3rd Neutral Host Workshop + OpenRAN for shared networks. Early bird still available

NOTE: Owing to uncertainty around the impact of Coronavirus on travel, event attendance, company policies & venues, this workshop has been postponed from 31st March until 7th July. We have contacted existing registered attendees to discuss the options

On March 31st  July 7th I'll be running my 3rd public workshop on Neutral Host Networks in central London, together with colleague Peter Curnow-Ford.

As well as covering the basics of new wholesale/sharing models for MNOs, both with and without dedicated spectrum, we will also be looking more closely at the fit between NHNs and new virtualised vRAN / OpenRAN technologies. 

We'll cover all the various use-cases: metro-area network densification, indoor systems for various venues, road/rail coverage, rural wholesale models, FWA and more. 

The links (and differences) between neutral-host and private LTE/5G will be discussed, as well as alternative models such as multi-MNO sharing or national roaming. (see this post for some previous thoughts on this)

Different countries' competitive, regulatory and spectrum positions will be covered, to assess how that will impact the evolution of NHNs. 
 
Early bird pricing is available before June 7th.

Full details and registration are available here

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
 

Neutral Host Networks - Announcing July 9th Workshop on a key industry trend

One of the most interesting trends at present is the reinvention of "wholesale" in various parts of the telecoms and computing industry. Often rebranded as multi-tenant or open-access, there are growing parallels between a whole set of areas I'm following:

• Neutral Host Mobile networks (more on this below)
• Open-access fibre (longhaul & metro)
• Shared spectrum bands
• 3rd-party cell tower providers (and also ducts and poles)
• Colocation data-centres
• Public cloud PaaS / IaaS
• Multi-tenant NFV platforms
• 4G / 5G MVNOs & network-slicing
• Hosted telephony, UCaaS & cPaaS
• eSIM and multi-IMSI SIM cards

In other words, the technology world is getting much smarter about sharing assets and access, while maintaining - or improving - competition. Telcos, IT companies and enterprises often cannot justify the risk and capital involved in having dedicated - and possibly replicated - facilities. There is no point in every business having its own datacentre, or every mobile operator building its own tower on a given hilltop. 

Sharing - and some form of neutral / open / wholesale intermediary service provider - often makes more sense. Regulators are recognising this in many domains as well.

I've written & spoken about the mobile angles on this for a while - I've covered MVNOs in the 5G era (link), shared spectrum for private mobile networks (link) and open-access fibre for backhaul (link). I've also watched the evolution of small cells and related business models for many years - I first met ip.access in 2001.

Neutral Host Mobile (NHN) fits directly into all of these trends. I'm seeing huge interest in organisations building multi-tenant mobile networks in locations that the normal MNOs cannot address for economic or practicality reasons. In-building, metro densification, rural and road/rail-side use are prominent examples. 

The idea is that an NHN builds a network (with or without its own local spectrum), and the other companies either roam onto it, or used its shared facilities for their own radios.

This has got huge attention, especially with the rise of CBRS in the US, and the realisation that 5G will need lots of small cells, especially in cities. Sharing some or all of the infrastructure makes sense, at least theoretically. It also ties in with edge-computing, MVNOs and various of the other wholesale/hosting models I mention above.

So I'm running one of my periodic small-group workshops on NHNs, on July 9th in Central London. As usual, I'm doing it with a colleague - this time Peter Curnow-Ford of Viatec Consulting.

(I've previously run workshops on the Future of Voice, Telco-OTT Services, Private Cellular, AI for Telecoms, Blockchain for Telecoms, and 5G+MVNOs)

If you're interested in attending the public session, the full details are on this page (link)

Alternatively, if you are interested in a private workshop or deeper advisory engagement, please drop a message to information  at disruptive-analysis  dot com

 

 

Private cellular networks - why Ofcom's UK spectrum proposals are so innovative

On December 18th 2018, Ofcom announced two consultations about new 5G-oriented spectrum releases (link), and potential new models for spectrum-sharing, rural mobile coverage and related innovation (link). 

I've already commented briefly on Twitter (link) and LinkedIn (link), but it's worth going a bit deeper in a full post on this - particularly on the aspects relating to private networks and spectrum-sharing.

