In the first two parts of our roundup of MWC 2023, we spent a fair bit of time highlighting the key issues facing the telco community around the world. We posited the burning platform theory in part 1 and the existential questions facing telcos, the Gordian Knot bedevilling telco infrastructure in part 2 where the common theme was the many challenges, strategic and even existential, that are staring telcos in the face. In part 3, we explored the new emerging ecosystem driving the growth of private wireless networks around the world. In this concluding post on MWC23, we shall explore a topic we have written about extensively in the past – the digital divide and attempts being made to bridge this.
Fixed Wireless Access
In 2020, we had begun our coverage in some earnest and met with a lot of companies to assess the emerging segment. The market has evolved significantly since then, though the three primary segments that we had written about in 2020 are still relevant.
Sub-6 GHz with 5G is growing rapidly as the vanguard of FWA, with successful deployments like T-Mobile in the US accounting for 2.6 million subscribers to date.
mmWave E and V bands have seen varied activity around the world with solutions from the point to multipoint (PtMP) community, though this is in relatively limited volume
mmWave 24-38 GHz has become a serious option for FWA deployments with the arrival of the Extended Range technology. The ability to reach up to 10 kms will make a huge impact in developing markets as well as countries with large hinterlands like the US, Australia, Canada and more.
CPE availability has improved significantly as supply chains ease. Chipsets and reference designs from semiconductor majors like Qualcomm and Mediatek are shipping in volume to their CPE partners. There are likely to be over 40 OEMs producing FWA CPEs currently and the vendor space is now crowded. Nokia continues to churn out its flagship 5G CPEs and set the pace. At MWC23, we met with several CPE vendors from China and Taiwan, including BEC/Billion, Askey, Baicells Technologies , Zyxel, #Greenpoint, #WNC, #CasaSystems, OPPO, and others. A relatively new entrant that could see real traction is Vantiva with their Falcon 5G CPE line.
FWA needs both 5G and WiFi to be a successful solution for bridging the digital divide. While 5G will act as the “backhaul” link to the cellular network, WiFi will continue to be the dominant wireless technology indoors within the household and/or enterprise site. The 5G modems and antennas themselves are increasingly table stakes with the availability of reference designs from the likes of Qualcomm. However, the vendors who can deliver a seamless integration, with self-install and other features will stand out, with multi-band, multi-mode CPEs becoming the benchmark.
Today, FWA is tied closely to the rollout of sub-6 GHz 5G macro networks and the ability of mobile operators to reuse the deployed/existing macro towers and related passive infrastructure for an FWA “BTS”. But is sub-6 GHz is the long term answer for FWA? What happens in an urban/suburban area when the 3.5 GHz band starts to get overloaded? What happens to a rural/remote household where spectrum is not possible but the economics of putting up a BTS in those areas is prohibitive? Out hypothesis is that eventually, mmWave becomes the “overlay” network for FWA as sub-6 starts to get clogged with consumer MBB traffic.
The answer could be about to play out with the emergence of mmWave Extended Range. For those who believed that mmWave can barely reach 100 meters, it turns out that serious people with real engineering chops have used a variety of techniques to push the coverage range up to 10 kilometers. One of the earliest trials of Extended Range was with US Cellular but the more recent commercial deployment will come from nbn in Australia. Not only has nbn deployed Extended Range technology from Ericsson, they have also partnered with Nokia for their mmWave outdoor CPEs. Extended range technology will make a huge dent in the digital divide in places with vast hinterlands like Australia, where both households, government, defense and other sites currently lie beyond the reach of terrestrial cellular networks.
mmWave antennas from the likes of Qualcomm are included in their Gen 2 (QTM547) and more recently announced Gen 3 (QTM567) FWA solutions. The Qualcomm Gen 3 solution is currently sampling and will ship towards late 2023 through OEM partners. Working in tandem with the latest Snapdragon X75 RF modems and utilizing features like Dynamic Antenna Steering, CPEs are now able to receive mmWave signals from up to 10 kms away from the radio sites.
In most scenarios involving cellular devices like smartphones and IoT devices, massive demand from China has always driven and even skewed the picture around availability and ASPs. However, China is not a big market for FWA, largely as a result of its extensive fiber network deployments in the last mile. The market that could produce really large volumes for FWA is India. Reliance Jio is already on record as targeting 100 million households connected with FWA and Bharti Airtel has also spoken about its plans for FWA. However, there are significant challenges in India on device ASPs and affordability for consumers. Moreover, service providers will need to achieve the right TCO in terms of both 5G macro tower availability as well as backhaul. This is going to take some work, but we do expect movement in the second half of 2023.
Non-terrestrial networks – drones, planes, and satellites
We have begun tracking the non-terrestrial network (NTN) segment as defined by the 3GPP recently, starting with drones and LEO satellite coverage. At MWC23, we had chalked out a few engagements/interactions to get our toes wet, so to speak, but got a lot more than we bargained for.
