LONDON -- Private Networks in a 5G World -- Vodafone has again slammed government moves to reserve spectrum for organizations that have not traditionally built and managed telecom networks ahead of its publication of a new white paper setting out recommendations for an industrial 5G spectrum policy across European markets.
Robert MacDougall, the multinational operator's head of enterprise public policy, tore into Germany's decision to reserve 100MHz of spectrum for industrial giants like Bosch and Siemens, which have expressed interest in running their own private 5G networks as an alternative to using public telecom infrastructure.
"Our concern is that by taking spectrum out of a national auction you are creating scarcity," MacDougall told attendees here in London this week. "Our view is that in Germany it will create a consumer welfare loss."
The latest comments echo Vodafone's criticisms earlier this year, before Germany's 5G auction smashed analyst expectations in raising €6.5 billion ($7.2 billion) for government authorities. Operators including Vodafone and market leader Deutsche Telekom have blamed the shortage of spectrum that went on sale for inflating the license fees and complained the outlay will hinder their ability to roll out nationwide 5G networks.
Critics say operators fear being marginalized in the business sector. An organization with its own 5G spectrum could theoretically buy network products directly from an equipment vendor such as Nokia and operate its own campus services.
Several countries have announced similar plans to Germany, including the US, with its CBRS (Citizens Broadband Radio Service) scheme, and the UK, which is offering up spectrum in the 3.8-4.2GHz range for localized use.
However, MacDougall gave a more favorable assessment of the UK's proposals, saying they offered scope for the sharing and leasing of spectrum that does not exist in Germany. "Ofcom [the UK telecom regulator] took an approach to achieve similar policy objectives to Germany around innovation and rural coverage and yet got different outcomes," he said. "We support the Ofcom initiative and are working with neutral-host operators on spectrum sharing and leasing. That is a preferable approach from a policy point of view."
With a neutral-host system, one network built for a business customer would be able to support services provided by a multitude of operators.
Service providers including the UK's BT and Deutsche Telekom have argued their expertise and assets will ensure they remain important partners to organizations building private networks, regardless of controversial decisions about 5G spectrum allocation.
"The experience of running and operating networks -- we have that as a USP [unique service proposition] because we are doing it today on the public network," said John Vickery, BT's principal technology partner. "This market is big enough for everybody."
Yet even before regulators had reserved spectrum for local use, there were some troubling signs for larger service providers like BT. Heathrow Airport turned to SITA, a systems integrator, and UK Broadband, a small network operator today owned by Three, when it decided to invest in what is now one of the world's largest private mobile networks.
"MNOs [mobile network operators] have concentrated on the public and consumers and not really on the industry and that led us to look at smaller players," said Paul Crisp, the infrastructure design head at Heathrow Airport, in explaining the move. "We didn't necessarily want to use public players that couldn't really give high SLAs [service level agreements]."
Nokia's fledgling enterprise business, which reported 30% year-on-year sales growth in the recent third quarter, is a major concern for the likes of Vodafone. The Finnish equipment vendor has set up direct-to-enterprise sales channels and is understood to have cut operators out of some private network deals.
"The time is right to get excited about the enterprise opportunity," said Stefan Pongratz, an analyst with Dell'Oro, in a research note issued after Nokia's recent analyst event in Finland. "More countries are exploring how to allocate spectrum for verticals."
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— Iain Morris, International Editor, Light Reading