Vodafone UK 5G launch event

July 3rd 2019 and Vodafone have "turned on" it's 5G network to customers.


The Executive team are focusing on a strategy that is about being rational, they are not going to talk about the launch of the new technology as a race. Speed and capacity first, then latency "Goal of 10ms within a few years".  

1. Unlimited data plans for customers and business + New brand campaign
2. Vodafone Together
3. Hatch go live
4. A live 5G world first

They have a 5G Brand Ambassador who will "switch on" the network.

It's Lewis Hamilton a man who's living is going round and round in circles as fast a possible without breaking down. This is one hell of a metaphor for 5G at present.

The gadget fan boys will be wet with joy!

Grumpy OLD folks who remember 3G crash and burn are going to need 

"One cannot judge the value of opinion simply by the amount of courage that is required in holding it," wrote George Orwell to Evelyn Waugh

The last few months public promotion of 5G by Ben Wood and his colleagues at CCS Insight have caused me to question my sanity. Have I lost my faculties or has Ben been bought as a "Social Media Influencer" by EE? Today's activity around the launch of 5G by EE has caused me to conclude that he has been bough lock, stock and barrel by BT and he should tag his posts as paid promotion. In Financial Services his approach would be called in for review and it should not be different in the telecoms world.

Clear advantages to #5G if you want to download an album on @Spotify in "very high" quality. Here's a 4G vs 5G comparison on @Qualcomm powered @OnePlus 6T (4G) vs @OnePlus 7 Pro 5G. Hard not to be impressed by the @EE 5G network. #5GEE (test conducted in #Cardiff) pic.twitter.com/iceFy5Zkqm

— Ben Wood (@benwood) May 30, 2019

I've been using the @EE #5G network in London and Cardiff over the last few days with the @OnePlus 7 Pro 5G. When in 5G coverage I'm consistently getting 200Mbps to 400Mbps with the fastest speed peaking at around 700Mbps. #5GEE pic.twitter.com/DXdfgtY3iQ

— Ben Wood (@benwood) May 30, 2019

Wow. #Stormzy live (and live steamed over 5G) on The Thames in the shadow of @TowerBridge for the launch of @EE #5G network in the UK. #5GEE @bt_uk pic.twitter.com/L1vZIIS9nx

— Ben Wood (@benwood) May 29, 2019

Here's @EE's 5G smartphone line-up: @SamsungMobile's #GalaxyS10 5G, @Oppo Reno 5G, @OnePlus 7 Pro 5G and @LG V50 ThinQ 5G with Dual Screen accessory. #5GEE pic.twitter.com/fNRxb5iSxt

— Ben Wood (@benwood) May 26, 2019

I would expect a first year GCSE Economics student to provide better coverage than Ben is currently doing as they would offer some balance and critical thinking about the recently launched 5G handsets and the launch services Mobile Networks are promoting in launching 5G. The issue is that Ben Wood has spent twenty years developing a brand and networking so that at the moment he is frequently quoted in the media. Some of this is that CEO's of Networks and Equipment Manufacturers are not as vocal as they were and so Journalists pressed for time to create a "package" seek out Ben for easy quotes.

EE are first to market with 5G in the UK, but not in Europe, they are less than a week ahead of Vodafone in launching and have chosen a network strategy that will require more base stations but not necessarily more capacity than Vodafone by the year end. The first subscribers for 5G are unlikely to have connected to the network for more than 15% of their usage by the end of the contract in TWO years. The "leadership" that EE claim to have established in the launch of 4G was such that if left it's then Parents seeking an exit from the UK and accepting a financial loss when sold to BT for equity alongside cash. BT was first to market with the launch of 1G, it had a property portfolio that meant that every base station needed up to 2000 could sit on it's estate rather than deal with third party landlords. Yet by 2000 it had been overtaken by Vodafone AND Orange in terms of leadership and had put Cellnet up for sale.

Thus the launch marketing for 5G by EE can be described as "brave" given the overwhelming demographic of BT's customer base and the very early stage we are in for 5G in terms of business case for consumers adopting the new service. For Ben Wood to take the optimistic view that EE are right to dash forward with a strategy he called "build it and they will come" requires a naivety greater than "the eternal sunshine of the spotless mind". 

Just how can one value Vodafone shares?

The business section of the Sunday Times once again gets me scratching my head about City valuations.

It is early days in the stewardship of Nick Read as CEO and it will be years before we discover if he was more like Arun Sarin than Vittorio Colao. Yet he is in control of an International Telecoms business that is far better placed than BT. Vodafone has stated that it's plan's for 5G mobile is focused on a slow and stead deployment rather than a race to be first. It does not have the issues that Three and Telefonica face in terms of access to capital to fund the building of infrastructure. It has the scale to be able to get not just better prices but also better service from its suppliers.

Are we damed to make the same mistakes with 5G as we did with 3G?

Looking around the European Mobile Network Operators I fear that 5G

 will follow a similar path to that travelled by 3G.

In too many meetings it is obvious that those at the top of the 

organisation do not  have a significant understanding of the details. 