NOTE: this is a long post. Get a coffee now. Or listen to my audio commentary (Part 1 on the background to private mobile networks is here and Part 2 on the Ofcom proposals is here)

My view is that 2019 is a key breakout year for new mobile network ownership and business models - whether that's fully-private enterprise networks, various types of neutral-host, or a revitalised version of MVNO-type wholesale perhaps enriched by network-slicing. 

This trend touches everything from IoT to 5G verticals, to enterprise voice/comms & UCaaS. I'll be covering it in depth. I also discussed it when I presented to Ofcom's technology team in November (see slides halfway down this page), and it's good to see my thinking seems to align fairly closely with theirs.


This was the future, long ago

Localised or private cellular networks - sometimes called Micro-MNOs - are not a new concept.

Twelve years ago, in 2006, the UK telecoms regulator Ofcom made an unusual decision - to auction off a couple of small slices* of 2G mobile spectrum, for use on a low-power, localised basis for a number of innovative service providers or private companies' use. (Link). A few launches occurred, and the Dutch regulator later did something similar, but it didn't really herald a sudden flourishing of private mobile networks. 

*(The slices were known as the DECT Guard Bands, which separated GSM mobile bands from those used for older cordless phones, widely used in homes and businesses)

Numerous practical glitches were blamed, including the costs / complexities involved in deploying small-cells, the need for roaming or MVNO deals for wide-area coverage, and the fact that the spectrum was mostly suitable for voice calls, at a time when the world was moving to mobile data and smartphones. 

Unfortunately, there was also no real international momentum or consensus on the concept, despite Ofcom's hope to set a trend - although it did catalyse a good UK-based cottage industry of small-cell and niche core-network vendors.


Going mainstream: private / virtualised networks for enterprise & verticals

At the start of 2019, the world looks very different. There is a broad consensus that new models of mobile network are needed - whether that is fully-owned private cellular, more-sophisticated MVNOs with their own core networks, or future visions of 5G with privately-run "network slices". 

There's a focus on neutral-host networks for in-building coverage, proponents of wholesale national "open" networks, and a growing number of large non-telecoms enterprises wanting more control and ownership.

It is unrealistic to expect the main national MNOs to be able to pay for, deploy, customise, integrate and operate networks for every industry vertical, indoor location or remote area. They have constraints on capital, personnel, management resource, specialised knowledge and appetite for risk. Other types of network operator or service provider are needed as well.

In a nutshell, there is a wide recognition that "telecoms is too important to just leave up to the telcos".

I've been talking about this for several years now - the rise of unlicensed cellular technologies such as MulteFire or Huawei's eLTE, the growing focus on locally-licensed or shared spectrum for IoT or industry use, and the specific demands of rural, indoor or industrial network coverage and business models.

(As well as non-MNO deployed and owned 4G/5G networks, we will also see a broad range of other ways to deliver private capabilities, including various evolutions of MVNO, mobile SD-WAN and future network-slicing and private cores. But this particular consultation is more about the radio-centric innovations).


Where is the action?

But while there has been a lot of discussion in the UK (including my own presentations to Ofcom, the Spectrum Policy Forum and others), the main sources of action on private (licensed) cellular have been elsewhere. 

In particular, the US push on its CBRS 3-tier model of network sharing - expected to yield the first local service launches in 2019 - and German and Dutch approaches to local-licensed spectrum for industry, have been notable. Unlicensed cellular adoption is (fairly quietly) emerging in Japan and China as well.

Plenty of other trials and regulatory maneouvring has occurred elsewhere too, with encouragaing signs by bodies like ITU, BEREC and assorted national authorities that private/local sharing is becoming important. 

In the UK, various bodies including Ofcom, National Infrastructure Commission, DCMS (the ministry in charge), TechUK/Spectrum Policy Forum (link) and others have referenced the potential for shared/private spectrum - and even invited me to talk about it - but until now, not much concrete has happened.


What use-cases are important here?

From my perspective, the main focus in actual deployment of private LTE has been for industrial IoT and especially the ability for large enterprises to run their own networks for factories, robots, mining facilities, (air)ports or process plants. Some of these also want human communications as well, such as replacing TETRA mobile radio / walkie-talkie units with more sophisticated cellular smartphone-type devices, or links to UCaaS systems.

These are all seen as future 5G opportunities by vendors too. They are also often problematic for many MNOs to cover directly - few are really good at dealing the specialised demands of industrial equipment and installations, and the liability, systems-integration and customisation work required.

Together with big companies like GE and Bosch and BMW, there has been some lobbying action as well. CBRS has had a broader appeal, with numerous other categories showing interest too, from sports stadium owners, to cable operators looking for out-of-home coverage for quadplay, or fixed-wireless extensions.

But I'd say that rural coverage, and more generic in-building use-cases, have had less emphasis by regulators or proponents of Micro-MNO spectrum licensing. That's partly because rural uses are often hard to generate business cases and have fragmentary stakeholders by definition, while in-building represents an awkward mix of rights, responsibilities and willingness-to-pay.  

Yet it is these areas - especially rural - that Ofcom is heavily focused on, partly in response to some UK Government policy priorities, notably around rural broadband coverage.


What has been announced?

There are two separate announcements / consultations:

• An immediate, specific proposal for 700MHz and 3.6-3.8GHz auctions to have additional coverage conditions added to "normal" national mobile licenses, especially for rural areas. This includes provisions for cheaper license fees for operators that agree to build new infrastructure in under-served rural areas, and cover extra homes in "not-spots" today.
• A more general consultation on innovation, which focuses on various interesting sharing models for three bands: the 1800MHz DECT guard bands (as discussed above), the 3.8-4.2GHz range and also 10MHz around 2.3GHz.

The first proposal is essentially just a variation of "normal 3.5GHz-band national 5G licenses", similar to the earlier 3.4-3.6GHz tranche which has already been released in the UK. Some were hoping that this would have some sort of sharing option, for instance for neutral-host networks in rural or industrial sectors, but that has been sidelined. 

Unlike Germany, which has just 3 MNOs and a powerful industrial lobby wanting private spectrum, the UK has to squeeze 4 MNOs' 5G needs into this band, with a big chunk already belonging to 3/UK Broadband. So, it has stuck with fairly normal national licenses. Instead, there's some tweaks to incentivise MNOs to build out better rural coverage. This helps address some of the UK government's and voters' loudly voiced complaints, but doesn't really affect this post's core theme of private/novel network types.

It is the second consultation that is the most radical - and the one which could potentially reshape the mobile industry in the UK. There are two central elements to its proposals:

• Local-licensed spectrum in three "shared" bands, with Ofcom managing authorisations itself, with a fixed pricing structure that is just based on cost of administration, rather than raising large sums for the Treasury. There are proposals for low-power and mid-power deployments, suitable respectively for individual buildings or sparsely-populated rural areas.
• Secondary re-use of existing national licensed bands. In essence, this means that any existing mobile band could be subject to 3rd-party localised, short-term licensing in areas where there is no existing coverage. This is likely to be hugely controversial, but makes inherent sense - essentially it's a form of "use it or lose it" rule for MNOs. 

Local licensing in shared bands
 
The local licensing idea has numerous potential applications, from industrial sites to neutral-hosts to fixed-wireless access in rural districts. It updates the 1.8GHz 2006 low-power wireless licenses to the new approach, and adds in the new bands in 2.3GHz and 3.8-4.2GHz. 

While I'm sure that some objections will be raised - for example, perhaps around the low-cost aspects of these new licenses - I struggle to find many grounds for substantive disagreement. It is, essentially, a decent pitch for a halfway-house between national licenses and complete WiFi-style unlicensed access. Like CBRS in the US (which is much more complex in many ways) it could drive a lot of innovative network deployments, but at smaller scale, as CBRS is aimed at county-sized areas rather than local areas as small as 50m diameter. 

There are numerous innovations here - and considerable pragmatism too, and plenty of homework that's been done already. The medium-power band, and the rural restrictions for outdoor use, are both definitely interesting angles - and well-designed to ensure that this doesn't allow full national/mobile competition "on the cheap" by aggressive new entrants. The "what if?" consultation sections on "possible unintended consequences" and ways to mitigate  them are especially smart - frankly all governmental policy documents should do something similar.

Ofcom also discusses options for database-driven dynamic spectrum approaches (similar to CBRS, white spaces and others) but thinks that would take too long to develop. It essentially wants a quasi-static authorisation mechanism, but with short enough terms - 3 years - that it can transition to some DSA-type option when it's robust and flexible enough. 

(As an aside, I wonder if the ultimate version is some sort of decentralised blockchain-ish decentralised-database platform for dynamic spectrum, which in theory sounds good, but has not been tried in practice yet. And no, it shouldn't be based on SpectrumCoin cryptocurrency tokens).


