Ookla® Speedtest Intelligence® data illustrates the continued expansion of 5G networks globally, with Speedtest users in India in particular adding many new locations during the course of 2023. Our recent analysis of global 5G performance showed that newer 5G markets such as India, Malaysia, and Brazil have all contributed to an uplift in worldwide median performance. While the number of locations with 5G continues to rise, 5G download speeds show no sign of levelling off, increasing by 17% in 2023 to reach 207.42 Mbps. However, 5G upload performance has stagnated, up only 1% year-on-year to 19.90 Mbps, and latency continues to drag on the 5G experience, with no statistical difference year-on-year, with the median user globally experiencing a 5G connection latency of 44 ms.
To fully appreciate the continued expansion of 5G networks around the world, we’ve created a high-resolution downloadable poster (mobile friendly version available here), detailing locations with 5G based on consumer initiated Speedtest samples.
Ookla will be at Mobile World Congress this year, located at in Booth 2I28 in Hall 2. Please drop by to discuss the state of connectivity in your market, and how Ookla’s network insights can help deliver better connected experiences.
Ookla retains ownership of this article including all of the intellectual property rights, data, content graphs and analysis. This article may not be quoted, reproduced, distributed or published for any commercial purpose without prior consent. Members of the press and others using the findings in this article for non-commercial purposes are welcome to publicly share and link to report information with attribution to Ookla.
Japan has been a leader in mobile technology since its inception, and Japanese companies continue to occupy the cutting edge of mobile telephony. LTE networks in Japan have been able to deliver very competitive speeds in the densest urban areas, which speaks volumes about the cell density of the country’s networks. This article explores how Japanese mobile operators are applying this leading mindset to 5G.
How Japan utilizes spectrum
Japanese operators utilize a “layer cake” spectrum approach, which aggregates multiple frequency bands into data lanes that provide faster speeds. This approach utilizes low 700, 800 and 900 MHz bands, coupled with mid-band 1500 and 2100 MHz and topped off with the high-band 2500 MHz band. With this approach, users with modern devices are able to simultaneously access disparate spectrum bands, which enables better speeds and thus an improved user experience. Combined with Japan’s dense grid of existing cell sites, the spectrum layer cake should provide a good base for the overlay of sub-6 GHz spectrum that Japan has allocated for 5G services.
Timelines for launching 5G in Japan
For the past few years, Japan has been building toward the 2020 Summer Olympic Games in Tokyo as an opportunity to showcase their next-generation wireless technology. Japan began conducting 5G trials as early as 2017. In 2018, Japan’s Ministry of Internal Affairs (MIC) revised the spectrum allocation process to encourage new operators to enter the 5G market. Then in April 2019 the MIC approved 5G spectrum allocations to four applicants: KDDI (au), NTT DOCOMO, Rakuten Mobile and SoftBank.
KDDI, NTT DOCOMO and SoftBank launched 5G this month, with NTT DOCOMO and KDDI first to market on March 25. NTT DOCOMO’s initial 5G launch will leverage sub-6GHz spectrum assets, offering peak download speeds of up to 3.4 Gbps, and peak upload speeds of up to 182 Mbps. Later in June, the operator will start selling 5G devices capable of operating on the mmWave band and accessing 400 MHz of high-band spectrum. This will allow for peak download speeds of 4.1 Gbps and upload speeds of 480 Mbps. SoftBank will launch second on March 27. Rakuten plans to launch 5G by June 2020.
How Japanese operators will use spectrum for 5G
Japanese operators are deploying 5G networks in both FR1 (sub-6GHz) and FR2 (millimeter-wave) frequency bands. Each licensee has been awarded 400 MHz of FR2 spectrum and KDDI, NTT DOCOMO and SoftBank have been awarded 200 MHz of FR1 spectrum. The exception is Rakuten, which requested 100 MHz of FR1 spectrum.
Early trials and infrastructure
KDDI (au) 5G trials started in 2017 with Ericsson, Nokia and Samsung. KDDI awarded all three vendors with 5G contracts. KDDI also inked a seven-year roaming deal with Rakuten, the newest entrant in the wireless space, to provide LTE coverage to Rakuten’s subscribers when they roam outside of their coverage area.
