing. It's also going to be a long time before it becomes another channel in contact centres' multi-channel platforms - there's a long list of bigger fish, especially if WhatsApp and Facebook offer APIs to billions of users.

The MaaP approach seems doomed to failure – there are no examples of successful technology platforms that have not been based on successful technology products first. Trying to pre-guess the requirements for a platform – let alone creating voluminous standards for it - ignores a wealth of experience: customers use products in unexpected ways, with spikes in viral adoption, unpredictable demographic biases, emergent behaviour and geographical patchiness.

Platforms are created in response to a product’s growth, not pre-ordained. Nobody predicted that Snapchat had the potential to become a media channel and camera/AR platform – those angles represent reactions to actual real-world usage, as well as improvements in “adjacent” technology in the interim. More importantly, developers are unlikely to become interested until there is evidence of real-world usage among a decent slice of their target audiences. You'd have to be a brave airline to ditch your native apps, ignore Facebook and WeChat and iMessage, and port your main loyalty "experience" to a mini-app inside the RCS client.

There are assorted other problems lurking as well - interconnect and roaming should be interesting. Will it really be free to do video-sharing and file-transfer to your friend in Singapore? Trying to work out the pricing aspects will be challenging too - unless everything is free, for everyone, and to everyone. While that might be feasible for post-paid customers with big data quotas, it's unlikely to translate to the worlds billions of prepay users. 

It's slow to evolve, as it's designed by committee. It's not set up to do A/B testing on live audiences - maybe 100 million on a redesign first, to see how it goes and then make a call on full rollout. Standardisation and interoperability doesn't work with the agile, devops approach to apps that is de-rigeur here.

And another of the herd of elephants - what's it for? Who is going to use it, and why? I can't foresee any case-studies of teenagers saying "I used to SnapChat my friends all the time, but now we only use HyperMessage+ from NetworkXYZ!". Is it just generic SMS-style "Hi, I'm running 5mins late" stuff? But with "rich" elements, at least insofar as the person you're connecting with is another RCS user who can see them? Why else are people going to use it, except maybe as some sort of lower-than-lowest common denominator? And moreover, whats going to keep them using it, given how dynamic the communications app market is. Unless it can capture the "cool" factor, it's toast.

This is the problem - pretty much everyone can get WhatsApp or WeChat or Facebook. There's a 90%+ chance your friends are on your platform of choice and have no reason to switch. iMessage is the obvious anomaly, but it's more of a hygiene factor between Apple users - who often also have multiple devices like tablets and Macs as well, and who expect to "fall back" to FB or WA for friends (or groups of friends) who aren't Apple users. I guess in low-Apple penetration countries there could be tighter communities of Android buddies, but they may well include people with a lot of prepay accounts, older open-market handsets (some multi-SIM) and little likelihood to upgrade to a new UP-powered one soon. (One possible exception is India, given Reliance Jio's influence). 

So what should you do? (Or not do?)

If you’re the head of advanced communications at an operator, or looking into future voice and video services, don’t bother wasting your time in Barcelona on RCS or "advanced messaging". 

Sure, speak to vendors and look at cheap ways to implement VoLTE. The industry painted itself into a corner with a horrendously complex and expensive approach, so finding quick/simple/reliable ways to launch or scale it make sense. (Think open-source, cloud-based, pseudo-NFV for IMS without the hugely complex MANOs etc). VoLTE is becoming increasingly mainstream, although its adoption in many operators' networks is quite gradual. Insofar as the Universal Profile helps with handset/network interop for voice calls, it has a role to play.

But beyond VoLTE, operators and handset OEMs need to ignore the exhortations of the GSMA to implement so-called “Advanced Messaging” (I wrote that before I realised the acronym spells SCAM). It will soak up money, technical and marketing resources, customer attention and credibility. Even if the Google-hosted RCS platform reduces the cost of operators deploying their own servers, it will still need testing, integration with in-house IMS platforms and new NFV systems and other actions.

Be very very skeptical of all the announcements. Any user statistics should be scrutinised carefully - while some operators technically have RCS servers live, the key statistic that won’t be mentioned is how many active users are doing anything beyond basic SMS-type messaging. How many are actually using RCS properly - and like it? The reality is that essentially zero people have switched from using Facebook Messenger, WeChat or Snapchat to using RCS for any meaningful purposes – and a reasonable forecast for 2019 would be roughly zero as well.

