Ontix CEO Antony Tomlinson shares his analysis of the WIP-run concession model, examines BT’s campaign for open access to street furniture, and explores what really holds the key to accelerating the roll-out of next-generation networks.
Local authorities who want to make council-owned street furniture available to host telecoms equipment have largely opted for concession contracts with wholesale infrastructure providers (or “WIPs”) – for very practical reasons. The WIP takes on the responsibility of the work and shoulders the business risk, paying an agreed license fee to the council and charging a wholesale fee to operators, who are able to access equipment and services on a fair and non-discriminatory basis.
BT has, historically, been a key player in several such concessions. However, in March of this year, it began calling for what it termed “open access” to street furniture. In a press release, BT outlined its belief that concessions are a barrier to future investment, plus its proposal of an alternate “free-for-all” model in which each operator engages separately and directly with the council.
The discussion that BT has sparked is an interesting and important one, now we’re finally starting to see small cells being deployed in volume. However, if we truly want more small cells deployment – plus Wi-Fi and associated technologies – it is simply not realistic to expect the operators to build all of it. The answer lies in greater collaboration, with WIPs providing neutral host infrastructure that can be shared. Unfortunately, BT’s proposed solution would just perpetuate the inefficiencies that we see today as operators deploy largely duplicate infrastructure in separate programmes, digging up the same roads several times as they go. The Concession Model can and is driving shared infrastructure, so we should be thinking about how to use it to best effect – not discarding it.
What’s the story?
BT’s press release focused squarely on the concession model as the primary barrier to small cell adoption, as if there couldn’t really be any other reasons why more small cells have not been deployed to date. It cleverly chose targets that would resonate – councils, red tape, middlemen – claiming it was now clear that concessions were a barrier. As luck would have it, BT had the solution: “open access”. There wasn’t much detail on how this would work in practice, but the key message was that it would somehow “take back control” (from whom and for what purpose was for another day).
The reaction from those actually involved in the industry was interesting. Some found it somewhat ironic, since BT hadn’t shown much enthusiasm for “open access” when other providers wanted to access BT’s ducts and poles. And was BT really negotiating here with one eye on engaging – and perhaps displacing – incumbent WIPs?
What is not in any doubt is that we need small cells on street furniture. Street-level densification is widely acknowledged as the key to rolling out ubiquitous 5G wireless capabilities. It is also true that deployment hasn’t yet happened at the rate we would want – although we are now seeing some landmark deployments – so we should absolutely debate what needs to change and improve. But we must frame the debate correctly and, regrettably, BT’s narrative falls down in its most basic assumptions, including:
- There is no evidence to suggest that concessions have been a barrier to small cell deployment. On the contrary, most – if not all – of the small cells that have been successful deployed to date have been deployed under the concession model, including significant roll-outs in the City of London, Hammersmith and Fulham, and Aberdeen.
- Concessions are “open”: a WIP is both incentivised and contractually obliged to provide access and services to all operators on a fair and non-discriminatory basis. It is simply false to imply that concessions grant a single player “exclusive access to council-owned street furniture”.
As many industry players will realise, it simply isn’t accurate or credible to suggest – as BT does – that the reason there are no small cells in Carlisle and Plymouth, for example, is because of concessions. We need to reframe the discussion more realistically, or we will direct friendly fire at the wrong targets.
Small cells in the real world
Firstly, let’s take a reality check. There are some very basic reasons why more small cells haven’t been deployed to date. Chiefly, the operators have been focused on macros, and upgrading them for 5G. Some operators are only just piloting small cells now and, in tandem with this, the vendors are only just starting to produce versions of their small cells that are optimally small. Previous generations of units were often too big and heavy for effective deployment on street furniture, especially if they also needed separate housings and external antennas. It’s important that we are realistic – and honest – about why we are where we are.
Nevertheless, there is a core challenge that still needs to be addressed. Small cells provide less coverage and less capacity than macros, so the TCO and the lead time must be reduced proportionately if they are ever going to be considered a default solution. Unfortunately, the cost and complexity of small cell deployment doesn’t scale down easily due to several factors:
- Deployment remains complex and costly if an operator has to do it all by itself, ie. building relationships with lots of councils, and resourcing and managing large numbers of small deployments, each with different people / processes / supply chains – especially if councils have limited resources to streamline and support the process.
- Connectivity is a major blocker if an operator needs its own fibre connection to every post.
Driving the change we need
Fundamentally, operators need someone independent to deploy, manage and bring discipline to shared infrastructure that they can then license without having to build their own, which is impractical for all the logical reasons outlined.