NTT DOCOMO started early 5G trials using several infrastructure partners, including: Nokia and NEC Corp on 4.5 GHz spectrum band, Ericsson and Qualcomm on 4.5 GHz and the mmWave wave, and Huawei for mmWave. Fujitsu has proposed a software upgrade for existing LTE base stations which will enable 5G radio access. NEC Corp offered a small cells product supporting all three frequency bands (3.7 GHz, 4.5 GHz, 28 GHz) leveraging O-RAN (Open Radio Access Network Alliance), which aims to break the single-vendor-per-market lock and paves the way for a smooth transition to 5G software-defined networking and cloud services. NTT DOCOMO awarded NEC Corp, Fujitsu and Nokia with contracts, claiming the world’s first 4G/5G multi-vendor RAN (radio access network) interoperability.
SoftBank initially partnered with Chinese vendors Huawei and ZTE in 2017 to conduct mmWave trials in the 28 GHz frequency band. SoftBank awarded the contracts to Nokia and Ericsson.
A completely new approach from Rakuten, the “optimistic” entrant
Rakuten is a premier Japanese ecommerce company founded in 1997. Rakuten means “optimism” in Japanese, and now the company offers products and services across a multitude of industries, including: banking, mobile payment, mobile messaging (via the Viber app), travel and their own MVNO, to name a few. The company understands the importance of controlling the entire user experience for their customers — and the value of running their own facilities-based mobile network in addition to OTT (over-the-top) services.
Since Rakuten is deploying a mobile network from the ground up using greenfield licensed spectrum assets, the company has decided to do something that nobody has ever done before: disaggregating the hardware from the software and running a fully virtualized, cloud-native network. This LTE network has been fully operational with over 3,000 cell sites in three markets (Tokyo, Nagoya and Osaka) running limited trials since last year — and is expected to launch commercially on April 8. Because of its software-defined nature, the network can be upgraded to 5G, and the operator expects to have the upgrade pushed later this year.
Rakuten’s network architecture is unique, leveraging only antenna-integrated radios from traditional telecom vendors. Radios are fiber-fed via the fronthaul, and instead of processing at cell site cabinets, all the processing is happening remotely at centralized locations using off-the-shelf computer hardware running virtualized network functions. According to Rakuten CTO Tareq Amin, the process of activating a new cell site takes only eight and a half minutes instead of days. After Rakuten’s April launch, years worth of Rakuten’s research and development will be available to other operators globally via the Rakuten Mobile Platform (RMP), which could be very attractive to new entrants in the wireless space, such as DISH in the United States.
We will continue to monitor how these different 5G setups perform as 5G is rolled out in Japan and we look forward to providing future analysis on this topic.
Ookla retains ownership of this article including all of the intellectual property rights, data, content graphs and analysis. This article may not be quoted, reproduced, distributed or published for any commercial purpose without prior consent. Members of the press and others using the findings in this article for non-commercial purposes are welcome to publicly share and link to report information with attribution to Ookla.
This analysis includes Starlink Net Promoter Score (NPS) data for France, Germany, Italy, New Zealand, and the United Kingdom, year-over-year data for satellite providers in Europe and Oceania from Q2 2022 to Q2 2023, and new Q2 2023 data from Starlink in Africa.
Starlink users across different continents continue to love the service
Using Speedtest Intelligence®, we examined NPS ratings data for Starlink users against an aggregate of all fixed broadband providers combined.
NPS is based on Speedtest® user responses after being asked how likely they are to recommend their provider to friends or family on a 0 to 10 scale. NPS ratings are categorized into Detractors (score 0-6), Passives (score 7-8), and Promoters (score 9-10), and is calculated as (% Promoters – % Detractors) x 100. Any NPS score above 0 indicates that a provider’s audience is more loyal than not.
As you can see from the above image, Starlink users in France, Germany, Italy, New Zealand, and the U.K. had an NPS score much higher than the aggregate score for all fixed broadband providers combined during Q2 2023. France had the highest NPS among the aggregate of fixed broadband providers for the countries we surveyed at -15.98 and fixed broadband providers had a much faster median download speed at 165.37 Mbps to Starlink’s 107.56 Mbps. In New Zealand there was a similar story with the aggregate of fixed broadband providers having a -20.40 NPS to Starlink’s 48.83, while having a faster median download speed 147.86 Mbps to 113.78 Mbps during Q2 2023.
