BIG DATA SERVICE PROVIDERS Fig. 7 | Telecoms are under pressure as adjacent industries are not enough competitive TELECOM CONSUMER SERVICES SPECTRUM RADIO ACCESS NETWORK Source: Digiteccs Associates LIMITED COMPETITION RADIO EQUIPMENT VENDORS TELECOMS ARE UNDER PRESSURE LIMITED COMPETITION In the light of the discussed challenges, the telecom industry may ultimately find its current business model of operating parallel competing nationwide networks as not entirely suitable for 5G. Deeper sharing of some infrastructures may become a must, not just an opportunity. The question therefore arises whether 5G may in fact invoke ideas of a re-birth of telecom monopoly, also due to the following reasons: 5G will largely rely on underlying fibre infrastructures, which would be very costly, if not impossible, to replicate. Scale economies and initial capacity abundance in some of the newly built 5G networks may be such that it would be practically difficult for smaller competitors to succeed. 5G network services may become strategic for national interests, for example due to their role in operating of emergency services, utility and transportation networks, and other key functions of the state. Some states may want to build 5G networks, and deep 5G coverage, as their long-term infrastructure investments without waiting until such projects become commercially viable. Health concerns around mobile radiation may lead to pressures to minimize the number of 5G antennas. Given the unclear business objectives (purpose) of the telecom operators, the telecom industry has been struggling lately to make bold strategic moves. However, 5G and the covid19 situation are now increasing pressure on telecoms to think more strategically. Some of the trends that we have already seen, or are beginning to see in telecoms, include the following: Passive network sharing. This phenomenon has been in place for many years. It is not productive to duplicate expensive network resources, especially the passive ones, such as tower and fibre access networks. Sharing and separating towers has already become a world-wide phenomenon, while sharing of fibre networks is likely to rise further with further expansion of residential fibre and densification of the mobile networks. Active wireless network sharing. We have also seen some instances when the industry has moved towards active Radio Access Network (RAN) sharing, i.e. sharing of radio equipment and potentially also spectrum. Regulators have had mixed views about this so far. In some cases, they raised anti-monopoly concerns about it (e.g. in Europe), in other cases they encouraged it (e.g. the UK rural sharing). Open RAN. This is an example of the so-called network virtualization, i.e. separation between network hardware and software. Such a move makes the network more flexible to offer different applications and services, similarly to a smartphone that acts as a camera, personal assistant, TV, phone and various other things. In open RAN networks the operators would use vendor-neutral generic hardware, but they can also open their networks to a higher number of possibly smaller innovators. Similar to a smartphone, this could make the networks more versatile and hence valuable in the 5G environment. The open RAN concept is particularly appealing given the fading competition in the proprietary network equipment market, especially in countries, which are choosing to exclude vendors such as Huawei. The open RAN concept is supported by the US and some other governments. The first open RAN network was recently launched in Japan by Rakuten. A number of wireless operators including Vodafone are supporting the concept. That said open RAN technologies cannot yet provide network performance, which is comparable to the leading proprietary technologies. So far open RAN solutions lack scale, and the technology is yet to be standardized. Hence deployments initially focus on less competitive and less densely populated areas. Although buying non-proprietary wireless technology is obviously materially cheaper for the operators, unless we talk about newcomers such as Rakuten, the operators will also have to deal with their existing networks and equipment vendors, who may be reluctant to support the open RAN concept and transition to it. “ It is hard not to see a tendency towards the re-birth of telecom infrastructure monopoly in some areas. After all, what’s the logic of duplicating all towers, fibre networks, radio antennas and high capacity networks in factories and airports? ” 24