Wireless connectivity on trains is set to become a key area of focus for the wireless industry over the coming years. On-board connectivity remains a significant technical challenge; providing connectivity to people within a fast-moving object that often encounters mobile blackspots is inherently difficult. However, pressure is rising from governments and passengers to improve the current levels of wireless service available on trains.
Currently, enhanced on-board wireless solutions face two major barriers. The first is how to enable cellular connectivity. The second is how to secure sufficient capacity for on-train usage and the necessary backhaul where on-train Wi-Fi is installed. While the technologies are available today to solve these challenges, the business case for moving connectivity along remains largely elusive.
Now though we are seeing some interesting moves in the market that may help to break the commercial deadlock we have seen in recent years. In particular governments around the world are now attempting to ease some of the pressure by investing in connectivity for trains. The UK government is investing £50m to ensure passengers benefit from free Wi-Fi by 2017. The state government of Victoria, Australia, has committed $40m to tackle mobile coverage blackspots across the region’s Geelong, Ballarat, Bendigo, Seymour and Traralgon lines.
Although these developments are welcome, ultimately the ‘right’ solution needs to work for train operators, mobile network operators and rail passengers alike. All industry stakeholders now need to work together to produce business cases that can benefit every party involved.
At this time of shifting market dynamics Real Wireless has put together a short guide assessing the current situation with regards to wireless on trains along with our independent expert recommendations for ensuring connectivity remains on track.
The UK currently has around 54,403 mobile phone masts dotted around the country — many of which are on land leased to the major telecoms companies by local landowners.
4,000 leases are due to expire this year, and this could lead to serious consequences for telecoms companies and consumers alike. In the absence of any regulation, lease renewal negotiations could lead to significant demands from landlords for rent increases in a large number of cases. Telecoms companies will then need to either pass on this cost to the consumer, through more expensive tariffs, or remove macrocells completely and create coverage or capacity gaps. The Telegraph recently wrote an article on this topic.
Macrocells are still vital to mobile coverage
Despite advances in small cell technology and Wi-Fi calling, macrocells remain the backbone of the mobile network, delivering the majority of the UK’s coverage and capacity.
There’s no alternative to macrocells, either, that doesn’t involve some form of relationship with a property or asset owner. In-building connectivity solutions like small cells and DAS do improve coverage and capacity in homes, offices and public buildings, but they will never replace macrocells entirely and do not provide wide area coverage in towns and around the countryside.
Operators need to protect their investment
Vital infrastructure is often expensive to provide and macrocells are no different. Operators naturally want to keep hold of their existing assets, given they’ve invested heavily in constructing macrocells in the first place.
Operators and landowners both know the difficulties with finding alternative sites for macrocells and obtaining planning permission and the time and cost associated with doing this would be significant — whilst the operators could resort to invoking code powers this is not a step that would be taken likely but it cannot be discounted completely as an idle threat.
How rent rises will affect mobile provision
The first impact of rent rises is likely to be felt by users in those locations where high costs force MNOs to remove macrocells, resulting in coverage or capacity gaps. Site closures aren’t going to happen overnight, though. MNOs will fight to keep their sites at rental levels that are either at or below the current level. But if landowners insist on increasing site rent by excessive amounts then users will no doubt have to bear the brunt of the costs through higher tariffs. Most likely the operators will pass some costs onto the users and absorb the majority but this will lead to less investment in new infrastructure in their networks and invariably lead to a negative impact on the digital economy generally.
Can the government intervene ?
The story of land rentals is an old chestnut in the mobile industry. The cycle of site acquisition, rental renewals and notices to quit will carry on as long the mobile industry exists — unless the government is prepared to intervene to help regulate the rental levels that MNO’s pay for this essential infrastructure. At the same time, MNO’s need to realise that landlords and building owners should not have their genuine development plans for their land or property undermined by MNO macrocells that may have been on there for many years.
The reliance the British public currently places on their mobile communications and, within a few years, the reliance that the Police and other emergency services will have on their vital communications being carried by mobile networks suggests that this particular debate should be opened up and that representatives from the various parties (MNO’s Property owners and Government) can create a solid and sustainable basis that will help maintain mobile communications services throughout the UK.
The retail sector is one of the most advanced in the use of consumer facing technology. Faced with strong competition from online retailers, the use of innovative technology – supported by in-store wireless – is being used to help encourage people back onto the high street and into stores, as well as opening up new revenue streams and services for the stores.