Germany, which had the lowest NPS rating of aggregate of fixed broadband providers in Europe at -30.10, also had the smallest difference in NPS with Starlink scoring 38.19. Interestingly, the aggregate of fixed broadband providers and Starlink both had similar median download speeds at 83.16 Mbps and 82.56 Mbps, respectively, during Q2 2023.
Of note, Starlink had much higher NPS ratings and median download speeds than the aggregate of all fixed providers combined in Italy and the U.K., respectively, during Q2 2023. Starlink’s NPS was 50.20 to -25.61 for the aggregate of all fixed broadband providers in Italy during Q2 2023, while the median download speeds were 100.68 Mbps to 63.99 Mbps. In the U.K., Starlink’s NPS was 47.18 to -26.88 for the aggregate of all fixed broadband providers combined, with the median download speeds a little closer, 100.11 Mbps to 77.38 Mbps, respectively.
In our last report, we found a wide NPS gap between U.S. rural Starlink users — who often have fewer options for fixed broadband access — and the corresponding aggregate of fixed broadband providers. Given that all five of these countries have rural or remote regions that are underserved or not served by traditional broadband offerings, it may be no surprise that Starlink users who reside in those areas may feel positive about having access to fast broadband internet.
Starlink speeds over 100 Mbps in 14 European countries during Q2 2023, speeds stabilizing across Europe
Key takeaways:
Starlink results were the fastest among satellite providers we surveyed.
Starlink quarter-to-quarter speeds improved or remained about the same (between 5% and -5%) in 23 countries, while decreasing in 4 countries.
Among the 27 European countries we surveyed, Starlink had median download speeds greater than 100 Mbps in 14 countries, greater than 90 Mbps in 20 countries, and greater than 80 in 24 countries, with only three countries failing to reach 70 Mbps.
Skylogic, while delivering speeds slower than Starlink, showed stabilized broadband speeds over the past year for those seeking a Starlink alternative.
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Over the past year, we’ve seen huge developments in the global satellite market, Europe notwithstanding, with Amazon’s Project Kuiper moving forward, the EU creating its own satellite constellation, and OneWeb and Eutelsat merging. While Starlink continues to lead for performance among satellite providers we surveyed, Starlink has experienced some major hurdles over the past year as users flock to the service and speeds have subsequently dipped — but of note those concerns seem to have started allaying in most of Europe during Q2 2023.
At first glance, year-over-year median download speeds for Starlink are about the same (-5% to 5%) or better (greater than 5%) from Q2 2022 to Q2 2023 in 15 countries and slower (decreasing more than 5%) in 8 countries. But among the 27 countries we surveyed during Q2 2023, Starlink had speeds faster than the aggregate of all fixed broadband providers combined in 11 countries (Austria, Belgium, Bulgaria, Croatia, Czechia, Estonia, Greece, Ireland, Italy, Latvia, and the U.K.) Those speeds were most notably faster in Croatia and Greece for Starlink at 94.41 Mbps to 45.24 Mbps and 108.97 to 44.09 Mbps, respectively, during Q2 2023. Speeds were about the same in four countries (Finland, Slovenia, Germany, and Lithuania), and speeds were slower than the aggregate of fixed broadband providers in 12 countries, most notably in Poland, Spain, Romania, Denmark, and France which saw between 50% and 105% faster aggregate fixed broadband speeds than Starlink.
Quarterly download speeds stabilizing or improving
Looking at results from Q1 2023 to Q2 2023, median download speeds for Starlink remained about the same (between 5% and -5%) in 23 countries, while decreasing in four countries. That’s a big deal, especially given Starlink had median download speeds greater than 100 Mbps in 14 countries, and greater than 90 Mbps in 20 countries, and greater than 80 in 24 countries — with only three countries failing to reach 70 Mbps.
