In this episode of The 5G Factor, my co-host and fellow analyst Ron Westfall and I took a look at the recent developments in the 5G ecosystem that we think you might want to know about.
Our conversation today covered:
- News that Dish plans on slowing its spending on 5G, at least for a bit. What’s the rationale here?
- Speaking of Dish, the company has filed a petition with the FCC hoping to block T-Mobile’s purchase of 600MHz spectrum – what’s that all about?
- And speaking of spectrum, are politics getting in the way of unleashing 5G innovation, especially in rural and other underserved areas? Maybe.
- And we closed the show talking about Qvantel Flexx BSS, a cloud-native SaaS based BSS, which comes with pre-built out of the box use cases designed for quick deployments that will allow telcos to develop, manage, and monetize new services now available on AWS. CSPs should like this.
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Transcript:
Shelly Kramer: Hello and welcome to this episode of the 5G Factor. I’m Shelly Kramer, host of this show, and I’m joined by my co-host and fellow analyst here at the Futurum Group, Ron Westfall. And this series, 5G Factor is all about taking a look at the 5G ecosystem, the IOT and everything that’s happening that kind of caught our eye in the last week. So with that, we’re going to dive into our show. Hi, Ron. It’s good to see you.
Ron Westfall: Oh, you bet. In fact, it’s just amazing all the great news that’s coming out across the 5G ecosystem. It’s just great to be here to take a snapshot.
Shelly Kramer: Absolutely. Well, what we’re going to dish about today is Dish’s slowing of spending on 5G. And this is actually kind of important. I’ll set the stage here for you, Ron.
Pursuant to a 2019 agreement with T-Mobile and the US Department of Justice, Dish is actually required to cover 70% of the US population by June of this year. And that means that a lot of cell towers are needed to meet that obligation, that Dish also has some obligations that roll into 2025. But the news of the day, and Ron, you’re going to take us a little bit on a dive here, is that Dish is going to slow things down a little bit.
Ron Westfall: Yeah, this is I think a strategic pause. I think you hit the nail right on the head, Shelly. A lot of Dish’s spending has been allocated toward meeting that goal, covering 70% of the US population by June of this year. And what’s interesting is there are sequels, not just one, but a few that are already programmed to follow. One is in addition to that, Dish needs to cover 75% of each of its spectrum license areas with 5G by 2025 again in the month of June. And so we’re looking at a build out of about 35,000 towers.
Shelly Kramer: That’s a lot.
Ron Westfall: Yes. Yeah, I mean that’s more than doubling what they’ve invested already. So it’s kind of curious, at least in this context, oh, 5G is losing momentum. Well, no, it’s not. This is why we picked this particular topic because it sounds like, oh, 5G slowing down, Dish is dialing back it’s spending and here’s an example. But it’s definitely going to be taking off shortly afterwards in Dish’s case.
And I think the reasons are pretty well understood. It’s not just about fulfilling legal mandates, but also it’s about capitalizing on the 5G standalone capabilities that are becoming more mainstream. And I think this is important to understand because a lot of the investment has really been focused on the 5G RAN side of things. And that’s logical. You have to have the radios out there to be able to talk to phones that have 5G capabilities. And that also allowed the operators to protect their non-standalone legacy core that is a 4G LTE core or EPC.
And Dish’s case, that didn’t matter. What it does matter is that it’s showing that the 5G core capabilities are now becoming more capable to support these new 5G SA type services that are going to make a difference in terms of 5G monetization, 5G becoming a needle mover in terms of meeting societal needs.
And I think we’re seeing some of that already. For example, 5G fixed wireless access deployments are proven, they’re solid. T-mobile and Verizon, for example, are in an arms race in the US at least in terms of those deployments. And what’s important about that, it’s meeting a big societal need and that is closing the digital divide. 5G FWA is simply reaching customers with broadband that no other technology has been able to do so far. And so this I think is indicative of that. Stay tuned. Wait for more. Because indigenous case in particular, they’re targeting a lot of their 5G build toward enterprise and business applications.
Shelly Kramer: Right.