The stratosphere is much closer than we think
It all began with a chance encounter at the Airbus booth when we took a wrong turn on the Opening Day morning…after a 4-year gap, we needed a little extra time to get our bearings in the cavernous halls at the Fira. For those wondering why Airbus would be exhibiting at MWC23, they had but to look up to the giant Zephyr high-altitude platform system (HAPS) aircraft that was hanging from the rafters. HAPS aircraft first came into the mainstream consciousness with efforts by Google with Project Loon and Meta (Facebook at the time) with their Aquila aircraft. There are numerous efforts already underway under the auspices of the HAPS Alliance, with members ranging from the likes of NTT DoCoMo, Airbus, Intelsat, Nokia, and others. To be clear, HAPS will also cover balloons, gliders, and other form factors.
Coming back to Airbus, the unit that has developed Zephyr and is responsible for the development of the platform has now been spun out of Airbus into a new subsidiary called Aalto. Aalto has been set up with a view to enabling direct to device (D2D) connectivity with end user devices like smartphones. While Airbus will continue to own Aalto, opportunities for outside investments are also being explored. The key salient facts to know about the Zephyr aircraft include:
The Zephyr weighs a mere 75 kgs, and currently is “launched” by up to 5 people. Future versions could have a launch system.
Designed to fly up in the stratosphere up to 70,000 feet above sea level.
Can stay up in the air for 70 days currently with a target of getting up to 200 days using the on-board solar panels.
Currently offers up to 500 mbps but target data capacity is 2 Gbps
So why should we pay attention to Aalto? After all, it is not being set up to be a new service provider/operator. Aalto will be important to track as it is occupying a valuable no-man’s land in the stratosphere, an area that is too high for commercial drones but much, much lower than the Low Earth Orbit (LEO) constellations that are coming up from the likes of Starlink and OneWeb. More importantly, because the Zephyr will use on-board antennas with beamforming techniques over the same spectrum that is used by terrestrial operators. This has two important implications – one, direct to device communications can be enabled and two, no extra hardware is needed on the device, say, a smartphone.
More importantly, Aalto’s primary use case will be as a form of mobile backhaul technology in that it will be complementary to existing mobile network infrastructure, not competitive. Other use cases can be for connecting defense/government sites, disaster recovery, even a bunch of enterprise sites including airports, ports, maritime and other more “private network” scenarios. The Zephyr can be flown as a constellation in sync with a mobile operator’s specified coverage gaps and would act as “towers in the sky”, to quote a recent GSMA paper on the subject. In this scenario, terrestrial mobile coverage can be extended to virtually anywhere in a given country or area. The old telco, “we cover 99% of POPS” whitewash need not be trotted out anymore. Rather, they can say that they cover the entire navigable landmass. The more important implication of the towers in the sky scenario is that this coverage can be extended at a fraction of the cost point of a terrestrial network with today’s typical backhaul options like fiber or even microwave. Aalto claims that each Zephyr will have the coverage range of up to 250 terrestrial macro towers. Finally, IOT applications will get a huge boost from the sudden availability of satellite IoT networks.
Aalto has been spun out with a view to pushing up the timeline to commercial availability. Indeed, the Aalto executive I spoke to was touting commercial availability by the end of 2024. If this is the case, then we are a lot closer to NTN than previously believed. We believe that NTN is gaining traction as the mobile operator community has begun to realize that their goals of connecting everyone is simply not possible with the current models of terrestrial coverage.
We also had the chance to explore a couple of other emerging NTN options at MWC23.
Snapdragon Satellite – launched by Qualcomm at CES in January in partnership with global satellite provider Iridium, the service will offer two-way messaging and SMS for a variety of applications to devices that are equipped with the Snapdragon 8 Gen 2 Mobile Platform in flagship devices. Snapdragon Satellite will use Iridium’s L-band spectrum for uplink and downlink, and will be available in select regions starting in the “second half of 2023”. While the first announcement included Garmin as a partner OEM, Qualcomm subsequently announced a slew of new partners like Honor, Motorola, Xiaomi and others. While this is undoubtedly good for Qualcomm’s prospects of moving its flagship devices, we must admit that the current level of functionality with only two-way messaging is limited. This will, of course, improve as new satellite constellation capable of supporting NTN become available.
MediaTek Satellite – MediaTek has also jumped into the fray, with the introduction of the MT6825 chipsets for standalone 5G that are compliant with the 3GPP NTN standards and reportedly add barely $10 to the cost of the device. In the future, MTK chips will also support both NR-NTN and IOT-NTN standards in the 3GPP Release 17, which they claim as a major point of differentiation relative to the “proprietary” technologies of their competition. At MWC23, MediaTek had a cool demo where they showcased a smartphone as well as a Motorola Defy 2 “dongle” connecting to the Bullitt LEO constellation’s Satellite Connect platform. While direct cellular voice was not enabled due to the complicated permissions required at the Fira, MediaTek did have a WhatsApp call setup with pretty clear voice quality and a short time lag. The Motorola dongle could also be used to connect non-smartphone devices.
