New 5G & Wholesale Models
Both roads and vehicles are becoming more connected. Cars’ and trucks’ systems need ever-greater capacity, delivered via 4G and soon 5G mobile networks. Drivers, passengers and roadside pedestrians consume mobile broadband on their smartphones and other devices.
And the road infrastructure itself – intersection signals, display boards, traffic-monitoring, toll-booths, lighting, parking and so on – requires secure and reliable networks, delivered either via fixed or wireless connections. In addition, the highways’ maintenance department, construction teams, public safety agencies, and fuel/electricity stations all also need increasingly-capable connectivity. There is considerable innovation happening in all these areas of Intelligent Transport Systems (ITS), often outside of the normal telecoms industry.
Today, road networks often have commercial telcos’ fibre networks built alongside (or underneath) them, with rights-of-way granted by the relevant authorities. This can be both for metropolitan streets, and long-distance highways. These networks serve the usual carrier retail and wholesale markets, including mobile operators’ (MNOs’) backhaul and transport needs.
Some road authorities also have their own separate fibre and IP networks for “intelligent transport systems”, either operated by themselves, or contracted to external providers under a variety of financial mechanisms. While they sometimes include wireless connections to sensors, display boards or other systems, they are rarely connected with cellular technology.
The 5G era brings some important changes, which may shift or extend this model – and in particular, drive new and innovative wholesale models for mobile backhaul. Three shifts are especially relevant:
- There are growing numbers of road-based mobile use-cases, as well as new stakeholders such as car manufacturers – and existing players such as the MNOs wanting to sell deeper and more integrated solutions to the automotive market.
- 5G deployment along roads will need more antennas – and hence more backhaul.
- Various regulators are enabling new private or neutral-host mobile networks, by providing shared or localised spectrum. They too will need backhaul.
These various use-cases are delivered by a range of different network owners and service providers:
- Drivers and passengers need access to mainstream national MNO and MVNO networks – and indeed, there may be coverage obligations in those operators’ licenses.
- Vehicle manufacturers may have contracts with major MNOs, or perhaps use specialist IoT-oriented MVNOs or aggregators.
- Emergency services need full coverage of their private radio or cellular systems, including in remote locations.
- Some wireless parts of ITS may shift to a commercial MNO network or run over a dedicated government / private system.
- Some countries’ roads are managed as private businesses, especially where tolling applies. Those organisations may choose to operate their own networks or contract them out.
- In future, all roads (urban and highways) may have to support autonomous vehicles and other demanding applications. These may use the MNOs’ national networks, or dedicated systems.
Today, 4G coverage along the roadway is delivered from normal cellular base stations and antennas, either standalone towers by the roadside, or on roofs of buildings nearby. These are connected with fibre or sometimes microwave backhaul, generally owned and operated by major national telecom-infrastructure providers. For secondary and urban roads, network coverage is generally delivered from broader, wide-scale antennas.
With 5G, the new ultra-high capacity mid-band and mmWave spectrum presents new challenges. While this supports massive amounts of bandwidth – and enough headroom to support managed-QoS, low-latency services – the radios have very short range. It is implausible that all of a given market’s MNOs will be able to install new antennas every 300-500m along the entire road network.
At the same time, many national regulators are enabling new localised or private cellular networks to be built, based on shared spectrum and different classes of licences. This could mean that a variety of new 5G operators could emerge – with their own need for backhaul.
Disruptive Analysis believes that road operators and agencies could potentially add a wholesale strategy onto their own internal ITS-focused networks, if regulators (for both telecoms and national infrastructure) permit.
That wholesale strategy could have multiple tiers:
- Long-haul transport
- Backhaul / fronthaul for MNOs’ towers or antennas along the roadside
- Mobile capacity, if they can obtain spectrum
We are likely to see various different value chains emerge, depending on the local market’s conditions and mobile market structure. In some locations, various regulatory and policy trends in the past have led to open-access ducts being available for telecoms, or specific rules about rights-of-way and resource-sharing. Potentially, the road operator itself could deploy and own this infrastructure, becoming a wholesaler of either fibre transport and backhaul, or even its own 5G capacity.
One scenario is for “neutral host” wholesale-focused mobile networks, that provide shared infrastructure for the national networks (and public safety agencies) in places where the economics make more sense. The other MNOs would either roam onto these wholesalers’ infrastructure or agree some sort of “reverse MVNO” arrangement. The most likely locations for such a business model to work are in-building, in rural area – and along road and rail routes.
Taken together, Disruptive Analysis sees the growing need for 4G / 5G coverage and capacity along roads – for vehicles, passengers and ITS / IoT systems – meaning that mobile infrastructure and backhaul along highways will need to expand rapidly. The high QoS and safety implications will require strong and secure network control planes. Traditional telcos, new entrants and potentially the road authorities themselves have significant opportunities.