While trailing Starlink speeds, Skylogic recorded median download speeds in Italy at 29.21 Mbps during Q2 2023, a roughly 27% statistical increase year-over-year from 22.28 Mbps during Q2 2022. Notably, Skylogic recorded a median download speed of 68.44 Mbps in Italy during Q1 2023. Among the various countries we recorded Skylogic data for during the past year, the range of median download speeds varied between 19.53 Mbps and 68.44 Mbps, with most speeds between 28 and 50 Mbps, all fast enough to stream 4K video online. Viasat, had relatively similar download speeds in Germany and Italy at 17.22 Mbps and 17.45 Mbps, respectively, during Q2 2023.
Top 10 fastest Starlink download speeds in European countries
Starlink in Switzerland had one of the fastest median download speed among countries with Starlink during Q2 2023 at 122.47 Mbps, followed by Denmark (117.38 Mbps), Austria (111.91 Mbps), Belgium (111.20 Mbps), Hungary (108.97 Mbps), France (107.56 Mbps), Ireland (104.42 Mbps), Estonia (102.38 Mbps), Portugal (101.75 Mbps), and Latvia (100.94 Mbps). Sweden, Italy, Bulgaria, and the U.K. all followed but had speeds greater than 100 Mbps.
Upload speeds for Starlink are down year over year, but quarterly speeds almost all improved or were about the same
Upload speeds for Starlink mostly decreased notably year over year, with only the U.K. showing an improved median upload speed in Q2 2023 out of 27 countries surveyed. However, looking quarter to quarter, Q2 2023 upload speeds for Starlink stayed about the same or improved in 25 out of 27 countries, with only Greece and Ireland showing declines. For upload speeds, Starlink all 27 countries we surveyed had upload speeds between 10 Mbps and 15 Mbps except Portugal (17.70 Mbps), Hungary (16.91 Mbps), Croatia (16.12 Mbps), Bulgaria (15.93 Mbps), Romania (15.82 Mbps), Spain (15.79 Mbps), and Poland (9.11 Mbps). Starlink in Greece was the only instance of a satellite provider in Europe having an upload speed greater than the aggregate of all fixed providers combined, 12.97 Mbps for Starlink to 7.85 Mbps for the aggregate of fixed broadband providers combined. Skylogic showed upload speeds lower than 4 Mbps in both Austria and Italy during Q2 2023. Viasat had upload speeds of 3.51 Mbps in Germany and 4.69 Mbps in Italy during Q2 2023.
Multi-server latency is stabilizing for Starlink users across Europe
As an low-earth orbiting (LEO) satellite internet provider, Starlink has a leg up on some satellite competitors who rely on further away geosynchronous-earth orbit (GEO) and medium-earth orbit (MEO) satellite constellations. However, once again, all the aggregates of all fixed broadband providers in Europe had much lower multi-server latencies than Starlink, Viasat (which had latencies over 600 ms) and Skylogic (which had latencies over 700 ms). That being said, Starlink still saw multi-server latencies under 60 ms in the U.K. (51.26 ms), Spain (53.37 ms), Portugal (55.84 ms), and Belgium (59.34 ms). Starlink saw most countries’ multi-server latencies between 60 and 90 ms.
Starlink speeds stabilize in Oceania
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Oceania, the second least densely populated continent in the world to Antarctica, has rural and remote populations that benefit from (and even rely on) satellite internet connections. Luckily for rural and remote Starlink users, they’ve probably seen a good amount of stability over the past year with Q2 2023 median download speeds in New Zealand at 113.78 Mbps (105.99 Mbps in Q2 2022) and Australia at 104.92 Mbps (102.76 Mbps in Q2 2022). Tonga, which is very remote, saw download speeds drop from 45.25 Mbps in Q2 2022 to 37.95 Mbps in Q2 2023.
Upload speeds also showed some stability with Australia going from 10.45 Mbps in Q2 2022 to 11.33 Mbps during Q2 2023 and New Zealand going from 12.31 Mbps to 14.62 during the same time period. Tonga saw a notable drop in speeds year over year from 19.26 Mbps in Q2 2022 to 6.66 Mbps Q2 2023.