Operator Satellite Services – there were several mobile operators at MWC23 who were also showcasing already commercial or soon to be commercial services using LEO satellite connectivity. Telefonica had a session focused on their new Satellite IOT offering, where they spoke about their partnership, through their Telefonica Tech and Telefonica Global Solutions (TGS) divisions, where customers can use Telefonica’s “Kite” managed IOT platform with Sateliot’s LEO constellation for NB-IoT connectivity. Deutsche Telekom also had several demos and stations at their booth focused on the emerging opportunity with satellite and other NTN technologies for offering extended service for both mobility and IOT use cases.
Despite plenty of promise and hype, the initial buzz around drones has failed to materialize into a large-scale commercial opportunity. Drones remain largely a niche activity among hobbyists and for leisure and entertainment. There are several reasons for this, including the lack of enabling regulatory frameworks around the world, limited range and scale of drones, security concerns and the lack of an ecosystem.
Although significant challenges remain for drone operations at scale, there has been progress in recent years. To an extent, the onset of the pandemic has created favourable conditions for the usage of drones and regulators are now actively seeking to lay the groundwork for unmanned aircraft systems (UAS) operations at scale. We have been tracking developments in the US, Europe, Singapore, Australia, India, China, and Indonesia where policies for drones have been liberalized and frameworks are being created for drone operations. However, the common thread across much of the region is that although recreational usage is fine, regulators still mandate VLOS as a mandatory condition for drone operations but this limiting for most use cases.
There is growing momentum for drones to go beyond the visual line of sight (BVLOS) of a human operator. This is especially valid for enterprise use cases as opposed to recreational consumer usage. For BVLOS, drone connectivity to a cellular network (i.e., 4G Long Term Evolution [LTE] or 5G) can resolve several the challenges currently facing drones. However, while it is pertinent to think of a drone as a connected endpoint (like an IoT device), IoT networks are not ideal for wider mobility scenarios. Cellular networks can help with the identification and registration of drones, traffic management, tracking of drones and payloads, security, and other requirements for drone management.
AT MWC23, we had a few conversations/sessions around drones.
Telefonica – we attended a Telefonica session on drones where they highlighted a very interesting project that they have initiated in partnership with Correos (Spain’s postal service) as the end user and in collaboration with Ericsson, Gradiant and Gensys. The primary goal of this project is to develop the use case for package delivery based on 5G-connected drone air traffic control. “The main objective of the project, for which C-V2X (connected car) and RTK technologies for precise location are applied, is to evaluate how the 5G network can facilitate the development and implementation of services with drones in urban environments.” The most interesting aspect of this session was not just enabling the drones to talk to each other in real time and charting out flight paths taking restricted area warnings into account for package delivery, but the fact that Telefonica is positioning itself as the “operator” with an air traffic control platform. This pilot project bears close watching as its success would mean that there is a new monetization opportunity available for 5G.
Ericsson Drone Platform – we had a meeting with the folks behind Ericsson Drone Mobility (EDM), a startup within the Ericsson umbrella. The EDM folks have built a “cloud-based platform that enables safe, secure and efficient drone fleet operations utilizing Telecom Network Intelligence”. This vision is predicated on the ability of the telcos to expose their network functions through APIs, thereby enabling developers on the platform to tap into specific capabilities for tracking, identification and others. EDM had a small stall on the GSMA booth and to us, this was a validation of the overall GSMA pitch at the show with their Open Gateway Initiative, which we covered in our Part 1 note on MWC23.
Qualcomm Flight RB5 Platform – is being positioned as the world's first 5G and artificial intelligence (AI)–enabled drone platform, which is also available in tandem with a reference design, targeted at drone manufacturers that would be primary consumers of Qualcomm's silicon. With support for long-range LTE, 5G, and Wi-Fi 6, as well as shorter-range Bluetooth, the platform will enable any drone to be "networked" and connected to mobile networks at all times. Besides handling all connectivity requirements, the platform also supports advanced computer vision, perception, and autonomy features, such as path planning and obstacle avoidance. This is done by utilizing the onboard AI engine that enables advanced imaging, zoom, multi-object detection and tracking, and more.
Our key takeaway from MWC23 was quite simply this. NTN is much closer to becoming reality than most currently believe. Drones have long been hyped but there is finally significant progress with enabling regulations and the emergence of 5G networks as enablers for BVLOS connectivity to enable a raft of new use cases. Early pilots and projects are encouraging and indicative of the potential monetization of 5G networks for telcos. Up in the higher orbits, broadband services from LEO satellites are beginning to take shape and a raft of new launches from the likes of Starlink, Amazon Kuiper and others. But it is the developments in the stratosphere that merit the most attention as these have the potential to change the current CAPEX models of mobile operators as they look to extend coverage and connect everyone and everything to their networks.