Ron Westfall: And so I think this is going to be exciting. It can definitely add momentum, for example, to private network builds. Also to being able to meet the specific needs of verticals that are very well suited for 5G SA capabilities. I think we’re seeing that with, for example, smart cities also with healthcare vertical, the finance sector vertical and so forth. So this is, I think all very important.
And what I think is something that needs to be underlined here is in order to meet that 35,000 tower goal, Dish is anticipating that they’re going to spend up to $10 billion to meet the nationwide open RAN 5G network goal that they have. So that I think is going to be good news for the entire ecosystem, but we’ll certainly keep the vendors, their partners and all the other folks who are supporting this pretty much engaged and definitely focused on 5G as a critical spend area.
Shelly Kramer: Yeah. Absolutely. Absolutely.
Ron Westfall: And one last thing, Shelly on Dish is that there is the hack incident. I think that is something that interrupted Dish’s momentum in terms of its 5G nationwide build. And the good news is that they basically have fully addressed the incident. That is they’ve spent $30 million in cybersecurity related expenses to clean up the hack. But also to have in place the security measures that are required to prevent such an occurrence from happening. And that’s going to be vital as they actually bring on customers onto their native 5G network. And so that’s going to set the tone for them to be able to actually be able to meet the demanding enterprise requirements. And it could be actually a blessing in disguise. Now they know that there’s a vulnerability that won’t be there as least theoretically in the near future.
Shelly Kramer: So I think the key takeaway here is that while the headlines say that Dish is cutting down or slowing spending on 5G, that is not indicative of a slowing down in any way of the 5G ecosystem. It’s maybe recognizing that Dish has some big obligations that it’s working toward fulfilling by this June. We’re coming off of a cyber incident that costs $30 some million. And taking a breath is not necessarily a bad thing when it comes to these things. I think that’s our key takeaway.
Ron Westfall: That’s a wonderful summation. I definitely believe that folks understand what’s going on with Dish right now and what the implications are for all of 5G.
Shelly Kramer: Absolutely. So speaking of Dish, we’re going to keep dishing about Dish. And the company recently filed a petition with the FCC hoping to block T-Mobile’s purchase of 600 megahertz spectrum from Columbia Capital, which is supposed to be a $3.5 billion deal.
Some backstory. T-Mobile shared plans to purchase the spectrum from Columbia Capital last year, but FCC approval is still pending. Dish hopes to, by this move by the petition that they’ve filed, either completely block the deal or at least modify it. Dish is claiming that allowing this purchase would afford T-Mobile a little bit too much power, a little bit too much of a competitive advantage over others that are interested in holdings in this band. And perhaps block them from using the spectrum and then alleging potential competition in the 5G arena. T-Mobile of course, disagrees with these claims by Dish, and they state that the acquisition from Columbia is in the public interest. It will not raise costs for rivals. It won’t get in the way of competitors entering the market.
And it’s important to note that these 600 megahertz licenses are important because they’ve been playing a key role in T-Mobile’s 5G network for years now. As companies have been able to lease unused spectrum, especially during the global pandemic to shore up their wireless networks against traffic spikes. Remember back in the early days of the pandemic when we had all of these news about massive traffic spikes because of course people were using wireless networks in ways that we hadn’t quite done so before.
Anyway, T-Mobile and Dish have a history of squabbling over spectrum related issues. In light of what we just talked about in terms of Dish pulling back from 5G investments, it’s worth noting that the company has been considering a purchase of 800 megahertz spectrum from T-Mobile, which is similar in coverage and performance to the 600 gigahertz band. This purchase price was originally rumored to be $3.6 billion, but Dish has recently extended its option to buy that spectrum by 60 days. Their deadline to buy that spectrum from T-Mobile was originally July 1st of this year. It’s been pushed back a quarter to September 1st. It’ll be interesting to see this play out. As I said, this is not unusual for Dish and T-Mobile to be squabbling about things like this. And who knows really what the real story is between trying to block this purchase of T-Mobile’s? But it’ll be interesting to watch this play out.
Ron Westfall: Oh yeah. Yeah, let the legal wars continue.