In this blog post we take a look at some of the retailers that are already making use of technology to enhance the customer experience, and the role that wireless plays in providing this.
Time for dedicated apps
Shopping centres and stores are now increasingly rolling out their own dedicated apps, providing customers with information and support, as well as the latest offers and bargains.
London’s Westfield centre offers a simple, yet effective, example; its app provides customers with offers from their preferred stores, alongside ‘express parking’ that removes the need for a parking ticket to be purchased each visit.
The endless shelf
The downside to shopping online is that we don’t get to see what we’re buying until it arrives, something that puts many people off when it comes to ‘big ticket’ items. On the other hand stores are limited by their physical storage and display space, limiting how much of their range they can stock and display at one time. There’s little more frustrating than seeing something online, visiting the store to see the physical product, and only then finding out it’s not actually in stock.
The Retail of Tomorrow project at Heidi.com’s flagship store in Switzerland attempts to tackle this issue, through the concept of the ‘endless shelf’. The store aims to stock a broad selection of its range, rather than a limited selection in many different sizes and editions. Customers can then get their hands on the product in some form, but then use large screens to view, select and order the product in the exact variation and fit required.
At Burberry’s flagship store on Regent Street, RFID tags are woven into products and accessories, allowing them to be linked to digital product listing and related multimedia content. The mirrors throughout the store are actually screens, which use this information to automatically detect the product being tried-on by the customer and display relevant information.
This system also attempts to enhance the customer’s experience and relationship with the Burberry brand, allowing them to also view runway footage and live streams of fashion events.
The end of queuing
While it may be considered an integral part of the British psyche, queuing is nonetheless a big frustration for shoppers – particularly at the busiest times of the year. It can also lead to sales being lost because some customers will simply not join a long queue.
Retailers are now looking at ways of improving the checkout experience, with point-of-sale (PoS) terminals becoming more dispersed across the shop floor and also providing staff with tablets they can use to display products and take payment.
The other approach is building payment into a dedicated app — something Wagamama rolled out earlier this year. The app enables customers to pay directly and quickly through their smartphone, rather than having to get the attention of staff.
Smarter customer service
Technology is enabling high street retailers to bring the personalised experience that customers enjoy online increasingly inside their stores, delivering recommendations based on previous purchases.
Rather than requiring a sales assistant to spend time asking questions to establish your likes and dislikes, simply scanning a loyalty card using a tablet can instantly provide the assistant with your purchase history – and even tailored special offers.
This functionality gives store staff more information than they’ve traditionally had access to, allowing them to enhance their credibility with customers, and enabling them to take advantage of information from product reviews and accessory lists that they may not otherwise be familiar with.
Looking further ahead, virtual reality offers the potential to add a further dimension to both the in-store and at-home shopping experience. We’re already seeing some stores experimenting with this technology, thanks to the consumer-friendly offerings from Oculus Rift and Google Cardboard.
Virtual reality could also be used to enhance the experience of customers at home, providing a much better idea of how a sofa or TV would look in their lounge, or by enabling them to explore in-store displays in much more detail.
The wireless need
All of these applications rely on some form of data connectivity, and the vast majority rely upon this being wireless connectivity. Whether that’s a secure and robust Wi-Fi network for staff tablets, or mobile coverage so customers can use your dedicated app, wireless is an essential component in the future of retail.
72% of consumers use their smartphone while shopping and more than half of consumers under the age of 40 use their smartphone to get a second opinion before making a purchase. Without proper connectivity, consumers can’t use their phone and are likely to go elsewhere as a result.
In fact, without proper connectivity, consumers may abandon the store altogether and not come back. Recent research has found that 1 in 4 (25%) shoppers admit that they leave a shop if they can’t get online, and 1 in 4 (25%) leave immediately if the shop does not provide Wi-Fi. By contrast, 1 in 3 (34%) extend their visit and nearly half (46%) return if the connectivity is good.
Retailers therefore need to consider a dedicated in-building wireless system, one that provides a clear business benefit to staff and customers alike. For more information take a look at our recent report on the benefits of wireless to the retail sector: http://www.realwireless.biz/wireless-and-retail/
In 2015, mobile users — including both you and I — expect to be able to use our mobile devices and laptops wherever we are.