Go and see genuine innovators in messaging and communications platforms for inspiration. Have a look at the various business UCaaS providers. Seek out anything based on WebRTC. Speak to the cPaaS providers & talk about partnerships. Look for open-source platforms for infrastructure and IMS (eg from Metaswitch & Canonical). Track down in-app messaging, or ways to hook IoT devices' signalling traffic into the mix (MQTT and so on). Look for companies doing interesting things with SMS - it's not dead, especially for A2P uses. Look at what some vendors are operators are doing with 2nd/3rd-generation API platforms for developers.

There are dozens of clever options for messaging innovation available for operators (or MVNOs, cPaaS providers, UCaaS players and other types of SPs). RCS is not one of them.
It's notable that in all of the GSMA's literature & commentary I've been able to find, I've seen almost zero mentions of these words: Viral, Fun, Snapchat, Slack, Instagram, Emoji, Twilio. But there's lots of "interoperable" and "rich" and scare-stories about telephony ARPU.

Although, ironically, GSMA's own Twitter avatar is a SnapChat ghost at the moment. And it has its own Snap channel (link). Maybe if it announces at MWC that SnapChat is transitioning to/interconnecting with RCS it'd be a gamechanger. But otherwise, it speaks volumes that it's promoting one of the Internet success stories in 2017 messaging.

As I've said before: Ubiquity is earned, not imposed. RCS stilll needs to prove that users actually want it before it can have pretensions to being a platform. For now, remember So-Called Advanced Messaging is still a failure - it's an unfortunate acronym, but amusingly appropriate. If the Universal Profile had just been about implementing - and improving - VoLTE to improve the telephony experience, it would make sense. Instead, it's been weighed down with a lot of harmful baggage.


 
If you're thinking "So what else should I do instead?" or "How do I stop my management team making an expensive mistake?" then you're in the right place. Contact me about possible workshops or other advice. information AT disruptive-analysis DOT com

Industry 4.0 & IIoT needs shared spectrum to succeed, either for 5G or WiFi

[Warning, Long Post! 
TL;DR summary: Industrial automation increasingly needs good wireless connectivity for robots, sensors and other systems. Mobile operators and telcos are poorly-suited to providing it, especially in-building or site-wide. Regulators need to focus on more shared spectrum, to allow other stakeholders to build/own/operate IoT wireless networks, either for 5G, WiFi or other technologies]


A topic I've been hearing repeatedly about recently is Industry 4.0. This is the reinvention of many sectors with IoT, analytics/AI, sensors and assorted other technologies. Sometimes called the IIoT (Industrial IoT), the 4th Industrial Revolution, or Industrie 4.0 (for Francophones), it follows on from mechanisation, mass production and computing. 

You'll often hear the clunky term "cyber-physical systems", or perhaps derivatives like Smart Factories, Smart Agriculture, Smart Utilities and so on. You'll also often hear Industry 4.0 linked with a discussion of 5G, and perhaps governments' broadband or spectrum policies. (Obviously my esteemed readers wouldn't use the useless & obsolete word "digital").

But what you won't hear much about is Industry 4.0's dependency on what *type* of spectrum, and by association, what types of networks are deployed, and by whom.

Credit: Christoph Roser at AllAboutLean.com."

My view is that for Industry 4.0 to succeed, there need to be privately-owned and -run wireless networks for IIoT. Traditional mobile operators cannot provide all the connectivity requirements, and industry will not pay for all wireless connectivity "as a service", especially inside buildings or across their plant/campus facilities. (Just as fixed telecom operators do not provide most in-building ethernet or other wired systems today).

This needs to be reflected in spectrum policy - and, especially, various models of spectrum-sharing. Strategic over-reach by MNOs, or bodies like the GSMA, will otherwise risk delaying the adoption of Industry 4.0 altogether, or cause enterprises to seek sub-optimal approaches to implementing IIoT, with consequent damage to the broader economy. 

It doesn't matter whether specific IIoT implementations use 4G, 5G, WiFi, short-range or LPWAN technologies like SigFox or LoRa, there needs to be the option to have (locally) self-controlled spectrum for owned networks for critical or secure IoT.  

As I've written before, Telecoms is too Important to Leave Up to Telcos (link). 

It's also sometimes too important to leave to today's WiFi, LPWAN or ZigBee. Enterprises in the IIoT era cannot not just purely rely on unlicensed wireless for their future, mission-critical connected systems.