Secondary licensing of existing bands

This is the really controversial one.

It basically tells the MNOs that their existing - or future - national licenses don't allow them to "bank" spectrum in places where it's not going to be actively used. If there's no coverage now, or credible mid-term plans for build-out in the future, then (as long as it won't create interference) then other parties can apply to use it instead, as long as Ofcom agrees that there's no risk of interference. 

Unlike the shared-band approach (except for 1800MHz), this means that devices will be available immediately, as they would operate in the same bands that already exist. It would also potentially apply for the new 5G bands, especially 3.4-3.8GHz. 

There's a proposed outline mechanism from Ofcom to verify that suggested parallel licenses should be able to go ahead, and again a fairly low-cost pricing mechanism.

Clearly, this is just a broad outline, and there are a lot of details to consider before this could become a reality. But the general principle is almost "use it or lose it", although more accurately it's "use it, or don't complain if someone else uses it until you're ready".

There are a few possible options that have been suggested in the past for this type of thing - leasing or sub-licencing of spectrum by MNOs, or some form of spectrum trading, for instance. In some countries / places this has worked OK, for example for mines in the Australian Outback running private cellular, that have been able to do a deal with one of the national MNOs. But it's complex to administer, and often the MNOs don't really have incentives or mechanisms to do this at scale. They're not interested in doing site-surveys, or drawing up unique contracts for £1000 a year for a couple of farmhouses or a wind-turbine on a hilltop. Plus, there are complexities about liability with leasing (it's still the original licensee's name on the license).

While there will be costs for Ofcom to manage this process, it thinks they should be reasonable - it's pricing the licenses at £950 for a 3 year period. 

All this is pretty radical. And I expect MNOs and industry bodies to raise blue-murder about this in the consultation. Firstly, they will complain about possible interference, which is valid enough, but can be ruled out in some locations. They'll talk about the internal costs of the acceptance process. And above all, they may talk about "cherry-picking" and perceived competitive distortions.

The most interesting aspect for me is how this changes the calculus for building networks indoors, in offices, factories or public buildings. This could limit the practice of MNOs sometimes insisting that enterprises pay for their own indoor systems, for delivery of the MNOs' network coverage and capacity. It could incentivise operators to focus on indoor coverage, if they want to offer managed services for IoT, for example.

There's a lot of other implications, opportunities and challenges I don't have time to address in this post, but will pick up on, over the next weeks and months. There are technical, regulatory, commercial, practical and political dimensions.

I'm really curious to read the responses to this consultation, and see what comes out of the next round of statements from Ofcom. I'm probably going to submit something myself, as I can see a bunch of questions and complexities. Let me know if you'd like me to brainstorm any of this with you.
 

Spectrum is not enough

One thing is definitely critical for both proposals. The availability of local-licensed spectrum is not enough for innovators and enterprises to build networks. There are many other "moving parts" as well - affordable radio infrastructure such as small-cells, inexpensive (likely cloud-based) core and transport networks, numbering resources, SIMs, billing/operations software, voice and messaging integration, and so on. The consultations cover numbering concerns and MNC (mobile network codes), at least up to a point.

In some cases, roaming deals with national networks will be needed - and may be hard to negotiate, unless regulatory pressure is applied. As I've been discussing recently (including in this report for STL - link) this ties in with a wider requirement for revisiting wholesale mobile business models and regulation.


Conclusions

This is all very exciting, and underscores a central forecast of mine, that mobile network business / ownership models will change a lot in the next few years. We'll see new network owners, wholesalers and tenants - even as normal MNOs consolidate and merge with fixed-lie players.

I'd like to think I've played a small part in this myself. I've advised clients, presented and run many workshops on the topic, including my own public events in May and November 2017 (link), and numerous speeches to regulators, industry groups and policymakers. Industry, rural and in-building users need both more coverage and sometimes more control / ownership of cellular networks in licensed bands. 

There will need to be customisation, systems integration and a wide variety of "special cases" for future cellular. The MNOs are not always willing or able to deliver that, so alternatives are needed. (Most will admit, privately at least, that they cannot cover all verticals and all use-cases for 4G/5G). WiFi works fine for many applications, but in some cases private cellular is more suitable.

