We have a competitive 4G market in the UK now as O2 and Vodafone have launched their services to rival EE. What does this mean for our mobile resellers and dealers in the Channel and are the opportunities to make margin rolling through the door like a tsunami or is it too early to tell? David Dungay stepped into the Channel to take a look at the 4G landscape.
The 4G landscape is changing in the UK and if we are to believe the roll out figures Vodafone have suggested, they will be adding a further thirty 4G sites a day, then it won’t be long before 3G is long forgotten and we will have entered a new age in mobile communications.
On the 4G landscape as it stands Jeff Bak, VP of product management for mobility services at Tata Communications commented “More than 178 million 4G subscriptions are expected globally by the end of 2013. Still, due to the fact that just one network provider – EE – is so far marketing a complete 4G offering and O2 and Vodafone’s 4G launches having only been unveiled recently, UK market penetration remains fragmented and low. While other countries, such as South Korea, are already rolling out 4G LTE Advanced, in the UK penetration of 4G is still in its infancy, despite Ofcom already planning proposals surrounding 5G, which are due in autumn. There is still some way to go before we will see real momentum. “
Peter Jennings, CTO at MLL Telecom added “While spectrum license delays resulted in the UK lagging behind the likes of the US, South Korea and Germany in terms of LTE deployment, LTE is now enjoying fast growth. EE has gained a valuable head start in the market and its experience since launch offers valuable lessons to the likes of Vodafone and O2 as they play catch-up.”
Stewart Yates, Managing Director of TFM Networks, says “It’s all about preparation at the moment. Coverage is still insufficient for most end users to get the service and is still pretty much limited to a single provider. The other providers will be aggressive in their rollouts so we will see increased competition and coverage quite quickly. We have spent the past 6 months testing the service in various locations and choosing hardware that delivers necessary capability to our customers. We have got some test units out in the field with customers now and it is working successfully so we are ready to go as and when necessary.”
Mark Curtis Wood, Head of Networks at Nimans said “One of the biggest technology developments in recent years is 4G. This is going to be a game changer because it’s going to bring mobility into areas that it never was before like video conferencing, applications and so on. The way we sell mobile data is also changing. On the back of 4G people will want to consume more data but consume it in a different way. That’s about us selling terabytes of data to resellers and enabling them to carve it up how they want to as part of their core proposition.”
Mark continued: “It’s the start of a new era but we are still only in the first phase. The landscape out there is split into two distinct camps. There are those that see 4G as being total utopia, a whole new world of connectivity, much of which we haven’t seen yet as it hasn’t been invented. Then others are still saying 3G isn’t even there yet, let alone anything else.”
Businesses are ever more upbeat, and the latest GDP figures show, for the first time since 2011, two consecutive quarters of economic growth. What’s even more encouraging is that we now have an unrivalled opportunity to drive forward sustained recovery. The mass-market arrival of 4G in the UK gives us a unique opportunity to catalyse our recovery.
Guy Laurence, CEO, Vodafone UK said, “Speed is just the start, it’s what businesses can do with it that counts. Businesses of every shape and size need to be able to get online when they want and how they want. Even the smallest business user has multiple devices that they want to use to access crucial information and with Vodafone Red Business 4G-ready they’ll be able to share their generous allowance in the way they want.”
Bak states“4G has great potential, especially since advanced enterprise communications and collaborations systems are ever increasing in importance, particularly since social media applications are now starting to infiltrate a wide range of business applications, from accounting and finance systems, to business intelligence, customer service, HR and more. 4G not only offers potential in terms of remote employee connectivity, it also has a future in the back-up arena. Resellers in the security space should also take note as enterprises start worrying about an additional potential threat route into the organisation.
He continues “The infiltration of 4G into the enterprise will have a positive knock-on effect on other IT segments with numerous areas to capitalise on. For example, the emergence of the technology opens up a new avenue for potential security attacks that need to be addressed while 4G will also be used more and more for back-up as part of a business continuity strategy. At the same time, 4G will bring the dream of seamless enterprise collaboration a step closer, by being able to integrate the technology into the overall communications strategy.”
