This article, in five parts, is continued from Step 2, about spectrum and regulation; Step 2 can be found here.
“Once frequency usage fees have been clarified – a significant detail required for investments in industrial 5G – nothing will stand in the way of initial proof-of-concept demos.” This is another line from Siemens, from Sander Rotmensen, the company’s head of product management for industrial wireless. The blog post, quoted before, can be found here.
These last items in this extended five-part series – these steps on the road – can be dealt with more quickly, as they represent staging grounds ahead. Let us deal with pricing of newly licensed industrial spectrum, first, as the volume and pace of private networking deployments will depend very much on how it is set. And let us start with Germany, where government policy has been clearest and, arguably, most decisive.
Germany telecoms regulator BNeztA has set a nominal fee of just €120 per year for 60MHz of 3.7-3.8 GHz bandwidth, for so-called local ‘campus’ coverage of up to 10,000 square metres. The excitement around industrial 5G spectrum from the likes of Siemens, Bosch and Volkswagen – stars in the country’s industrial hard-hat – is down also to this ‘gimme’ from government, as part of the terms of its availability.
Klaus Helmrich, chief executive of digital industries at Siemens, has stated: “The pricing makes 5G highly attractive.”
At the same time, ownership and management of the 3.7-3.8 GHz spectrum, as stipulated by BNetzA, is flexible and may be managed by specialist network operators, including the enterprise departments of public network operators. In these circumstances, pricing for spectrum access will be familiar, wrapped into enterprise subscriptions for mobile services, with management fees levied on top. But it has not been set, as yet.
Germany’s model is the first; how the likes of the UK and Japan, and other nations with similar setups, set pricing around spectrum licences for enterprises will be intriguing.
What is clear is the operator-owned subscription model – for access and management – will remain in play, whether for newly licensed spectrum or for regional holdings and technical slices of existing LTE-geared spectrum.
This will be the case with private access (PAL) licences in the CBRS band in the US. Of the 150 MHz of CBRS spectrum allocated by the FCC, just less than half – 70 MHz – will be available to entities holding PAL licences, while the rest – 80 MHz – will be available to GAA users operating without a license in the band.
In total, 22,000 PAL licences will be auctioned in the summer (late June), to the highest bidders. Guidance on auction fees is unclear, except they will not replicate telecoms auctions of the past – and will not go for the dollar-equivalent of €120 per year. But certain terms about application and usage have been defined.
Ten-year PAL licences will be auctioned in each ‘county’ region as seven 10 MHz channel blocks. The FCC has sought to balance the auction by issuing the same bidding ‘credits’ to smaller-sized network providers it used in its recent 600 MHz and millimeter auctions (15 and 25 per cent for small, very small, and rural carriers).
The aggregate amount of local spectrum licensees can hold has been capped at 40 MHz, or four 10 MHz PAL licenses per county. This leaves room for multiple operators (a couple, anyway) in each locale. Access will be mediated by new SAS providers, as well, and tiered priority will be granted – to incumbent government users in the first instance, followed by paid-up PAL holders, with GAA usage available where these others permit.
The same kind of arrangement is pencilled in for the UK, where local regulator Ofcom has moved to grant local access to spectrum that is already licensed to mobile operators, but is not used or scheduled for use in the particular area. This covers vacant local spectrum holdings between 800 MHz and 3.4 GHz, variously.
New sub-licenses for already-licensed spectrum will rely on approval from incumbent holders; new users will be required to show their local networks do not interfere with national networks, or the future plans of national network operators.
As well, Ofcom is making available the 3.8-4.2 GHz band exclusively for local private and shared networks. The lower 26 GHz band, harmonised across Europe as the pioneer millimetre band for public 5G, has also been opened up for shared access.
But, again, the fees have not been set. And in the case of private licences for CBRS spectrum, fees will invariably spiral upwards at auction, according to the level of interest. At the same time, general-access GAA licences in CBRS spectrum will be available to everyone, now, and increasingly, as soon initial commercial deployments (IDCs) are completed.
For these, but for some SAS admin fees, and the cost of the radio equipment and devices, the price of a private network is free, because the spectrum is effectively unlicensed.
To be continued…
Five steps on the road to industrial 5G – technology / standards (step #1)
Five steps on the road to industrial 5G – spectrum / regulation (step #2)
Five steps on the road to industrial 5G – licences / fees (step #3)
Five steps on the road to industrial 5G – (step #4)
Five steps on the road to industrial 5G – (step #5)