Those with the knowledge do not have the authority to make decisions.

 The gap between these two groups is to wide for it to be easily closed.

The race to launch and the nebulous use case for 5G means that we 

are going to enter into a marketing war between companies whose 

customers see them as less relevant than the handset manufacturers. 

This is because they fail to grasp the  simple fact that for the majority 

of smartphone users they might be wireless but not exactly mobile, 

thus they value good quality WiFi over 4G or 5G.

Operators will need to build infrastructure more suited to demand rather

 than the  current model and adopt a new pricing structure that is not 

tied to handset hire purchasing as the underlying driver. This requires 

executives and senior management that have a keen eye for detail and 

are conversant not only with their own  proposition that also rivals. 

Without that they will be doomed to failure. In every European market 

there is overcapacity and as with fibre providers at the height of the dot 

com era some are destined for collapse into bankruptcy. 

Why it is wrong to talk about 5G as if it is a race

Looking at a lot of the coverage this year about the Mobile Network Operator's plans to launch 5G services and they are framed a winning the race to 5G, the prizes for those that are first. This is at best simplistic in the extreme; it frames the argument in a metaphor that is simply WRONG.

Is everyone starting in the same place?

Are the covering the same distance? 

Will the encounter the same hurdles?

Are the subject to the same rules and arbitration?

What is the mythical prize that the winner might expect?  

Might the effort to complete the marathon of launching 5G result in the same outcome as the ancient greek who was the first to run the distance, and the victor expires on crossing the finish line?  

Here in Britain EE was seen as the "winner" in the "race" for 4G. It was such a success that three of the four mobile networks were fighting one another to be rescued by BT when it was looking to buy it's way back into the mobile space. The margin of victory was so slim that the General Public were unable to see it. This has to be the definition of a Pyrrhic victory!

The Mobile Network Operators cannot afford to make the mistakes they did with the launch of 3G and 4G over the past 15 years if they are to survive and deliver on the prospects that 5G is supposed to offer. Thus they themselves need to close down the use of the phrase "race to 5G" and reset expectations that this is not just another G rather it is a step change in what is possible and over time data connections will have improved that life will be different in ways that at present cannot be envisaged.      

What might we see with the next generation of mobile technology?

Everyone is excited about the possibilities of the fifth generation of mobile networks to significantly change the way that mobile "phone" control our lives. Here are a few ideas:

1. Using a 3D hologram rather than travelling so that you can be "in the room" with work colleagues and loved ones,
2. Voice Activated Concierge Service that you allow to read your messages, control your diary etc so that you might manage the information overflow of your daily life,
3. Avatar based news feed that allows you to be updated about what you need/want to know when you want without having to flip across a number of services,
4. Autonomous Cars that self report faults and arrange service appointments based on usage and your needs to "drive",
5. Smart Homes that are capable of turning on lights, heating, running a bath, washing machines, cookers and remote access for deliveries whilst also security features using video based on real time location information from your phone and traffic flows so that you get home and find that the house is how you want it,
6. Augmented Reality that uses the camera in your phone to overlay information for you so that you can move around a new space as if you were a local.

Whilst these are all suggestions about what we could see with 5G services they are in fact predictions that Orange made when planning for the launch of 3G nearly twenty years ago. It was the work of those who staffed the Think Tank that was called The Imaginarium it had people with titles like "ambassador of strategy" and "knowledge consul". It right predicted that Mobile Networks will be about providing life services rather than selling phone calls and that there will be no killer app for wireless.  It made some bold bets on that future, paying $137.5M to the Press Association for a digital news-feed and $137.5M for a start up speech recognition service called Wildfire. Under the ownership of France Telecom these bets did not pay off and the people who dreamt of the future left.

Today we have very few Labs within Telecoms Networks and they are not focused on Innovation as they once were. Perhaps 5G might deliver some of what we thought possible with 3G. Perhaps some of what was predicted failed because demand could not be stimulated significantly to create the market.  Perhaps the Executives who started to run Mobile Networks once 3G launched had to manage the debt in such a way that they gave away Customer Relationships to the likes of Facebook, Apple, Amazon, Netflix and Google without getting anything in return. If 5G is to change anything it needs to change the way that infrastructure is paid for and valued.

BT Group Results

The Financial Times Opinion on BT's results talks about the strategy risking a Kodak moment, in doing so they fail to address the Elephant in the Room. This must be music to the ears of  CEO Gavin Patterson.

If the Company is to be turned around, then the job cuts need to be about the closing of businesses that have no future and the loss of 13,000 members of staff is not enough.  Global Services is not a business that works and looks more like Carillion than a magic money tree. The idea that BT Vision can get customers to pay more for services that are not core  has been proven wrong and thus is now the time to close the business?

Yet these plans were not addressed in the presentation rather short terms issues of investment in Next Generation Investment and statutory requirements for funding Pension requirements where the focus. 

If BT Group is to be turned around I do not think that Gavin Patterson is capable of leading the job, and that they need to find talent from outside the company capable of leading the restructure as well as changing the relationship with regulators if the business is to have a future.