More than this though, we expect to receive the same level of service, functionality and, increasingly, data speeds, regardless of the environment we are in.
This has big implications for property developers and others that provide commercial property. While most people have been aware of how important mobile connectivity has been within their buildings for business tenants, in the past this has typically been basic voice and SMS access.
In the past developers and building owners typically found that there is adequate coverage and service for these technologies inside their buildings with minimal additional effort; the external mobile network could penetrate their building and serve their tenants to a sufficient level.
However, as mobile data connectivity (and the expectations of users of these services to receive good data speeds) has spread, the need for dedicated infrastructure inside a building to meet these needs has also grown.
It’s also no longer sufficient to rely upon Wi-Fi alone to provide data connectivity, with residents expecting 3G and 4G devices to work inside a building as well as they do outside.
Mobile operators, meanwhile, are becoming increasingly reticent to fund the rollout of this infrastructure for all but the very largest of their corporate customers.
It is therefore increasingly expected that the building owner themselves will invest in the infrastructure required to provide mobile services to people inside the building.
We’ve therefore created a guide that helps outline the wireless need — and business case for installation — that modern commercial property developers face. It outlines how wireless can improve current business models and practices, helping to both attract and retain tenants through enhanced connectivity.
After all, it would seem completely illogical to construct a commercial building that did not include a water or electricity supply, as no business would become a tenant. As mobile adoption amongst consumers and businesses becomes so universal, it’s time wireless connectivity was treated the same.
This week has seen the UK government bring back proposals for national roaming, the idea being that those in remote villages and towns should be able to jump onto rival networks if their current provider isn’t delivering. It’s certainly an admirable initiative and one worthy of discussion – but national roaming isn’t the answer.
There has been plenty of discussion today on the pros and cons of this approach, with The Register doing a particularly good job of summarising the key reasons why this policy is well intentioned but not well thought through.
So rather than going over the same ground, we wanted to look at other potential, viable solutions to the problem.
LTE is coming
As part of the 4G licence award, Telefónica O2 has an obligation to provide “a mobile broadband service for indoor reception to at least 98% of the UK population and at least 95% of the population of each of the UK nations… by the end of 2017 at the latest.” And, perhaps encouraged by this obligation, all the operators have committed to meeting this target by the end of 2015. So much will change in the next year without further government intervention.
While LTE has been in big cities for a while now, it’s yet to reach much of the countryside or the smaller towns. But it’s on the way.
We found that providing 95% of the population with indoor coverage, growing to 98% with gradual enhancements, is not beyond the reach of operators to achieve by the end of 2015. This is a huge improvement over 2G coverage, which even today only currently averages around 85% indoors. We also found that the average indoor mobile data speed available across Scotland will increase from about 2.5Mbps in 2012 to approximately 36Mbps by 2023.
The 4G roll-outs will reach 95% of the population surprisingly quickly, and there are ways to accelerate the rollout to 98%. However, it’s the final 2% that presents the most difficult challenge – but nor is this something national roaming would solve.
Rural coverage is expensive
Building networks is expensive, yet the UK already has amongst the lowest mobile infrastructure investment per head – something we touched on in a previous blog here. This is a real problem and one that puts us behind the rest of the world.
Technology has developed so that operators no longer need to invest in coverage over a wide area, to get service where users need it most – indoors. Vodafone’s open sure signal initiative is a good example of how this can work.
Targeted coverage makes it much more cost effective for operators to deploy sites and also avoids many of the planning challenges that can slow up installations. It’s this sort of technology that needs to be considered when addressing that final 2% figure, rather than expecting a blanket coverage approach. Such technology also provides operators with a way to continue to compete on coverage even as the share more of their wider networks, which is surely in the interest of consumers.
No easy answers
Rural coverage isn’t easy and the challenge has always been balancing the cost of network investment with the potential return. However with the wider rollout of LTE and the development of much cheaper, targeted ways of delivering coverage, there are viable solutions that need to be considered. It’s these approaches that need to be looked at by Government and operators in parallel, rather than pushing ahead with an approach that, while well intentioned, has some significant flaws. Government needs to be aware of the risks of unintended consequences – just one example is the potential impact on national security flagged by police chiefs and the Home Secretary.
Earlier this month, Verizon CFO Fran Shammo finally confirmed that the long delayed launch of VoLTE on their networks will happen in Q4 of this year.
