Webscale and transmission network operators' interests are aligning as the 5G era dawns
2016 Rewind: The biggest telecoms stories of the year
Our third annual Rewind feature looks back at the telecoms news stories that dominated the headlines and captured our readers’ attention on telecomasia.net in 2016. From start to finish, many of this year’s most popular stories were centered on 5G, VoWiFi and VoLTE, as well as the Myanmar market and the ongoing restructuring and M&A, among others.
Asian cellcos prep for 5G
It was a busy year for the APAC mobile sector, as mobile operators across the region have been stepping up their efforts in 5G trials during the year of 2016, in preparation for the technology’s commercialization by 2020.
In October, Nokia signed an agreement with Australia’s Optus to collaborate on 5G development, and revealed it is working with KT to deploy the world’s first 5G commercial trial network in 2017. Optus and Nokia plan to jointly conduct a 5G trial using Optus’ 3500-MHz spectrum, and will develop an early 5G prototype in the spectrum by 2017.
The announcement came a month after rival Telstra and Ericsson conducted Australia’s first live 5G trial in Melbourne using a combined 800MHz of spectrum, achieving aggregate speeds of more than 20Gbps in a real-world, outdoor environment. Telstra said the trial involved 10 times more spectrum than the operator currently uses with its 4G service. Ericsson’s 5G radio prototype equipment was used for the demo, which also achieved an indicative latency of at least half of that seen in current 4G networks.
In the same month, Softbank and its affiliate company, Wireless City Planning, officially kicked off its ‘5G Project’. As the first phase of the project, the two rolled out commercial services based on Massive MIMO technology from September 16. Under the plan SoftBank, which aims to be one of the first to adopt 5G commercially, has deployed the technology across 100 base stations in 43 cities across Japan. Around 30-40% of the sites are in downtown areas of the Tokyo capital.
The previous month Ericsson and Singtel completed what they say is the first live demo of 5G prototype technology in Southeast Asia, achieving a peak throughput of 27.5Gbps. The demo used Ericsson’s 5G radio prototypes to showcase the capabilities offered by the new networking technology, which also included demonstrating a latency as low as 2ms. At the demonstration, the pair also showcased the world’s first end-to-end low latency live video streaming over 5G.
Elsewhere, SK Telecom teamed up with Deutsche Telekom and Ericsson for the world’s first transcontinental 5G trial in July. In April, SKT and Samsung completed a field trial for its 5G system over 28-GHz millimeter-wave frequencies in an outdoor environment, following the formation of the new 5G Open Trial Specification Alliance with KT, Japan’s DoCoMo and US’s Verizon.
On the spectrum side, Australian telecoms regulator ACMA has proposed refarming spectrum in the 1.5-GHz and 3.6-GHz bands for mobile broadband, including potentially in future 5G networks. The United States, meanwhile, has become the first country in the world to allocate large amounts of spectrum for use by future 5G networks. In July the Federal Communications Commission (FCC) voted to free up nearly 11 GHz worth of high-frequency airwaves above 24-GHz for 5G use.
Voice is sexy again
Singtel launched Singapore’s first commercial VoWiFi service in August, following the success of its HetNet trials in the island-state. The trials, conducted in collaboration with IDA Singapore (now known as IMDA), confirmed that voice calls and texts can be sent over Wi-Fi in areas which are challenging for mobile signals. Singtel’s announcement came a month after rival M1 launched what it claimed as the nation’s first public native HD VoWiFi trial using HetNet technology, and months after 3 HK’s launch of a premium VoWiFi service that supports the use of up to five devices, including smartwatches tablets and PCs, along with a smartphone connected to the same account.
Meanwhile Thai cellco AIS also announced its plans to offer VoWiFi as a complementary add-on for its 4G services. AIS is initially offering VoWiFi for selected iPhone models, and detailed plans to expand its WiFi hotspot network from 120,000 to 160,000 this year and to 200,000 by 2017.Apart from VoWiFi, mobile operators across the region are also ramping up their rollout plans for VoLTE as well as cross-network VoLTE calls. In China, for example, China Telecom plans to launch pre-commercial VoLTE in 2017, while biggest rival China Mobile will expand VoLTE trails to nationwide commercial service next year.
In May Australia’s Optus commenced the rollout of VoLTE technology to the country’s major capital cities, while rival Vodafone Australia introduced VoLTE to subscribers later in the year, after launching VoLTE field and lab trials in February.
Taiwan’s Asia-Pacific Telecom (APT) also launched VoLTE services in May, and revealed it has reached 1 million 4G subscribers. APT also announced plans to launch VoWiFi services, without announcing a timeframe. Elsewhere, in a first for the Asean region, AIS and Dtac teamed up last October to facilitate cross-network VoLTE calls, while 3 HK completed a successful bilateral international VoLTE roaming trial with Japan’s NTT DoCoMo using S8HR technology.
Myanmar finally issues fourth mobile license
Myanmar continues to be one of the hottest telecoms markets this year, as the country sees the entry of its fourth mobile operator and prepares for new spectrum auction. In March, the Myanmar government picked Vietnamese military-run operator Viettel as the international partner for a consortium of 11 local technology and other companies selected to become Myanmar’s fourth mobile operator.