Shelly Kramer: Let the legal wars continue. And we’re going to move right on from this conversation since we’re already talking about spectrum. We’re going to talk about, just hit briefly on the fact that spectrum and politics are getting in the way of forward progress.
And when I talked about the FCC and Dish filing a motion with the FCC stalling some action, the reality of it is that Congress let the FCC’s authority to auction spectrum lapse this March, which is really unusual. And the issue here is primarily based on concerns coming from the DOD and its allies in Congress who actually want the government to have more control over the available spectrum. And what they’re doing right now is working to figure out the needs of the Department of Defense and what the spectrum needs are to protect our nation, build up our nation’s criminal defense capabilities. And they want to understand what those needs are from the DOD before they let any more auctions happen.
Of course, wireless companies are not at all excited about this. And there are concerns that adding politics to the mix here of course will dramatically slow down the expansion of 5G at a time when we actually need it to speed up.
When you step back from this a little bit and think about the fact, I think sometimes we don’t think about 5G in terms of how does it affect us. But today, about 62% of Americans can get high speed coverage at home. It sounds like a lot. But as you mentioned earlier, we do have a significant problem with the challenges of the digital divide. We’ve got rural communities who don’t have the same kind of connectivity that those of us who live in cities do. We have a lack of infrastructure. In some instances, we have a lack of prioritization and resources in rural areas.
But the reality of it is that people don’t want to wait to be able to use 5G. They want it now. And pretty much every sector is impacted including agriculture, healthcare, manufacturing, education. Just think about rural areas. Think about farmers who are using IOT connected equipment. Rural communities aren’t behind in any way when it comes to embracing technology. They just need to be able to have the network capability to let them do that.
Hospitals, healthcare facilities, manufacturing facilities, those kind of companies are all over rural areas. They need a network that is going to support them. And so I think that this is a situation where we’ve got the federal government involved and Congress is delaying this action on behalf of authorizing the FCC to do these auctions. But the reality of it is that the federal government sometimes moves notoriously slowly.
I think that there are some factors here that are very much at play. And I think it’s critically important that the US not lose its perceived role as a leader in all things 5G and pushing this innovation and our capabilities on this front forward. The FCC commissioners actually have urged Congress to move quickly as the World Radio Communication Conference will be held this November. Which is when countries gather to review and revise international treaties concerning the RF spectrum and things like that. But bottom line, a pause on what the FCC can do here, holding up these spectrum auctions impacts consumers. It impacts our reputation. It impacts the industry as a whole. It just seemed kind of like a good place to fit in this conversation that politics is playing a role here and it is in some ways impacting our forward progress.
Ron Westfall: I agree wholeheartedly. It’s something that wasn’t broke. The FCC’s been auctioning spectrum on behalf of the country since 1994. And President Biden has enabled them to continue that role. Because to your point, Shelly, the legislation did lapse and there have been what can be characterized as extensions by President Biden. But there hasn’t been yet another extension.
And so yes, this is the unfortunate side of something that should be a truly objective, neutral type of process, and that is the auctioning of mobile spectrum. And it’s so true. I mean, it’s something that can interrupt something as vital as fulfilling digital divide objectives, helping sustainability goals across society.
And also it’s a revenue raiser. And so the FCC has conducted over a hundred auctions and raised $233 billion from these auctions. It shows that the auction process is something that benefits the federal government, but also the citizens of the country as well. So yes, please, a swift resolution. This is something that could be fixed. And this is something that should not be subject to the stalling techniques that are sheer politics.
Shelly Kramer: Well, the good news is this does not appear to be a partisan angle in any way. It appears to just be the DOD saying, “We’re trying to figure out what our needs are. We’ve got to study underway.” Which is actually much better than having to deal with partisan issues. I’m going to block this just because you’re in a different party and vice versa. I think that’s a good thing. But just let’s let the DOD move along here and get this resolved because we need it.
Ron Westfall: Yeah, yeah. It’s an indictment of the DOD bureaucracy. I mean, 5G has been around for how long now?
Shelly Kramer: We need it. All right. Well, we’re going to wrap the show by touching base on news that the Qvantel Flex BSS is now available on AWS. Ron, this is a big deal. It’s very exciting. Take it away.
