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The race is on to build a 5G business case, says BT CEO

Speaking at a Huawei mobile broadband event, BT CEO Gavin Patterson said telcos and mobile operators must overcome the challenge of building viable business cases for investment in 5G mobile networks – and quickly

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Mobile networking

BT CEO Gavin Patterson expects to see telcos and mobile operators start to put more meat on the bones of the business case for building 5G mobile networks very soon, possibly within the next quarter, with the internet of things (IoT), smart cities and autonomous vehicles set to be some of the key drivers that push businesses such as BT to invest.

At Huawei’s Mobile Broadband Forum in London – at which BT-owned mobile network operator (MNO) EE showed off the UK’s first test of an end-to-end 5G mobile network architecture – Patterson discussed the progress being made towards 5G, and said the business case for investment needed to be made within the next few months if early commercial roll-outs were to take place in 2019 and 2020.

“We need to finish the job on 4G – we need to make sure we get return on investment, we need to make sure we truly get the use of mobile networks up. Then we need to build the use case for 5G – clearly the innovation is there – but ultimately, as carriers, we have to make a significant investment and put capex down, and the business case for that still needs to be built in many ways,” he said.

“At its heart it will be about mobile broadband, ensuring we’re able to build capacity and monetise that as carriers. That’ll be key on the revenue side. On the cost side, a massive upgrade to the network is required, there’ll be many more points of presence [PoPs], and all of that needs to be funded. It’s important that carriers and chip manufacturers work together to get the most efficient delivery at the lowest cost.”

Patterson called for the industry to focus its 5G R&D efforts, firstly around ensuring a seamless and ubiquitous customer experience on 5G alongside 4G and Wi-Fi – it is likely that 4G and 5G will coexist for some time – and secondly on bringing down the cost of the equipment, which he said would help operators a great deal.

“We’ve all been struggling to make the business case work because the transition from 3G to 4G was underpinned by going from a pretty poor internet experience to one that really opened up the potential of internet for mobile – we haven’t found that yet for 5G,” said Patterson.

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“It will be a better experience, there is no question of that, but it is opening up the verticals, particularly around the IoT, that will open up new revenue streams. Finding use cases is the biggest challenge we have at the moment.”

Patterson’s thoughts echoed, to some extent, those of Innovate UK, which in October called for operators to do a better job of finding business cases that did not merely focus on improved network speed.

Spectrum auction delay not BT’s fault, says BT

In terms of timescales for the UK’s 5G roll-out, Patterson acknowledged that the ongoing legal challenges around Ofcom’s planned auction of radio spectrum for 5G – which centre on Three owner Hutchison’s demand for the amount of spectrum BT and EE can own to be capped – was holding things up, but reiterated the company line that BT was not at fault for this.

“We’ve hit a bump in the road because of our legal challenge. We want to reduce the cap that’s being forced on BT’s spectrum capacity,” said Patterson. “We’ll get a court hearing in the next couple of months, but ultimately I think it’ll be resolved early next year. All we have done is defend our position, we haven’t added any extra time to the process.”

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