Multi-server latency, which usually will be higher for satellite internet options, showed promising results for Starlink in Oceania during Q2 2023. Multi-server latency dropped noticeably in New Zealand year over year, going from 89.38 ms in Q2 2022 to 46.42 ms in Q2 2023. Australia saw a more modest drop with multi-server latency going from 63.04 ms to 59.78 ms from Q2 2022 to Q2 2023. Tonga saw an increase in multi-server latency from 125.24 ms to 137.16 ms during the same time period.
Starlink in Africa is off to a promising start
Starlink, which first launched on the African continent in Nigeria this past January, is showing intriguing early results. Speedtest Intelligence showed that Starlink in Nigeria had a faster median download speeds than all aggregate fixed broadband providers combined at 63.69 Mbps to 15.60 Mbps during Q2 2023. Upload speeds were more similar during the same time period with Starlink at 13.72 Mbps and the aggregate of all fixed broadband providers combined at 10.60 Mbps. Starlink did have a marginally higher multi-server latency at 55.88 ms to 50.26 ms during Q2 2023.
In Rwanda, median download speeds were a little closer with Starlink recording a median download speed at 63.10 Mbps in Q2 2023 compared to the aggregate of all fixed broadband providers combined at 34.55 Mbps. Starlink trailed behind for median upload speed at 6.88 Mbps to 10.05 Mbps for fixed broadband providers during Q2 2023. Multi-server latency for Starlink was much higher at 320.45 ms to 29.04 ms for fixed broadband providers during the same time period.
The 2023 space revolution is off to a huge start
Here are some major updates about what’s next for various different satellite competitors:
After delays, Amazon’s Project Kuiper aim to launch prototype satellites this fall
China’s grand ambitions to provide internet connectivity to over 362 million people
According to the Wall Street Journal, over 362 million people in China don’t have access to the internet — which is about 1 in every 4 people in China, a large portion of which live in rural or remote communities. In order to overcome that connectivity gap, China is looking to the sky to create its own satellite constellation with potentially over 12,000 satellites. China’s biggest gap seems to be with recreating the success of SpaceX’s reusable rockets — however, initial tests are far underway and a host of reusable rockets are slated for test launches in 2024.
SpaceX’s Starlink service offerings are about to rapidly expand
While Starlink continues to lead among satellite providers in most areas of the world, their expansion is only starting. Looking at the Starlink availability map, Starlink has an incredibly busy rest of 2023 and 2024 in Africa, Asia, and South America — and they’re marking their intent to expand into most of the world. That comes as Starlink marked launching over 5,000 satellites into space at the end of August. With some wiley entrepreneurs already renting out their Starlink “Dishy McFlatfaces” to vacationers and campers for $25-30 dollars a day, satellite connectivity is truly becoming a full-time gig.
Viasat’s bad luck might affect entire industry
Viasat launched the first of its three long-awaited Viasat-3 arrays — but then their first satellite suffered an antenna anomaly, which prevented a large reflector to deploy that affects whether or not the satellite can operate as intended. While Viasat is rushing to solve the issue, this could ultimately trigger a $420 million insure claim for the loss of the $700 million satellite. With such a high-value loss, this could send ripples through the satellite industry, causing insurance premiums to skyrocket for companies looking to mitigate potential losses through insurance. All of this comes on the heels of acquiring Inmarsat in May for $7.3 billion to expand its satellite arrays and spectrum holdings. We’ll be watching to see whether or not Viasat can find a solution.
Eutelsat and OneWeb merger imminent, big moves abound
The Eutelsat and OneWeb merger should make competitors take notice — combining satellite networks, expanding enterprise offerings, and competing in emerging markets has big revenue potential — with OneWeb having an already established LEO network of 630 satellites and Eutelsat offering 36 GEO satellites. Of note, OneWeb recently inked a deal with Telstra in Australia to provide satellite backhaul for locations “where satellite backhaul is a preferred or only viable option.” OneWeb is also partnering with the European Space Agency to develop a next-gen 5G beam-hopping satellite, which could quickly increase connectivity for people traveling or for disaster areas that need emergency connectivity. Shareholders are set to vote on approving the merger on Sept. 28.