I want to drill into this more, as it's critical that the cellular industry - and policymakers - do not over-reach, or ignore secondary/tertiary issues, as has often been the case in the past. My recent experiences with the 5G / mobile industry discussing "verticals" suggests that it is doing so again. 

There is also a "spectrum land-grab" going on, with the mobile industry lobbying governments to suggest regimes that favour traditional MNOs, rather than domain specialists and innovators. This needs a bright light shined upon it, as it is often duplicitous and ignores inconvenient facts about particular sectors, different models, and competing constituencies.

Smart Industries & Factories: thinking realistically about the connectivity needs 

The 5G-PPP group, for example, has written a very good document on the rise of the “Factories of the Future” (link), detailing numerous ways technology will enhance manufacturing and related industries. It talks persuasively not just about realtime connectivity for automation (robots, production systems etc), but also the growth in data collection and analytics, improved logistics and energy-management and so forth.

The report also covers the way manufacturing companies are themselves becoming services companies, with various in-field business models related to their products (eg airline engines provided as “power by the hour”). It’s a fascinating summary of the changes that lie ahead for industry, and the on-site communications needs that extra use of new integrated IT systems will bring. It highlights the need for low-latency, high-speed, super-reliable wireless connectivity – in some cases with requirements as stringent as 1ms cycle times, jitter below 1µs and other parameters like timing sync in the nanosecond range.

But while the 5G-PPP report – and assorted other documents like it – suggest that 5G might be able to deliver the various QoS characteristics, it doesn’t make a case for why that connectivity should be provided onsite as a service by an MNO, in that operator’s licensed spectrum, and paid for out of OPEX on an ongoing basis. 

Indeed, it points out that many other network technologies will coexist and need to integrate with each other – Industrial Ethernet, WiFi, ZigBee, LPWAN and various industry-specific standards such as WirelessHart and ISA100.11a [no, I hadn’t heard of them either]. Most mobile operators are ill-suited to perform that integration, as most of those networks are owned, not service-based.

A similar set of critical-wireless issues could apply in many different industrial sectors:

• “Closed loop” industrial systems in a factory or plant
• Equipment in hospitals, from care-robots to portable bedside sensors to surgical systems in operator theatres
• Trains and operational systems on railway networks
• Automated vehicles at an airport (eg baggage handling systems)
• Construction machinery and sensors on a building site
• IoT systems in remote regions not covered by normal cellular networks (eg mines, offshore energy facilities)
• High-voltage grid sensing and operations by utility companies
• Potentially, various use-cases for smart cities, and smart farms, such as automated transport systems or agricultural machinery

In a nutshell, there are going to be many instances where the IoT systems will demand extremely high wireless network performance, reliability and availability on a particular company’s site. That connectivity system will need to comply with that industry and location’s specific regulatory requirements (eg safety), and integrate with both the other network types and the IT/industrial systems in use.

In terms of business models, while some aspects of IT are outsourced (eg to cloud services), industrial companies do not want to obtain every capability "as a service", with ongoing payments. In many cases, they may want owned assets, for security, IT integration or control/regulatory reasons - or even because their cost of capital is even lower than telcos'. Where they do want to acquire IoT-related managed services, they are likely to want a central provider, rather than obtaining connectivity through a different contract.

It is naïve to imagine that AT&T or Vodafone is going to be providing “robot anti-collision-as-a-service”, via an edge-computing node built into a 5G small cell, running in the MNO’s 42GHz mmWave spectrum with the MNO’s SIMs/eSIMs in the robots. Neither are patients going to be too happy being operated on by a surgical robot, which is sending pictures to the doctor via an IMS core. (Does RCS messaging have a spleen emoji, I wonder?).

It is also naïve to imagine that safety-critical systems will be trusted to WiFi running in totally unlicensed and uncontrollable spectrum.

In other words, closed-loop industrial systems are unlikely to benefit from a telecom operator’s involvement given that it is, quite literally, out of the loop. Even if it is possible to give control of a “network slice” to the company, how far does that extend in reality? Is a manufacturer going to be happy just being a glorified MVNO, without “administrator” access all the way to the radio? If a mining company wants to completely shut down a RAN temporarily (eg while detonating explosives), how does it do that? 

In other words, there needs to be a good way for large industrial facilities to operate wireless networks, in some form of licensed spectrum, without the involvement of MNOs.

