5G and Beyond

Orange Ups 5G Broadband Stakes in Romania

Cost hurdles
Spectrum availability is outside Orange's control, but Climoc is anticipating a government auction of 26GHz spectrum in the second half of 2019. While these airwaves do not carry signals over long distances, they provide much higher-speed connections than lower frequency bands. After receiving an experimental license, Orange was able to use 26GHz spectrum during its trials, relying on a mixture of indoor and outdoor customer premises equipment (CPE) from Samsung to overcome the challenges of signal propagation. Assuming commercial licenses are awarded in late 2019, Climoc sees a 5G broadband services launch in 2020 as a possibility.

Unless regulators are hell bent on crippling the telecom sector, as some did when 3G licenses were sold, they seem unlikely to set high base prices for 5G spectrum. The real concern is about investments on the network side. According to Orange spokespeople, each antenna site can serve between 10 and 30 customers, which does not seem like a huge number, and Orange will also have to factor in the CPE costs per home. Then there is the expense of providing "backhaul" for all that mobile traffic. (See Europe's Backhaul Black Hole Looms Above 5G.)

"The technology will require some heavy investment because the radio sites need connecting by fiber," explained Stefan Slavnicu, Orange Romania's chief technology officer. "There will also be the cost of densifying the network."

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Virtualization, which separates network software from underlying hardware and promises cost efficiencies, might help to address some of the investment concerns. While Orange prefers to highlight this technology as a way to speed up service development and deployment, the virtualization of its radio access network (RAN) would give it some "flexibility" when using 5G for broadband, said Vamparys. (See Is vRAN Still Too Hot to Handle?.)

Its trials, accordingly, used Samsung's virtualized RAN technology, and Orange has also made progress on virtualizing its "regular" RAN. In essence, this means running some baseband functions as software programs on generic hardware, which can then be housed in data facilities to boost efficiency. Although Vamparys is disclosing few details at this stage, the update suggests some of the operator's previously voiced concerns about the operational complexity of RAN virtualization are starting to recede. (See NFV Is Down but Not Out and Orange: Still No Clear Business Case for vRAN.)

That said, Orange appears to have opted for a higher layer "functional split." Put simply, this means it is virtualizing only some of the baseband functions and will therefore not realize the same "coordination gain" as an operator that has gone for a more comprehensive lower layer split. Explaining the concept of coordination gain during a previous interview, Gabriel Brown, principal analyst for mobile networks and 5G at Heavy Reading , said: "You can coordinate which resource blocks are allocated to which user at which point in time at a microsecond level, and you can reduce interference and improve performance and efficiency."

The drawback of a lower layer functional split is that it puts far more pressure on the "fronthaul" connections between radios and baseband processors. Orange appears to be steering clear of this option in Romania because the fronthaul burden would likely necessitate a bigger investment in fiber.

While 5G is no kind of panacea for Orange's broadband challenges in Romania, it could be an economical means of providing connectivity for some consumers and businesses. The crucial factor is the return on investment. If Orange cannot make the numbers add up, it may need to find an alternative way to satisfy customer demands.

— Iain Morris, International Editor, Light Reading

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