The following month, Viettel provided details of its plans for entering the Myanmar mobile market, including a goal of connecting 95% of the country’s population within three years. As part of this consortium, Viettel announced plans to roll out a 3G-only network on the 900-MHz and 2100-MHz frequency bands. The operator also aims to launch 4G services on the 1800-MHz bands if it secures the required licenses.
According to the March press release of the consortium, the fourth mobile operator should have applied for its license by the end of June. Yet local media reports that the fourth mobile operator is falling behind the deadline of applying for its license due to difficulties in negotiations among related parties.
If a fourth nationwide license is granted, the new mobile operator will have to compete with state-owned Myanmar Posts and Telecommunications (MPT) and foreign firms Ooredoo and Telenor. At the end of the first quarter of 2016, there were about 42 million mobile subscribers in Myanmar. MPT had a 46% market share, followed by Telenor’s 37%, and Ooredoo’s 16.5%.
In April, the consortium announced it would have a total investment of $1.5 billion, and Viettel will take a 49% stake in the venture. Meanwhile, The Ministry of Transport and Communications detailed plans to hold an auction for 1800-MHz spectrum in March next year, allocating spectrum to allow operators Telenor Myanmar, Ooredoo Myanmar and MPT to expand their 4G networks, the Myanmar Times reported.
The report cites the ministry’s deputy director of posts and telecommunications U Myo Swe as stating that spectrum will be made available to all operators equally. But it is unclear whether the planned fourth entrant will be included in the process.
Myanmar’s mobile operators have been constrained in their efforts to roll out 4G services by a shortage of spectrum, and have been eagerly anticipating the release of 1800-MHz spectrum. Telenor and MPT had initially applied to take part in an auction of 2600-MHz spectrum, but later decided to withdraw from the running and wait for the 1800-MHz allocation instead.
Embarrassing network outages
There had been a number of high-profile telecoms network outages in 2016, with Australian incumbent Telstra being most affected. The Australian incumbent has been struggling with a series of national outages taking place this year, affecting millions of customers using its broadband and mobile networks.
One outage in early June saw 75,000 broadband customers disconnected from the internet. This incident had followed another broadband outage affecting 370,000 customers in May. Yet three national mobile network breakdowns in February and March arguably hit Telstra’s reputation the hardest, and saw Telstra compensate customers with two free mobile data days.
Following those embarrassing network outages, Telstra revealed plans in June to invest A$250 million ($187.5 million) to improve its networks. Telstra chief executive Andy Penn said the investment was designed to boost its networks’ resilience and would include better procedures and tools for monitoring network problems and reconnecting customers after outages.
The A$250 million investment will include a A$100 million upgrade to its “core network,” A$100 million to increase its ADSL capacity, and the A$50 million upgrade to its mobile network announced in May following a review. Singapore’s SingTel and StarHub were also been hit with network outages taking place early December and October, respectively. As Telecom Asia goes to print, Singtel is still investigating the cause of its nearly 24-hour broadband outage, which was associated with servers being unable to assign IP addresses to customers’ modems. TV, fixed phone and mobile services remained unaffected.
While Singtel engineers have so far ruled out a DDoS attack, StarHub blamed DDoS attacks originating from its customers’ own infected devices for two broadband outages on October 22 and 24, leaving many home broadband customers unable to surf the web due to a spike in DNS traffic originating from infected machines.
Restructuring, restructuring and job cuts
There is no doubt that 2016 was another tough year for the telecoms sector, with a number of telcos and equipment vendors announcing organizational revamps or management shakeup to streamline operations.
In April, Chinese vendor ZTE revamped its top management in the wake of the US sanctions imposed on the company. The vendor appointed Zhao Xianming as chairman and president, and Zhang Jianheng and Luan Jubao as vice chairmen.
In the same month rival Ericsson announced a major restructuring, after the vendor fell short of market expectations with its Q1 results. As part of the restructuring aimed at helping stimulate a turnaround, Ericsson will divide its overall operations into five business units - network products, network services, IT, cloud and media - and one dedicated customer group for industry and society.
The struggling Swedish vendor also announced plans to cut around 3,000 jobs in production, R&D and sales and administration, through a combination of voluntary and forced redundancies and measures including outsourcing. The restructuring and headcount reduction form part of the vendor’s efforts to achieve 9 billion krona ($982 million) in net savings efficiency during 2017.
Moreover, Ericsson appointed long-time board member Bšrje Ekholm president and CEO, effective from mid-January. Ekholm will replace interim CEO Jan Frykhammar on January 16, who is standing in following the sudden resignation of Hans Vestberg in July.
Rival Nokia meanwhile commenced a program to cut thousands of jobs worldwide as part of the cost-cutting and transformation program associated with the takeover of Alcatel-Lucent. The program is aimed at achieving 900 million euros ($1.02 billion) in annual operating cost synergies by 2018.
