The AFR reported on 9 January that Vodafone Australia is looking to use the spectrum acquired at last month’s auction to provide fixed wireless broadband services that, enhanced by beamforming, would compete with the National Broadband Network. That’s not quite correct.
The AFR said: “Fixed wireless differs from mobile hotspots in that it can use so-called “beamforming” to send a signal from a tower directly to a dish on the roof of a house, which is then carried by a wire to a modem in the house.”
Beamforming won’t confer any advantage on fixed wireless over cellular. Beamforming is a key component of 5G technology and indeed one of the most important features to enable 5G to achieve its promised performance improvements over 4G. More on that later.
Beamforming will become particularly important at the higher frequencies to he used for 5G – 26GHz and beyond. Antenna size reduces as frequency increases and at these frequencies the small size of individual antennas will enable the use of very many antennas and very targeted beamforming: massive MIMO, meaning multiple input, multiple output.
Conflicting views on mobile v fixed
The AFR story went on the quote Vodafone CEO Iñaki Berroeta playing down the extent to which any wireless technology — fixed or mobile — could substitute for a wired network whether that be FTTN, FTTB, FTTH or HFC.
“The average usage of a mobile customer in Australia would be less than 10GB per month. The average usage of a broadband customer in Australia over the NBN is over 100GB,” he told the AFR.
“So that is one order of magnitude bigger in terms of usage. What that means is that it’s very difficult to provide the same level of capacity using spectrum as it is using a fixed network.”
That’s a rather different message from the one Vodafone was giving out last April when, at the CommsDay Summit, it released a study of Australian consumers commissioned from the Centre for International Economics, saying it showed up to 39 percent of Australian homes could abandon fixed broadband services in favour of mobile networks.
39 percent of Australians tipped to go mobile only
Vodafone’s chief strategy office, Dan Lloyd, in his CommsDay Summit presentation, said CIE had run “a significant household survey to estimate what customers are using on fixed and mobile and to look at the very complicated trade-offs that customers are making across a number of factors.”
Significantly he also said: “There is a cohort of 39 percent of fixed line users that are still using only up to 50 gigabytes per month. That is the cohort which can already be served by 4G mobile networks at a very similar price point to fixed networks.
“So in terms of potential for fixed to mobile substitution that cohort is most likely to be drawn into that temptation, even on the current performance of fixed and mobile networks.”
He went on to say that false perceptions about the performance of mobile networks were likely to be holding back consumers from abandoning fixed broadband services.
“CIE found a significant difference between the perception that fixed broadband is generally faster than mobile and the actual data. As consumers become more and more aware of the faster performance of mobile, even on 4G, that is likely to be a significant factor driving fixed to mobile substitution.”
5G is expected to deliver performance vastly superior to 4G: download speeds 1000 times greater, 10Gbps and beyond, and the ability to support many more devices, one million per square kilometre compared to 10,000 in 4G.
The importance of beamforming
Beamforming will be a key component of its ability to achieve those targets. However as Berroeta told the AFR, at the end of the day, consumers’ choices will be based on balancing functionality (ie speed and download quotas) against cost.
“The [NBN’s target] wholesale revenue per line per month is over $50. So if someone will find an alternative way to offer a similar service for less than $50, there is a business case,” he said.
Back in April 2018 Lloyd identified spectrum and the cost of spectrum as key determinants of 5G pricing.
“CIE estimates that delays to 5G rollout through, for example, lack of spectrum, could cost the Australian economy nearly $10b each and very year over the next few years.”
The spectrum auctions are now done and dusted and it is some of the spectrum, according to the AFR, that Vodafone is contemplating using for fixed broadband services.
The AFR quotes Mark Gregory, associate professor of network engineering at RMIT, speculating that Telstra and Optus will do the same, because they all want to take as much market share as they can from NBN by providing cheaper services.
On the one hand this is clearly good news for Australian, but it’s bad news for NBN and the Australian taxpayers who funded it: with a multibillion dollar upfront investment and a very high percentage of fixed operating costs every Australian that opts for mobile or non-NBN fixed wireless undermines the viability of the NBN.