We're seeing a variety of new network-sharing and private-spectrum models emerge around the world, and a general view that they are (in some fashion) needed. What's unclear is what is the best approach (or approaches). CBRS, German industrial networks, Dutch localised licenses, or something else. I'd say that Ofcom's various ideas are very powerful - and in the case of the secondary re-use proposal, highly disruptive.

Edit & footnote: rather than "secondary re-use", perhaps a better name for this proposal is "Cellular White-Space", given that it is, in essence, the mobile-spectrum equivalent of the TVWS model.

If you'd like to discuss this with me - or engage me for a presentation or input on strategy or regulatory submissions - please reach out and connect. I'm available via information AT disruptive-analysis DOT com

Also, please subscribe to this blog, follow me on Twitter and LinkedIn - and (new for 2019!) look out for new audio/podcast and YouTube content. 

There are two audio segments that relate to this blog post:
Part 1 covers the general background to private cellular (here)
Part 2 covers the specific Ofcom proposals (here)
 

Blockchain for telecoms and networks: the emergence of ICOs & token-based platforms

There's a new trend I'm currently seeing emerge: ICOs (Initial Coin Offerings) for network/Internet-related businesses and communities. These use blockchain-based "tokens" (or coins) as a way to build decentralised marketplaces, for Internet connectivity or other communications capabilities like phone calls. Most have visions for long-term disruption of existing models, although they tend to start from more humble niches.

ICOs both establish a "currency" for these future markets, and provide funding for organisations responsible for their creation and maintenance. At least five network-related ICOs have been announced already, and more seem likely to follow in due course. (Disclosure: I'm an advisor to one of these five - more details below).

Note: If you've found this post through a link from a mainstream ICO/Bitcoin site or link, a quick introduction: I'm primarily a mobile and telecoms analyst. I study and advise on technology and business-model trends relating to network evolution and communications applications. I cover areas like 5G, IoT-oriented networks, voice & video communications, regulatory policy, the future role of telecom operators, and the impact of "futures" innovations like AI / ML, blockchain and drones on telecoms. Most of my clients are telcos or network equipment/software vendors. I'm not a fintech or blockchain generalist.

Note 2: I am also not an investment advisor of any sort. I'm not making recommendations here.

I've been covering the role of blockchains and distributed ledgers in telecoms and networks for well over a year now. I've spoken at events run by TMForum, IIT, Comptel and others about the telecom-sector use-cases (and complexities), and ran a recent public workshop in London alongside Caroline Gabriel (link). I recently participated in a webinar for Juniper Networks (link) and have a forthcoming white-paper in preparation for Juniper as well.

My general stance is "pragmatic optimism": Blockchain technology has many possible touch-points with the telecoms industry, from data-integrity management to back-office systems to billing - but maturity will take time. Some of the utopian "it'll change the world" and "telcos are obsolete" rhetoric is overblown. Distributed ledgers will have many uses and opportunities in telecoms/networking - but are unlikely to overturn or radically-disrupt industry structures, at least on a 5-10 year view.

Most of the uses I've seen discussed until recently have been around private (permissioned) blockchains, intended to improve processes and security within or between telcos and their suppliers. Another set have been around new services/capabilities to be delivered by telcos - for example, using smart contracts to enforce SLAs (service-level agreements), or for identity-management in IoT networks.

The ICO trend is different - this is about public blockchain-based functions that anyone can participate in - hence the "offering". The idea is to create common, distributed, dynamic ways of storing (and pricing) network-related value - especially for Internet access, but also voice communications and potentially other capabilities. 

Actually, telecoms is lagging here: there's been a much broader rush towards ICOs across many sectors over the past year. This website (link) lists hundreds, while this article from the Economist is a useful intro (link). It should also be acknowledged that they have attracted not-always-favourable attention from financial regulators, as there is limited official oversight and most are launched as "crowdsales" on the back of a white paper and some PR, rather than a regulated prospectus and well-monitored issuance on a specific stock exchange. There are some questionable-quality ICOs and a few dubious individuals involved, it seems. Nevertheless, they are a popular way for blockchain-based initiatives to get funding and early traction - and some will undoubtedly becomes stars, even if others flame-out like supernovae.