This signals a turning point in the technology; it’s been a long and slow road to get here, but we’re finally at the point where it is starting to infiltrate the mainstream conscious.
Both AT&T and Verizon have committed themselves to offering phones that can take advantage of the new VoLTE technology by Q4 – and I’d hazard a guess that means it is certain to be a standard feature in both Apple and Samsung’s latest generation phones. This in turn will undoubtedly mean their competitors are not far behind with their own offerings.
So far no real surprises. The more interesting question, though, is when will we see the first LTE only devices? After all, many operators and handset manufacturers have made no secret of their desire to turn off 2G or 3G networks.
For the operators, supporting these now legacy technologies not only occupies valuable spectrum, but adds additional infrastructure rollout and maintenance costs.
For handset manufacturers, the need to make use of 2G and 3G networks adds additional modem requirements and costs. These in turn negatively impact battery life and phone size. We’ve recently seen several new companies emerge offering “LTE Only”, thin modems at very aggressive prices, which no doubt has piqued the interest of manufacturers.
Obviously switching over entirely to LTE has only been made possible with the introduction of VoLTE. The lack of voice support has meant that a circuit switch fall back has been a requirement up until now, therefore 2G and 3G networks were a necessity.
Another key barrier up to now has been LTE coverage. Obviously, until this catches up, we’re unlikely to see any operator in a hurry to offer handsets that only support LTE, as this would severely impact their customers’ experiences. But, as we saw in our recent work for the Scottish Government, the speed with which LTE has rolled out means it won’t be long until it catches up – our estimates put indoor 4G coverage in Scotland at 95% by the end of 2015.
Verizon originally forecast the introduction of LTE-only phones to their network by the end of 2014, a prediction that raised more than a few eyebrows. Their updated forecast now pushes this out to early 2016.
I think this is not only likely, but perhaps a necessity; should they wait any longer, the ecosystem will be in place for a competitor to take advantage of their delay.
For a relatively small country with 60 million inhabitants, the UK has four (or six, depending on how you count shared networks) operators competing for subscribers.
Add MVNOs in equation and the contrast between the UK and others – like the US – become readily apparent.
The immediate impact of this is good news for consumers. The options on offer mean UK operators need to prioritise low prices to stand out; in fact average revenue per user in the UK can be as low as a third of that in the US.
However the long-term consequences of this could well be hindering the UK – something that is often forgotten about when discussing how the market will develop.
Low pricing for consumers results in lower profitability for operators, which in turn means a lack of investment in infrastructure. This is compounded by the fact that constructing multiple networks results in an inefficient duplication of resources, which could otherwise be used to increase network coverage, capacity and performance.
So whilst we are a small country with a high population density, coverage continues to be a real challenge. Despite being nearly 40 times the size of the UK, the United States generally enjoys far more complete coverage.
Whilst consumers therefore see low pricing as beneficial and advantageous, in the long run they ultimately receive less ‘bang for their buck’.
With profit margins shrinking in a pricing race-to-the-bottom, operators are facing hard times. It’s not hard to see these figures leading to internal pressure for consolidation – which would in turn have a negative impact on competition.
Innovation too is hampered. After all, with multiple competitors watching your every move in an attempt to capitalise on any mistakes, can we blame any operator that doesn’t want to experiment with a non-proven technology?
One would hope that this situation would ultimately self-regulate, with operators folding in times of excessive competition and springing up when potential revenue is attractive enough, but the high stakes that are currently involved in entering or leaving the market make this unlikely.
But recent EC merger decisions suggest that we are beginning to see proactive steps taken towards resolving this. Rather than obsessing over operator numbers, the focus has shifted towards policing their behaviour at the wholesale level. The thought process being that this will encourage MVNOs to compete more intensely in retailing mobile services, whilst increasing efficiency in the underlying networks and allowing network operators to reap the financial benefits from greater economies of scale.
What is implicit in this is an increased recognition of the benefits that resource sharing can bring. However, I would argue that the EC regulators will need to start thinking about more the sharing of more than just networks.
By encouraging spectrum sharing we can begin to enable access to the wide channel bandwidths, that are likely to be necessary to meet future demand for mobile broadband, and avoid exacerbating the issues surrounding spectrum scarcity we may encounter in the future – something that Sweden, France and Mexico have already begun considering.