Cisco also revealed plans to cut up to 5,500 jobs, or 7% of its total global workforce, after reporting flat revenue for its full financial year a 2% decline in revenue for the fourth quarter in August. The networking vendor said it will restructure to cut costs in lower growth areas, and allow it to focus its investment on priority areas including IoT, next generation data centers and the cloud.
On the operator side, Malaysia’s Axiata group announced a major organizational and management shake-up across its group of companies across the region. As part of the restructuring, Axiata has established a new unit to oversee its Southeast Asia operations, to be headed by Dato’ Sri Shazalli Ramly.
Japan’s Softbank also announced a restructuring to form a new domestic and a new global operations management company, each of which will become wholly-owned subsidiaries of SoftBank Group. The global division will encompass entities such as loss-making US telecoms subsidiary Sprint as well as SoftBank’s 32% stake in Alibaba Group, while the domestic business will take over the company’s mobile operations, as well as subsidiaries and affiliates such as Yahoo Japan.
M&A mania continues
Just like last year, 2016 ended up being a big year for telecoms acquisitions. The largest deal of this year happened in October when AT&T announced to acquire Time Warner for $85.4 billion. The merger, if approved by regulators, will give the US telco control of cable TV channels HBO and CNN, film studio Warner Bros and other coveted media assets. The acquisition, which is AT&T’s latest move to turn itself into a media powerhouse, is expected to close the deal by the end of 2017. Yet industry watchers expect the merger will likely face intense scrutiny by US antitrust enforcers worried that AT&T might try to limit distribution of Time Warner material.
Rival Verizon Communications is meanwhile in the process of buying internet company Yahoo for about $4.8 billion. To raise funds for the acquisition, which is expected to close in early 2017, Verizon agreed to sell 29 data centers in 15 markets to Equinix for $3.6 billion.
In Asia, Softbank arranged to buy out the British chipmaker ARM for a rich $31 billion to help cement the company’s future in the burgeoning IoT sector. The deal, announced in mid-July, is Softbank’s largest acquisition yet and the first major M&A in the UK since the Brexit vote.
Elsewhere, Malaysia-based Axiata Group entered the Nepal telecoms market with the acquisition of 80% in Ncell for $1.36 billion from previous owners TeliaSonera UTA Holdings and Reynolds Holdings’ SEA Telecom Investments. Axiata also entered into an agreement with India’s Bharti Airtel to merge their operations in Bangladesh - Robi Axiata and Airtel Bangladesh - to create an operator with a combined customer base of around 40 million in the country.
Airtel is reportedly considering selling a 5% stake in tower company Bharti Infratel to help reduce its $11.9 billion debt burden, while Vodafone India may buy out Telenor India. In Hong Kong, fixed-line operator HKBN got the green light from the Communications Authority for its proposed $83.6 million-acquisition of New World Telephone Holdings Limited, a deal which helps HKBN to increase its share of the enterprise segment.
Five more headlines that grabbed readers’ attention in 2016
Facebook spearheads TIP to speed up innovation
Facebook corralled several big-name telcos and vendors to form the Telecom Infra Project (TIP) with the ultimate goal of finding ways to help telcos open their infrastructure and scale it fast enough to keep up with escalating demand for data-hungry services. TIP, unveiled at the start of Mobile World Congress 2016 in Barcelona, was founded by Facebook, operators SK Telecom, Globe Telecom, Deutsche Telekom and EE, as well as Intel, Nokia and “other operators, equipment providers, systems integrators and technology companies”.
OTT video could save pay-TV, not kill it
At the Broadband TV Connect Asia conference in Jakarta early this year, several speakers made the case that OTT video isn’t the major threat to the traditional TV industry that some have made it out to be - not if you go by market share and actual revenues. Market forecasts suggest that by 2020 OTT video will only account for a fraction of the overall pay-TV revenue base in APAC, and the majority of that will be driven more by ads than subscriptions.
Thailand embarks on mass surveillance of social media
In mid-January Thailand’s technology crime suppression division issued a draft procurement document for a system to surveil all public Facebook and Twitter accounts against a target list of up to half a million individuals that can be identified through names, keywords or even facial recognition. Also on the list is Thailand’s most popular webboard Pantip.com.
Samsung issues recall over exploding Note7s
Samsung conducted in September a global recall of its Galaxy Note7 following reports that the device can overheat and even explode due to a faulty battery. While Samsung originally intended to swap the devices with replacements manufactured using a different process, the company was forced to cancel the line altogether after reports of these replacement devices exploding as well - a costly development at a precarious time for smartphone vendors.
True Corp deploys world’s largest 4T4R 4.5G network
Thailand’s True Corporation deployed in July what it said is the world’s largest commercial 4-transmit-4-receiver (4T4R) 4.5G network using Huawei RAN technology. Huawei provided its SingleRAN 4T4R technology for the rollout. To date True Corporation’s wireless division True Move has deployed over 6,300 4T4R sites.
This article was first appeared on Telecom Asia Dec2016/Jan 2017
Matt Walker / MTN Consulting
Webscale and transmission network operators' interests are aligning as the 5G era dawns