 

The regulatory answer: spectrum-sharing. For cellular or other technologies

There are three broad types of spectrum management:

• Dedicated licensed - the familar style of license that is used for mobile networks today, where specific operators (MNOs) gain rights, usually through auctions, to particular frequencies exclusively. (This also applies to broadcasters, satellite operators, government bodies etc). This allows full management and therefore guarantees of QoS.
• Unlicensed / license-exempt - used for WiFi and other "ISM" (industrial, scientific, medical) applications. No specific user license is needed, which lowers costs but also risks interference and congestion.
• Shared spectrum, or Dynamic spectrum access - multiple users get access to a given band, but it is not a "free for all". There are some mechanisms to ensure separation, fairness, pre-emption, manageability and so forth - but not nationwide exclusivity.

In my view, the last option needs to be utilised much more, if Industry 4.0 has a chance of success. We need to avoid strategic over-reach by the cellular sector, which is lobbying hard for more dedicated spectrum in an (understandable but doomed) approach to insert MNOs into many new IIoT value chains. It also hopes to disenfranchise other stakeholders in what is likely to be a "land grab" in coming years - there are various new bands like 600MHz, 3.5GHz and whole swathes above 6GHz that are being lined up for "harmonisation" in 2019 at the next World Radio Congress.

At this point it is worth noting that there are various approaches to using shared spectrum emerging. We have had "TV white spaces" for a while, although it has had relatively little use. Some legacy wireless networks such as PMR (public mobile radio) have used shared frequencies. Fixed-wireless links for point-to-point connections, are commonplace in industry already. Scientific uses (eg radioastronomy) coexist with other applications. 

Looking forward, there are various technical approaches such as listen-before-talk, or geographic (or other) databases that allow geo-fencing of spectrum rights. There can also be forms of spectrum sub-leasing, with the approval of regulators - or occasionally just illegal or corrupt use of someone else's bands, in remote areas.

There are also differences between sharing existing "primary" users' bands, or dividing up new bands on a basis other than dedicated national licenses. For instance, the former could include exploiting military or coastguard frequencies in peacetime, or inland. The latter might use a registry or database, and employ a spectrum manager function to optimise fees for the government, or perhaps look to maximise benefit to the wider economy.

This post isn't the right place to discuss all the differences between models such as LSA (licensed shared access) mostly examined in Europe, or the more-ambitious SAS (spectrum access system) discussed in the US.

There are plenty of analyses and white papers around, such as from Intel (link), GSMA/Deloitte (link), Plum Consulting (link) and many more. They all vary in their in-built biases, and do not always think through the typical structures and business-models of verticals that might need connectivity in future. I'll delve more into the options another time.

What is critical is that whatever system is used makes it easier for new wireless stakeholders and innovators to emerge, especially around IIoT applications for in-building and on-campus networks. While there are some opportunities for today's MNOs, there are many other plausible use-cases for 5G especially, that can only be viable if others are involved.

Network equipment vendors need to play a careful and nuanced game here - they obviously don't want to alienate their traditional MNO customers, but they also need to build their direct-to-enterprise solutions and sales, to rescue flattening revenue lines.

What companies would deploy networks in shared spectrum?

So if traditional telcos & MNOs aren't always the right organisations to provide onsite IIoT / Industry 4.0 connectivity, then who is?

This is a complex and sector-specific question, and will likely vary over time, and by country.  

Some industrial companies will be big enough and skilled enough to build and run their own internal wireless networks, just as they run their internal fixed networks. They can hire 5G or advanced WiFi engineers as easily as telcos. A car manufacturing plant might deem it strategically important to run its own network. So might a major airport. They would ideally have a geographically-specific shared spectrum license.

It could also be the manufacturers or integrators of IIoT systems - perhaps GE, IBM, ABB, Siemens, Schlumberger, Honeywell, Philips or similar firms. As they operate in multiple locations, they may have to deal with multiple spectrum regimes and approaches, depending on local rules. A power station in Japan might have a different network ownership model to a chemical factory in Canada, or a hospital complex in Souh Africa. There may also be different roles for private (or MNO/MVNO) use of 4G/5G, WiFi running in reliable spectrum, or LPWAN technologies.

Then it is likely that we will see the emergence of vertical-specialist services companies. They could be airport-management firms, oilfield-services providers, or simply dedicated IoT and industrial connectivity players. Some will evolve from today's niche MVNOs and platform providers. Perhaps Cisco Jasper could be one, network vendors' managed-services arms, or startups and spin-offs from existing industrial suppliers. Further, many of the previous set of IoT manufacturers are moving to become forms of service providers themselves, as the 5G-PPP paper discusses, for which wireless connectivity could be an embedded enabler, in the same fashion as electricity from embedded generators.

