New spectrum auction signals rapid deployment of 5G

The Federal Government's recent announcement that it will auction 2.4 GHz of essential spectrum in the 26 GHz band signals Australia's entry into the rapid deployment of 5G networks. Communications Minister, Paul Fletcher, announced that the spectrum will be sold at a competitive auction in early 2021. Now is an opportune time for network owners to prepare to deploy 5G at scale.

"The Morrison Government is allocating this spectrum to support a number of important communications policy objectives, including the rapid deployment of 5G technologies, the promotion of competitive market outcomes, and encouraging investment in infrastructure across both metropolitan and regional Australia," Minister Fletcher said.

"Making this spectrum available means that the Australian telecommunications industry can do what it does best - provide world-class telecommunications services for consumers, small businesses and enterprises. 5G will deliver speeds significantly faster than 4G and at much lower latency."

The Radiocommunications (Spectrum Re-allocation – 26 GHz Band) Declaration 2019 allows the Australian Communications & Media Authority to re-allocate spectrum across 29 Australian cities and regional centres.

Why is spectrum important for 5G?

Unlike 4G, 5G will use spectrum across an unprecedented range of frequencies. A mix of low, mid and high band spectrum will be required to facilitate the deployment of 5G technology and allow it to deliver its full potential.

In light of the variety of spectrum that is required to support 5G, governments and regulators must explore dynamic spectrum arrangements and ensure that a wide range of spectrum bands are available to help meet the demands of rapidly advancing wireless broadband.

Ensuring the timely access to the right amount and type of spectrum is therefore a priority.

What does this mean for 5G deployment?

Use of the high 26 GHz band (referred to as a millimetre-wave band) enables:

• access to channels with larger bandwidths;
• the provision of higher data rates to end user equipment; and
• the benefits of 5G to be realised and the rapid deployment of 5G to proceed.

The rapid deployment of 5G will require network owners to adopt a step-change in the procurement and deployment of network infrastructure owing to the need for much denser cell deployment than was necessary for 4G. Rather than deploying one mobile tower to service a particular area, network owners will be required to deploy multiple small cells – up to 4 times more than current networks – across a confined geographic area. For example, in the United States, the Federal Communications Commission has estimated that it will need 800,000 small cells to make 5G a reality. The existing 2G/3G/4G network in the United States has just over 200,000 mobile towers.

5G networks in Australia are in their infancy:

• Optus and Telstra have switched on their 5G networks, which cover a relatively small number of pilot sites.
• Vodafone has rolled out a dark fibre transmission network in anticipation of supporting 5G applications.
• Large scale deployment of 5G infrastructure is yet to commence in Australian cities.
• Telco analysts predict national deployment is unlikely to be completed until mid-2020s.

In contrast to the existing 3G/4G networks while rely on mobile towers and poles, 5G will primarily be deployed using small cells, which are around the size of a backpack.  Small cells can be placed on available street infrastructure like power poles and will be much closer to homes than the current mobile towers.

What should network owners do now?

Network owners considering their readiness to rapidly deploy 5G at scale.

This includes considering not only its equipment vendors, 5G network architecture and commercial use cases, but also the contractual and commercial framework necessary to enable a successful, rapid deployment at scale.

There are various contracting models available to network owners to engage the market to deploy 5G, including, for example, traditional "hard dollar contracting" with fixed time and cost obligations, collaborative contracting based on risk-sharing and transparent cost recovery, or performance contracting which can align the network owner's desire for service delivery against key metrics with the contractor's need to maximise profits.

Next step for the telecommunications industry: review existing contracts

The 26 GHz spectrum auction in early 2021 will have far-reaching implications for the telecommunications industry, in particular network owners, and its customers. Network owners should review and stress-test their existing deployment contracts to ensure they fit for a rapid deployment of 5G at scale.