Dave McGinn, MD of Daisy Distribution commented “Over the past six months, more and more partners have started to develop 4G opportunities. I believe that this growth can be directly attributable to the greater understanding of the value of the 4G proposition, both within the reseller community and amongst business customers.
McGinn added “Although EE has previously held a monopoly on 4G services, we have recently seen Vodafone and O2 both enter the fray with their respective launches. Subsequently, I believe that these new players will stimulate even greater business interest because of the SME pedigree of both networks. As with any market that welcomes new players, I think we will naturally begin to see growth as a result of the increased competition.”
3G Versus 4G
EE recently announced they have reached one million 4G customers but the business sector isn’t necessarily convinced yet. Jennings commented “EE often struggled to convince consumers that its expensive data-capped plans were worth the money – people simply didn’t see a strong need for mobile broadband speeds faster than 3G. But one million have now been convinced. Education is key. Operators need to ensure their customers recognise the advantages in overall quality of experience and a compelling user experience that is better than 3G. It also boils down to network congestion – adding a new technology, often using new spectrum, will make for a much improved user experience.
He continued “So far, EE’s 4G networks have been set up as isolated pockets of mobile broadband that act as Internet hotspots in urban areas to make the most out of limited radio spectrum. However, UK operators could also look to use them as a substitute for fixed broadband services in under-served rural areas, as they are doing in Germany to improve rural broadband coverage and offer 4G service beyond towns and cities. The rural broadband problem can be solved with Wireless solutions much more easily than continually, doggedly, digging more fibre. With a carefully constructed backhaul network design and the use of Microwave Radio, this can easily be achieved.”
Matt Brooker, Maintel’s Sales Enterprise Director, said: “With less time spent waiting for file transfers to be completed, 4G represents a huge opportunity for remote workers as better connectivity can only increase productivity. 4G also provides remote workers with a more reliable connection in comparison to 3G, making remote working in places without wifi hotspots an easier process.”
In comparison to both 3G and wifi hotspots, 4G provides greater levels of security for business users, to help enhance the security and privacy of data by removing the need to authenticate onto another, possibly public network whilst travelling. Another benefit to workers who frequently travel is that international roaming is easier on the 4G network because most of the 4G technology is uniform and utilises 4G-LTE technology. This will reduce the number of compatibility issues between networks that often plague travellers.
On the go video conferencing and rich media collaborations will also see an improvement on the 4G network, with a more stable connection and near-immediate delivery then previously seen when using a 3G connection.
Initially, all calls will still be made over 3G until carriers upgrade their networks to support voice-over LTE. The main benefits of 4G will be seen when using internet and data services as the network is less congested and able to handle larger data applications,” said Brooker.
What about wireless networks? Bak says “Both wireless and 4G technologies have their place in the ecosystem as they are complementary. They both have their positive and negative aspects which the other is able to cover. For example, while 4G’s big advantage is that it is available everywhere, wifi networks are location dependent. At the same time, wifi networks will offer superior speed when deployed indoors, while 4G offers a better solution for outdoor and mobile environments.”
Andrew Ferguson, site editor at thinkbroadbank.com, doesn’t agree “An aspect of 3G commonly ignored is that there are variants in the UK that run up to 21 Mbps and 42 Mbps – enough to give the newer 4G services a run for their money. At thinkbroadband.com we have found a common complaint from early adopters is that data usage allowances on 4G services have been too small, leading to them staying with their unlimited 3G plans. In addition, it’s becoming easier to find free Wi-Fi when out and about on the high street. Unlike the adverts, people generally don’t watch movies while walking down the street, so the extra capabilities of 4G are not needed.”
McGinn told Comms Business where he sees the opportunities for the Channel. “Offering lower cost smartphones and tablets which can power typical 4G native applications, such as file sharing, video messaging, document collaboration and even screen sharing, will play a big part in the success of the 4G networks.