Ron Westfall: Yes, indeed. Yes. This is showing that the AWS marketplace is playing a more integral role in how the telcos are going to be able to take, for example, BSS technologies on a software as a service basis and be able to use it across their 5G SA implementations.
And this is encouraging because it’s demonstrating that this really is an ecosystem play that is using cloud native technologies, using as a service capabilities to really advance the 5G monetization goals as well as use cases. And I think the Qvantel Flex BSS offering is distinct because it’s focused on using no-code or low-code capabilities to enable this offering to be readily available on AWS. Or for that matter, the marketplace of any major cloud provider that’s partnering to enable these capabilities.
Shelly Kramer: This is music to my ears, pre-built out of the box use cases.
Ron Westfall: Absolutely.
Shelly Kramer: Up quickly and running. I mean, that’s what every telco is looking for, the ability to monetize quickly. Music to my ears.
Ron Westfall: Exactly. And in fact, there’s a Mexican CESP, EGU Telecom, I believe is the pronunciation. And they said, “This is exactly what we’ve been waiting for.” To your point, Shelly, this is what 5G has been about from its inception. And it’s been a journey getting to this point now where a CSP and a market such as Mexico can simply go onto a cloud marketplace and buy these BSS capabilities. And this is done within days, weeks, whatever. This is light years from, okay, we have to engage with a strategic integrator or supplier and take more than 12 months to even just get the BSS up and running. And then, oh, by the way, there’s the custom build, there’s all the support requirement. You get the idea. It just took a long time just to get a basic service up and let alone modify it or change it.
Now it’s like about clicks. I mean, this is really demonstrating that this is something that’s going to have more legs. I think this is bringing it all together, that we’re seeing the innovation coming to the forefront. We’re seeing these capabilities actually being used in real world deployments. In fact in deployments that aren’t involved with a top tier operator. Because the top tier operators have been leading the charge, but what about the second tier? Third tier operators have been kind of left behind, but not so much anymore. So this is definitely, I think, leveling the playing field and showing that 5G standalone is going to make that difference in terms of innovation, competition and all the things that will benefit society and consumers as a whole.
Shelly Kramer: Yeah, absolutely. And for CSPs, when I see this, it looks like it comes down to two things, well, actually three things. There’s the ease of use, the out of the box, easy to set up, easy to use, that’s wonderful. But I think it’s all about providing best in class customer experiences, the ability to provide amazing customer experiences, and then opening new revenue streams. And again, music to CSP’s ears. This is what everybody wants. It doesn’t matter how big or small your company is, serving customers more effectively and opening up new revenue streams, that’s the key to survival.
Ron Westfall: Yes. Now, no longer are CSPs captive. They can definitely use this BSS platform as a greenfield, not just for bringing on new 5G standalone customers, but also transitioning their 4G customers onto the platform. That I think is a big difference maker or no longer beholden or have to really bite the bullet and make a massive quantum shift to an alternative BSS platform.
Shelly Kramer: Makes perfect sense. Well, with that, Ron Westfall, my amigo, this is a wrap for this episode of the 5G Factor. To our viewing audience, or our listening audience, or our reading audience, as always, thanks for hanging out with us. We appreciate you spending time with us, and we always look forward to covering what’s going on in the 5G ecosystem. Join us next time, but with that, we’re out and we’ll see you another day.
Author Information
Ron is an experienced, customer-focused research expert and analyst, with over 20 years of experience in the digital and IT transformation markets, working with businesses to drive consistent revenue and sales growth.
He is a recognized authority at tracking the evolution of and identifying the key disruptive trends within the service enablement ecosystem, including a wide range of topics across software and services, infrastructure, 5G communications, Internet of Things (IoT), Artificial Intelligence (AI), analytics, security, cloud computing, revenue management, and regulatory issues.
Prior to his work with The Futurum Group, Ron worked with GlobalData Technology creating syndicated and custom research across a wide variety of technical fields. His work with Current Analysis focused on the broadband and service provider infrastructure markets.
Ron holds a Master of Arts in Public Policy from University of Nevada — Las Vegas and a Bachelor of Arts in political science/government from William and Mary.