In a way, a system for exchanging telecoms capacity or data quotas already exists - it's possible to send prepay account "top-ups" between people or companies today, although those are usually in monetary form (ie PAYG credit), rather than being denominated in minutes or MB. That is unsurprising, given the diversity of different pricing models and network operators - it would be hard for me to gift a GB of data to a friend on a different network, but I can send them a £5 / $5 / €5 credit and let them buy the data themselves. There are also other ways to share network capacity, such as FON's WiFi community.

The various ICOs are attempting to "tokenise" aspects of networks and communications, allowing different models of monetisation, with pricing driven by an external market rather than telcos' / ISPs' internal marketing functions. Some link to an existing cryptocurrency and blockchain like Ethereum, while others are trying to create something new.

The ones I've discovered that are clearly related to telecoms/networks include:

• DENT Wireless (The website is here & white paper is here): This aims to act as a clearinghouse for mobile data quotas / allocations, between users, between MNOs, or for roaming "local breakout" via visited networks, using its tokens as a common currency. Its ICO, based on Ethereum, was in July. It is aiming to build up enough members as a "buying consortium" to exert pressure on operators to cooperate. It's got some interesting execs and advisors, notably including Rainer Deutschmann who has been instrumental in getting Reliance Jio off the ground in India. One of the use-cases is "donating GB of data to Africa" as a way to improve Internet access in emerging markets. One interesting angle is a tie-up with sponsored-data software company Aquto, which works with AT&T and others. My longterm doubts about the general sponsored-data model continue (the concept of "1-800 apps" is palpable nonsense), but this could be a possible workable use-case. The key differentiator appears to be its willingness (& knowledge) of partnering with operators rather than trying to displace them. Given the wide variations of mobile data pricing (& conditions) by operator, country and tariff - especially postpaid vs prepaid - I'm not sure there's an easy common denominator, though. The inbound roaming scenario may be very tough as well, especially as it may need users to manually select networks, which they may be locked-out from doing on subsidised/customised handsets.
• AirFox (The website is here & the white paper is here): This platform attempts to draw a link between mobile prepay credits, advertising, user-data and potentially micro-loans in future. It extends the current model of gifting or sending "recharges" to many international mobile operators' prepay customers, by shifting from normal payments to a cryptocurrency bought in a marketplace or earned by viewing ads. The model of "watch these ads and get free calls/credit/data" is not a new one (eg Blyk in the UK between 2007-09), but this is the first decentralised and tokenised one I've seen, linked to a global recharge network. It relies on a customised browser and also a dedicated ad-viewer/recharge app. The browser blocks native ads and replaces them with its own (and can also fingerprint the user by looking at other apps installed). Users can thus earn Ethereum-based "AirTokens" or alternatively they can buy them at market rate, to exchange for prepay credit / recharges. It's not obvious to me how AirFox proposes to "bulk buy" data from operators without wholesale/MVNO deals - in most cases I suspect it'll have to use the usual recharge channels. Its aspiration to "replace the current mobile ecosystem (applications, sites, advertisers, data purchases) with a more efficient new decentralized AirFox mobile ecosystem" seems unrealistic given that most mobile users prefer native apps (or web-pages rendered in apps). Nevertheless, the existing model of sending real ("fiat") money or top-ups seems to work, so there's a basis for an ad-supported model, although its existing stats imply a revenue of 1/17th of a US cent per ad. The ICO / crowdsale launches on August 29th.
• Ammbr (The website is here & the white paper is here): [Note - I am an advisor - see below]. This is an attempt to blend custom mesh-network silicon and hardware units, with a blockchain and token-based model for identity and a marketplace. While AirFox and DENT focus on sharing credits/quotas for normal personal mobile access, Ammbr wants to share the access network itself, and ultimately encourage build-out of extra coverage and capacity. Its network units (initially WiFi but with other radios in future) support decentralised micropayments, allowing the node owners to earn tokens and essentially act as their own local ISPs with very little friction or setup cost. While these will obviously need backhaul from normal telcos (fixed and/or mobile), once sufficient density is reached, meshes may reduce the total number of wide-area connections needed. An initial use-case is likely to be in developing countries, where micro-loans and other local (and often informal) sharing-model businesses have grown. The hardware-based model is obviously ambitious, but also means future potential to support multiple radios (imagine a CBRS-type shared spectrum or LPWAN module), and could also potentially host distributed edge-computing or NFV capabilities. There are both opportunities and various complexities and possible pitfalls I can imagine, plus there are alternative options for community/rural connectivity (I'm writing a piece on Facebook's Telco Infra Project & OpenCellular for my STL Partners research stream at present [link]). One aspect that's interesting, but which I'm not able to comment on authoritatively, is the unique blockchain model, based on Proof of Elapsed Time / Velocity, which differs from Bitcoin & Ethereum's Proof of Work. In Ammbr is it linked to a custom silicon processor, with claims of much better power consumption than other approaches. The ICO is upcoming in September.
• EncryptoTel: (Web page is here and white paper is here. This is very different from the other network-type ICOs, as it's more about (business) voice communications than data access. It is a version of an enterprise cloud PBX / UCaaS platform, with encryption, privacy protections and (anonymous) cryptocurrency payments. It allows both on-net VoIP calls (using standard SIP endpoints or dialler apps) and integration with the public phone network, as well as (in future) interconnecting with various messaging applications. It will offer both monthly subscriptions and a pay-as-you-go model. The white paper references video calls, but it does not appear to offer full-fledged UC functions. The roadmap describes a progressive roadmap of development and deployment, with full commercial launch expected in Summer 2018. The ICO occurred in May 2017.
• Mysterium (Web page is here and white paper is here) is a distributed VPN and data-encryption platform - essentially a higher-performing, blockchain-based version of Tor. It uses an Ethereum-based token system of micropayments. In its earliest phases it retains some central control, with the intention of removing this further down the roadmap. It will compete with commercial VPN products. Its ICO started at the end of May 2017.