“In all areas of traditional communications, revenues are falling as the services become increasingly commoditised and competition continues to drive down costs. Mobile technologies and data are simply the conduit that offer some respite to these decreasing margins by allowing partners to develop new revenue lines through the implementation of unified solutions and mobilising business applications.
“Within Daisy Distribution the 4G story is still very much in its infancy; however, our partners are ready and equipped to embrace it.
McGinn continued “Across the partner channel, the approach differs dependent upon which side of the fence the partner originates from, whether it is traditional mobile or fixed communications. The fixed communications resellers almost hold the advantage due to their greater understanding of mobilisation and unified communications, if not the mobile tariffs.”
Bak added his thoughts on resellers taking up the 4G opportunity “To date, only a small pool of resellers have been able to integrate 4G into their portfolios, but this is growing. Once 4G really takes hold, connectivity, managed services and operational support will become the key differentiators for channel organisations to remain competitive. This trend is likely to continue as more and more resellers are turning their expertise to services.
The entry of EE competitors including Vodafone, O2 and BT to the 4G market will level the playing field and help 4G gain ground in the marketplace. It appears that so far, interest in 4G among businesses has been restrained and hesitant; however, this is likely due to the fact that the benefits of the technology are not immediately seen. Because to date 4G technology has only been available via a select numbers of resellers through EE it has hindered a broader business education programme taking place. This is due to change once other operators are launching their offerings and 4G momentum will grow, thus offering new opportunities for resellers.
Bak continued “4G has great potential, especially since advanced enterprise communications and collaborations systems are ever increasing in importance, particularly since social media applications are now starting to infiltrate a wide range of business applications, from accounting and finance systems, to business intelligence, customer service, HR and more. 4G not only offers potential in terms of remote employee connectivity, it also has a future in the back-up arena. Resellers in the security space should also take note as enterprises start worrying about an additional potential threat route into the organisation.”
Yates told Comms Business his views, “Our reseller base is aware of it especially those that use our 3G services today. We will start upping our marketing activity in October as we believe this is when it becomes a realistic opportunity for end users to have a good chance of coverage. Resellers are eager for the capability that 4G delivers but as ever don’t want to run the risk of disappointing customers with lack of decent bandwidth or availability.”
Paul Mace, UK Infrastructure Director at ZTE, commented “With business applications on the up and BYOD proving to be the kind of trend that outgrows its billing as a ‘trend’ through general adoption, the channel may now be feeling very thankful for the speed and efficiency of 4G, which should further inspire the adoption of BYOD and the accommodation of the mobile workforce. The knock-on effect could positively impact the sales of such resellers.”
He continued “As with any new technology, certain challenges – such as a faster draining of device power due to increased speed and inter-cell interference –can be expected. For operators, 4G is not the sole occupier of the network space – Wi-Fi, 2G and 3G all still stand shoulder-to-shoulder, with the price of maintaining multiple networks as well as the effect it could have on user speed also proving worrisome. However, every innovation must crawl before it walks, and walk before it runs. 4G is bridging the gaps between these steps quickly, and will be off and sprinting before we know it.”
A lot of the 4G hullabaloo has been labelled as ‘hype’ but what do the numbers say? Stewart Yates said “From our testing we can say it is very good. We have extensively tested and are seeing throughputs of 20Mb. We have tested 4G routers with both in unit aerials and externally fitted. If you fit external aerials we have managed 18Mb even up to 5 miles away from mast. In unit aerial performance can be significantly lower but we see a good 8Mb as long as you are considerate with fitting. If using in unit aerials try and work out what direction your local mast is and sit on a window in that direction! Do try the aerials in different configurations too as small movements can up throughput.”
A lot of the industry seems to think it is too early to realise the 4G potential! The problem with this mentality is the speed at which these services will be rolled out to the rest of the country will be extreme. It will be very easy to put all of the 4G opportunity to one side while you wait for coverage only to find your nearest competitor has been ready from day one and is now taking your customers! Prepare now and reap the reward tomorrow.