BT’s proposal cannot help here: it leaves operators doing it all DIY. But the concession model can help – and it is proving this right now. In Westminster, where Ontix has a concession contract with the council, we are building a hybrid fibre/microwave network (“Metrohaul”) to provide high capacity / low latency / low cost connectivity to connect street furniture across the borough for different operators and different technologies – and on lead times that would otherwise be unthinkable. We are also planning a new shared antenna solution in Oxford Street, so that different operators can use the same new street furniture when the area is redeveloped. These are things that just wouldn’t happen in a model that left operators to deploy on a DIY basis.
Of course, the concession needs to be set up properly from the outset. The council’s priority should be the public benefit, and the WIP should most certainly be neutral (and not an Operator). But if it’s done well, a concession can unlock potential that would be lost in a DIY model, with operators ineffectually spending their time and money trying to landgrab assets and then build duplicate infrastructure because there was no larger strategy.
Indeed, the mooted council-licenced model would seem to offer precisely the wrong approach for dense urban areas by creating the wrong incentives:
- Operators would simply landgrab the assets that they can most easily use (and get fibre to).
- A significant proportion of assets would be passed over because the business case for single operator deployment wasn’t strong enough.
- Operators wouldn’t be incentivised to make their assets shareable (in fact, quite the reverse).
And that’s before we get to the sheer chaos of digging up the same roads again and again as operators build separate programmes in the same locations.
By contrast, concessions deliver a compelling model for dense urban areas, by incentivising the WIP to invest in connectivity (to maximise the number of usable assets) and to invest in infrastructure (in order to maximise the number of sharers per asset) – exactly as we are doing in Westminster. It is also good for councils with a vision: they can then partner with a WIP who will build shareable infrastructure that can support multiple use cases, spanning Wi-Fi, Fixed Wireless Access, CCTV, pollution monitoring and Smart City or IoT applications.
We aren’t suggesting that concessions are the only answer, or that every council should do exactly the same thing. It takes time to run a tender for a concession like Westminster. A “concession lite” might be more appropriate for a town where there’s less demand but the council wants to contract resource instead of building up its own team. Maybe some councils don’t need a concession at all. The council-licensed model might even offer the best solution for rural and semi-rural areas to get up and running, however, the challenge would then become the availability of high capacity and low cost transmission.
Ultimately, the councils themselves are really best placed to determine their own approach, and we should be providing optimal solutions to help them harness their assets and enable next-generation services for customers – not dictating a one-size-fits-all approach to suit individual vendors. The concession model offers a proven, streamlined framework for driving the collaborative innovation and neutral host capabilities that are fundamental to the delivery of next generation wireless services. As such, the well-run concession is very much here to stay, and will continue to provide a solid foundation for our 5G future.
The Ontix Model: infrastructure as a service
Ontix is pioneering a transformative model for deploying next-generation wireless infrastructure – streamlining small cell densification projects and significantly reducing cost and time-to-market.
Our Infrastructure-as-a-Service approach means that Ontix takes complete ownership of acquiring and building shareable next-generation infrastructure, including connectivity. We then make our 5G-ready infrastructure available to MNOs as part of a comprehensive, end-to-end managed service.
Full confidence, total service
Next-generation networks require dense networks of small cells. Our fully managed service simplifies and speeds the process of small cell deployment for mobile network operators and local councils. Ontix’s Metrohaul solution completely removes the need for operators to deploy infrastructure themselves – eliminating the difficulty, time and expense that has been a barrier to small cell adoption.
Metrohaul is a 5G-ready hybrid fibre/wireless architecture that delivers a shared, multi-operator system by harnessing:
Metro fibre connects fibre nodes in rings.
Metro optical provides high capacity (10 Gbps) to each fibre node.
Metro wireless provides fibre-like connectivity between fibre nodes and wireless nodes.
What we do
We buy the rights to use existing street level infrastructure, and we adapt it.
We design, plan and build the network that will connect our footprint.
We market our infrastructure through our portal. The operators can then choose what they want us to install, and where.
We plan, execute and document the workflow required to install the small cells. We deploy demand for all operators, and we invest in process improvement, to make this efficient.
We provide the help desk and field force to manage and fix faults.
The Ontix team has worked closely with key partners – including the City of London Corporation, Westminster City Council, mobile network operators and equipment vendors – to develop a proven architecture that is today enabling live, successful multi-operator small cell solutions for street furniture assets.