I recently attended a cable conference in London (Cable Next-Gen Europe), which as well as providing an update on the latest developments in the cable sector promised some thoughts on the outlook for cable and 5G.

A number of key themes emerged from the discussions, including the increasing pace of innovation in the cable market as network upgrades are set to make gigabit connectivity a reality. Cable network upgrades provide both opportunities and challenges for mobile operators as they begin to deploy 5G networks.

The in-home experience matters
There was a growing recognition from cable operators that it is not sufficient to view the network as ending with the home gateway, but rather to better understand what happens inside the home.

Unless they move in this direction, the risk is that the existing disconnect between customer expectations and actual user experience grows, both as more devices are connected in the home and as the advertised network speeds continue to increase (1GB offers are now being launched in both the US and Europe). Hence, we have solutions such as Mesh Wi-Fi getting included as part of the monthly subscription.

Other options included pre-installation checks or software solutions that could help user to better manage interference issues in the home.

As always, there are both opportunities and challenges here for the mobile industry.

In-building coverage is already an issue for many mobile users, whether in the home, office, or leisure location. This is likely to increase with 5G, given the higher frequency spectrum that these networks will use. The propagation characteristics of mmWave spectrum in particular are challenging, although the topic of in-building coverage for 5G has received relatively little attention to date. For fixed wireless access (FWA) solutions, some of which will compete with cable, getting the signal to the home can only be part of the challenge. With the first commercial offers already live, ensuring that there is adequate coverage inside the home should be a key element of the commercial offer.

Fibre, fibre everywhere
The conference provided a timely reminder that network speeds across the telecom industry are increasing, whether from the latest iteration of DOCSIS (3.1) or new all-fibre overbuild networks. As noted above, cable operators are already looking to commercialise 1GB services, with full duplex DOCSIS 3.1 promising symmetrical gigabit speeds and data rates of up to 10GB becoming realistic as fibre is pulled deeper into the network.

Cable operators are now mirroring traditional telecom operators in deploying more fibre. They are also increasingly being joined by non-telecom players including utility companies, local municipalities and private equity companies that are building out fibre networks in many regions. There is a broader question here as to whether we are set for another bandwidth glut, similar to that which emerged in the late 1990s as an abundance of cheap capital fuelled a proliferation of both long-haul and city fibre networks. While this question is beyond the scope of this blog, it’s a useful reminder that supply and demand do not always move in lockstep.

Of more immediate relevance is the competitive backdrop against which 5G services will be launched. Enhanced mobile broadband (eMBB) is one of the key initial use cases for 5G networks, offering both higher data rates to end users and increases in network capacity. However, the market backdrop brings both a marketing and a practical challenge for mobile operators: how to position 5G in the context of other gigabit connectivity solutions and how to not over-promise on speeds, at least in the early stages of network deployments.

Putting it all together
One of the more interesting sessions examined whether 5G is friend or foe. The overall tone of the session offered a mix of healthy realism and pragmatism. One of the cable operators with its own mobile network noted that 5G launches in its market in 2020 would be largely for marketing purposes and depend on moves from its domestic competitors.

There was a general view that, at least initially, it will be hard for 5G FWA to compete with installed fibre networks and upgraded cable, with spectrum still at early stages of licensing and the technology still evolving. However, the challenge could become greater over time, especially as the technology evolves and specifically as massive MIMO and beam-forming improve the bandwidths that can be delivered to individual homes.

The growing array of fibre builds noted above also provides some opportunities for collaboration. As cable operators deploy fibre deeper into their networks, it will create the opportunity to offer wholesale services to mobile operators for both fronthaul and backhaul solutions, as well as potentially edge-computing capabilities. Network densification and ongoing increases in data traffic will mean an increase in the number of cell sites and require upgrades to backhaul capacity, with fibre the most effective backhaul solution. While there was acknowledgement from panellists that neither the networks or business models are ready today, there is a clear opportunity for future collaboration.

For all the discussion of cable versus 5G, all of these conversations pointed to a common takeaway for everyone in the broadband ecosystem. Higher network speeds, whether fixed or wireless, are enabling a range of innovative new services.

In the consumer segment these range from streaming 4K content to online gaming, and the potential of AR and VR; while 5G and gigabit fibre also promise a range of new services in the enterprise space.

There is a bigger question here for all telecom operators, whatever their underlying network, as to how to move beyond the connectivity play and gain a greater share of the revenues that these services will deliver. Operators across the telecom space are looking to lower operating costs through network upgrades, but addressing the cost side of the equation alone is not the path to sustainability.

– David George, head of consulting, GSMA Intelligence

The editorial views expressed in this article are solely those of the author and will not necessarily reflect the views of the GSMA, its Members or Associate Members.