Lastly, we will probably see WISPs, fixed-broadband and fixed/cable operators move into this space - especially where they have existing big enterprise customer base and integration/management skillsets and resources.

All of these groups could benefit from easier availability of "controllable" spectrum, beyond the current limited scope for fixed point-to-point links. In most cases, I'd expect geographically-limited rights to be the best approach. This would likely need some efficient mechanism for creating the issuance, registration and resale of such sharing rights. Perhaps a blockchain-based registry (and perhaps even smart spectrum contracts) may emerge as a suitable underlying platform, although the timelines might not be aligned perfectly here.

Companies that cover a very broad area for IIoT, and have both fixed assets and mobile users will have a very different set of requirements, and may turn out to need dedicated spectrum to themselves, or operate in partnership with MNOs somehow. Railways, utility companies and public safety agencies are examples. For instance, control systems for the high-voltage electricity grid cannot rely on MNO connectivity - as the MNOs' cell sites rely on the utility firm's power. If there's a power outage, you risk ending up with a chicken/egg dilemma, unless there's robust diesel backup at every cell site

Again, however, there will be a need to look at spectrum policy, in the light of the needs - technical, operational AND commercial - of different end-use sectors.

Conclusion & Recommendations for Regulators

Regulators need to continue with a push for shared spectrum models, especially around 5G. While MNOs definitely need a lot more exclusive spectrum for mobile broadbrand, it is becoming much less-clear that IoT and IIoT use-cases are optimal for the traditional services/subscription model preferred by the mobile industry. There are separate arguments for allocations of shared spectrum below 1GHz, between 1-6GHz and for 6GHz and above.

WiFi has demonstrated the huge value to economy and society of unlicensed wireless. It has unleashed immense consumer welfare and innovation in usage models, including in industry. Critically, it can be offered as a service, owned outright, provided as an amenity, sponsored, bundled, integrated and numerous other commercial forms. 

WiFi's "generativity" needs to be enhanced with "controllability" for mission-critical IoT, and also perhaps ultra low-cost IoT for wide areas.

This suggests that shared spectrum should be made available, with the expectation that it will be used for private 5G (or 4G) networks, to cover use-cases and business models that MNOs are poorly-equipped to address. Governments and regulators need to be wary of representations from the cellular industry that push a "monoculture" of national, subscription-based connectivity. If they go that route, they need to think about coverage rules applying to the inside of enterprise facilities, not just broad national statistics.

Supra-national bodies like the ITU and the various European regulatory bodies such as the EU Commission, CEPT and BEREC also need to grasp the limits of the incumbent cellular model in enabling Industry 4.0. It has its role, but so do other paths and options. However, the industry "noise" from trade associations, academia and elsewhere is overwhelming in its narrow view of the traditional MNO model. The coming of Industry 4.0 demands a reset - not a fallback to historical approaches to wireless.

It's also worth pondering if the concept of running LTE in unlicensed spectrum mostly used by WiFi (MuLTEFire, LAA, LTE-U etc) should be considered in reverse. Is it possible to use WiFi in mostly-empty, dedicated frequency bands notionally designated for 3G, 4G, 5G? Would that need change to ITU's regulatory definitions of IMT (International Mobile Telecommunications)? Future wireless won't always be international, moving about, or even "telecoms" in the traditional sense, anyway, so it is debatable whether all 5G should really be deemed IMT-2020 by ITU and national regulators. 

Such a move would be hugely controversial, but since lots of studies show that LTE and WiFi can coexist happily, it should be technically feasible in notional licensed bands as well as unlicensed. There are already pilot examples of WiFi running in licensed spectrum - bodies such as WiFi Alliance and IEEE 802 should consider it more fully.

The bottom line is this: if industry and society is to benefit from IIOT, automation, smart systems using AI, and a whole host of other innovations, it needs reliable wireless connectivity that can be owned outright, not just paid for on a service basis. The best way to deliver this is via shared-spectrum models that allow new entrants to build private, or system-integrated wireless networks for Industry 4.0.

Dean Bubley is an analyst and futurist for the telecoms industry. His company, Disruptive Analysis, advises vendors, operators, regulators and investors on technology trends, business models and policy. This spans network innovation, communications apps/services, and advanced technologies. Please get in touch if you are looking for consulting or public-speaking assistance - information AT disruptive-analysis DOT com.