[Note: some white papers get updated, so the URL might change with the version number - check the main websites for the latest versions] 

There are also various other ICOs relating to cloud-computing, storage and other related areas, such as Filecoin and Internxt. Another company called Crypviser (link) is developing a secure messaging app and also references secure voice calls in its white paper, although with few details.

So - will any of these, or future, ICOs lead to commercial, scalable networking or communications platforms? It's too early to tell. While the white papers typically given enough "vision" and a tentative roadmap, it's likely that most or all of these projects will encounter challenges and pitfalls, and may end up pivoting as events unfold (and customers'/users' behaviour develops).

One of the risks is that tokenisation itself may limit the possible business and pricing models - for example, how can any of them offer hybrid centralised/decentralised services, if that's what the market seems to want? Can they support sponsored/free models, or allow more granular differentiation? What happens if they contravene other services' T's & C's? How is customer support provided for decentralised capabilities? It is also unlikely that any such proprietary mechanisms or payment instruments will become globally dominant, so there will need to be paths to standardisation - as well as deal with the beady eyes of regulators if they become successful.

Nevertheless, this is an interestingly different direction-of-travel for telecoms/network blockchain, as it sits separately to the main thrust of work around private/permissioned use-cases I'm seeing from some vendors, various operators, bodies like TMForum etc. I still think that some of the back-office applications for blockchain in the telecoms sector have more short-to-medium term opportunity, but it's possible we could see a break-out here by a new entrant of the type discussed in this post. I'll definitely be keeping a watching eye on all of these. 

Please drop me a message at information AT disruptive-analysis DOT com if you want to discuss this more, or want a telecom/blockchain speaker or analyst for an event or workshop.


Footnote on Ammbr: Close contacts may have noticed I recently added an advisory role to my LinkedIn profile, for an organisation called Ammbr, mentioned above. At present, I'm just working on a consultative basis, but unlike most of my other advisory clients, it's not purely "behind the scenes" with execs in private under-NDA workshops, but has a public aspect to it as well. It's got a genuinely interesting combination of technologies (mesh, blockchain, custom silicon, potentially private cellular etc), some talented people, and while that means a lot of moving parts to fit together, there are some intriguing possibilities I'm glad to be able to help refine and prioritise.

Internally, my role is as a telecoms-sector expert and (to nobody's surprise) a general curmudgeon pointing out any risks, technical or commercial "gotchas", competition/substitution threats and anything that seems like wishful thinking. I should point out that this is a small part of my overall activities, I'm not "endorsing" it as such, and my normal Disruptive Analysis work on all areas of analysis & futurism is continuing. It's also not going to bias my views on other wireless technologies or business models, many of which are more-developed and which I'm also enthused about (eg private cellular). Drop me a message if you want to discuss this further (or want to discuss other consulting or advisory roles).