Following the broadband money

Free up fibre – Vodafone calls for equal access

with 5 comments

Capacity/cost crunch hits microwave backhaul

Capacity/cost crunch hits microwave backhaul

Vodafone has called on European regulators to ensure that non-incumbent-owned mobile network operators have access to fibre backhaul on the same terms and conditions as their in-house operators or face a declining competitive ecosystem.

The call stems from a looming shortfall in microwave capacity and prohibitive pricing of incumbents’ fibre, poles and ducts to cope with the fast-rising volume of data traffic.

Research by Analysys Mason commissioned by Vodafone found that incumbent operators favour their in-house mobile operators when it comes to accessto a fibre-based backhaul. “These inputs are not always made available to competing operators as a wholesale or retail product with the desired interface, quality, speed or price.

“The fact that the required inputs are not available, or are extremely expensive, may dampen competition in the mobile market in some countries because the fixed incumbent operator is usually (with the exception of the UK) also a major mobile operator and can gain benefits as a result of this vertical integration – specifically the much greater capillarity of its fibre network,” it said.

The leased line market, in which the mobile operators are a large segment, contributed £2bn/y to BT’s £18bn turnover, the researcher found.

Ben Wreschner, who leads Vodafone’s regulatory economics section, said all Vodafone wants is access on equal terms and conditions as the in-house mobile operator. He said Vodafone accepted that there couldn’t be a single price across Europe, if only because labour prices differ. Instead he called for a harmonised approach to access to fibre for mobile backhaul.

He called on the European Commission to provide guidance to BEREC, the European telecoms arch-regulator, for directives that national regulatory agencies (NRAs) can implement to give effect to this.

The study showed that independent mobile operators use microwave extensively to backhaul their traffic. But they are running out of spectrum. The shift to small cells for LTE traffic is quickly eating up the available capacity. Vodafone’s preliminary report for 2014 revealed that 4G smartphone users use about twice as much data as 3G users, mainly to stream video. Smartphone penetration in Vodafone’s European markets is around 45%. Both factors are pushing mobile operators toward fibre, which has the required capacity to ensure an acceptable user experience.

The MNOs’ options are to switch to so-called E-band microwave in the 60-90MHz band, which due to rapid attenuation of signals, will require many more sites to be rented; to rent access to commercial fibre where available; to rent regulated fibre from the incumbent operators, or to build their own fibre networks.

Vodafone has bought some of its own fibre backhaul (eg Cable& Wireless), but it has cost billions and doesn’t always cover the cities where demand is greatest. Building new fibre would duplicate existing fibre networks, take a long time, and cost a lot more on top of their expensive mobile licences.

Last week Ofcom said it would give BT a further period of non-regulation of fibre prices for high speed (above 1Gbps), where it holds an effective monopoly outside London. It also promised to rule soon on a TalkTalk complaint that BT operates an illegal margin squeeze on fibre prices.

Wreschner said he was watching the margin squeeze decision with interest, but stressed that that is a different market (retail) to Vodafone’s concern (wholesale) about backhaul. “We think the wholesale market needs specific regulation,” he said.

This is why, although they face similar problems as altnets trying to provide fibre to rural homes and businesses, the mobile industry did not speak out when the BDUK process was being set up, he said.





Written by Br0kenTeleph0n3

2014/05/26 at 08:58

5 Responses

Subscribe to comments with RSS.

  1. No surprises here. The stench of profit is pungent in the sentence “… to ensure an acceptable user experience”. I wonder how the MNOs will define “acceptable”? If we’re lucky, it’ll be based on public customer surveys, and not market share by a clear incumbent.

    Weren’t we all supposed to be watching TV on our mobiles with 3G? That never happened. Hype.

    With 3 bars of 3G on my iPhone 4S, in an area rich in fibre (a town with FTTC everywhere), yesterday I was unable to get the landing page for Google. That’s an LTE area for H3G too (the operator of note). Why is customer ambivalence surprising to these operators? Is it? They do a good impression of not caring either way.

    Thankfully the ‘dogs and chicken bits on the BBQ next to the chilly bin kept me distracted from the Internet long enough to not be bothered.

  2. The question was asked (not by the MLO’s) and Ofcom felt the national deals to MLO available on MEAD (mobile ethernet access direct) meant no new access conditions were needed on the BDUK funded infrastructure. Ofcom did announce a 30% reduction in ECCs which was very helpful and welcome.

    This might open up again, once they realise how little capital BT is investing (23%) and the little that is being invested is not open to scrutiny.

    NGA for all

    2014/05/26 at 20:30

  3. Just a technical note you have 60-90Mhz in the package above – I presume you mean GHZ there are not many services in Band II let alone high capicity data!

    Actually spetrum for microwave access isn’t that bad depending where you are – a bigger problem is often the paths you need or the cost of and finding a mid point site.


    2014/05/27 at 11:10

    • Quite correct, Q. Many thanks for proofreading. I shall correct it in a moment or two.


      2014/05/27 at 12:45

  4. It should be noted this is of no help to the UK as BT in their infinite wisdom sold their mobile company a while ago 🙂


    2014/06/01 at 19:51

Leave a Reply

Fill in your details below or click an icon to log in: Logo

You are commenting using your account. Log Out /  Change )

Google photo

You are commenting using your Google account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s

%d bloggers like this: