ITEM: The CEO of New Zealand fixed-broadband operator Chorus has called for a government-regulated shared 5G infrastructure program rather than every cellco building separate 5G networks. At least two cellcos have said the idea is “ludicrous” and “crazy”.
According to the New Zealand Herald, Chorus chief Kate McKenzie said that when you look at how much it would cost to cover the country with 5G – to include dense clusters of small cells, support for IoT, etc – it’s unrealistic to expect that every operator could pull off such a feat:
“In a 5G world, the amount of capital that’s going to have to be spent to build out those networks for a country of this size and this population, with small cells every couple of hundred metres – if three people (the current main mobile operators Spark, Vodafone and Two Degrees) do that, that’s insane.
“That’s just going to be not sustainable,” she said.
McKenzie favors a facilities-based infrastructure approach to 5G similar to the NZ government’s Ultra-Fast Broadband (UFB) program that aims to deliver UFB to 80% of the population by 2022 via a shared broadband infrastructure. (Chorus won around 70% of that project.)
Simon Moutter, managing director of incumbent telco Spark, blasted Chorus’ proposal as “entirely self-serving” and not in the interests of consumers.
“Infrastructure-based mobile competition has resulted in faster network rollouts, much lower pricing and a steady stream of product innovations, almost all funded by the industry players involved,” Moutter said in a statement. “It’s compelling evidence that competition is the best way to deliver great consumer outcomes. And any suggestion that taxpayers should be asked to pay for a 5G monopoly in our country is ludicrous.”
Moutter added that Spark isn’t against “sensible infrastructure sharing” that can speed up deployments or address visual pollution issues that might result from multiple network deployments. “But to jump straight to a conclusion that we need a monopoly network would be crazy.”
Moutter also noted that government subsidy programs for rural coverage – which the government is already doing via its Rural Broadband Initiative – might also be necessary for 5G, but this should only be considered once it’s clear that commercial rollouts wouldn’t be economically feasible.
Vodafone New Zealand said in its own statement that Chorus’ proposal was misleading, in part because the UFB program was created to address a problem that the mobile sector doesn’t have (“a vertically integrated incumbent and a lack of high-speed broadband”), and partly because it overstates the amount of new infrastructure needed for 5G, the New Zealand Herald reports:
“5G is an evolution of 4G and will involve a straightforward technology upgrade for the vast majority of cell sites.”
“We are confident the competitive market will deliver this upgrade without resorting to government intervention, as was the case when 3G evolved to 4G technology.”
Both operators accused Chorus of trying to create another monopoly for itself to go along with its UFB rollout.
The idea of a facilities-based NBN-like approach to 5G isn’t new, but it’s also not very popular with established cellcos.
Earlier this year the GSMA rejected the idea in a research report which found that wholesale access networks for mobile services are generally flops, and that network competition is much more likely to drive market growth and innovation. The report covered 4G rollouts, but it’s reasonable to assume the GSMA applies the same logic to 5G.