European Union greenlights multi-orbit constellation
HughesNet aiming to launch Jupiter 3 array in Q2 2023
HughesNet successfully launched its Jupiter 3 array on July 29, which aims to provide U.S. and Latin America consumers with higher broadband download speeds. While the actual satellite will take some time to reach its geosynchronous orbit and deploy, this satellite adds 500 Gbps of Ka-band capacity for HughesNet, which could see consumers reaching download speeds between 50 Mbps and 100 Mbps. We’ll be eagerly awaiting Speedtest® results from HughesNet’s Jupiter 3 array.
Ookla will continue monitoring new satellite internet developments
2023 continues to be an important year for satellite internet providers. Satellite connectivity is something we’ll be watching closely and we’ll continue our series next quarter with Q3 2023 data from select continents including North America. In the meantime, be sure to download the Speedtest app for Windows and Mac computers or for iOS or Android for devices and see how your satellite internet stacks up to our results.
Ookla retains ownership of this article including all of the intellectual property rights, data, content graphs and analysis. This article may not be quoted, reproduced, distributed or published for any commercial purpose without prior consent. Members of the press and others using the findings in this article for non-commercial purposes are welcome to publicly share and link to report information with attribution to Ookla.
Wi-Fi woes continue. Ookla® Speedtest Intelligence® data shows Wi-Fi performance continues to lag behind ethernet performance within home networks in many advanced fixed broadband markets, with Wi-Fi speeds typically ranging from between 30-40% of ethernet speeds during Q1 2023.
Developed Asian and North American markets lead the charge to Wi-Fi 6/6E. Wi-Fi 4 and 5 remain the dominant Wi-Fi access technologies globally, accounting for a combined 89% of Speedtest® samples during Q1 2023. However, a number of advanced fixed broadband markets are rapidly migrating to Wi-Fi 6 and 6E, with China, Hong Kong (SAR), Singapore, Canada, and the U.S. leading the charge.
Growing Wi-Fi 6/6E adoption helps narrow the gap in Wi-Fi performance. In markets such as Canada, France, Germany, Singapore, Sweden, and the U.S., where the transition to fiber is more advanced, and where ISPs are actively driving adoption of Wi-Fi 6/6E routers, we see Wi-Fi performance closing the gap to ethernet. However, more needs to be done in other markets, where migration to more advanced fixed access networks is exposing the limitations of the installed base of Wi-Fi routers.
Router vendors pushing the envelope with Wi-Fi 7 capable launches. ASUS leads the market for Wi-Fi 6/6E routers among Speedtest samples, and both ASUS and other leading router vendors have been quick to launch Wi-Fi 7 capable routers. Despite this, Wi-Fi 6 and 6E remain the growing component of their installed bases. ASUS leads the market according to Speedtest Intelligence with 39% of its routers we sampled supporting Wi-Fi 6/6E during Q1 2023, well ahead of second placed NETGEAR with 26%.
Smartphone device support indicates Wi-Fi 6/6E should remain the immediate focus for ISPs. With the two largest smartphone vendors globally, Samsung and Apple, currently shunning Wi-Fi 7, ISPs waiting to see if they can leapfrog Wi-Fi 6E to Wi-Fi 7 should stay their hands. The fact that China still needs to allocate the 6 GHz spectrum band — key for Wi-Fi 6E and 7 — for unlicensed use is also significant, and appears to have weighed on the Wi-Fi 6E adoption among China’s leading Android smartphone manufacturers.
Wi-Fi performance continues to lag ethernet within the home
ISPs in advanced fixed broadband markets are increasingly looking to offer more advanced Wi-Fi routers and solutions such as mesh networks, which are designed to improve Wi-Fi coverage and performance. However, Speedtest Intelligence data shows that more needs to be done to improve Wi-Fi performance, which typically ranged from between 30-40% of ethernet speeds. Median Wi-Fi performance as measured by Speedtest will tend to lag behind median ethernet performance, depending on distance of the end-user device from the router, including any obstacles and signal interference the Wi-Fi signal needs to traverse to reach the device.
Our analysis of Speedtest Intelligence data reveals that driving greater adoption of more advanced Wi-Fi routers can help ISPs narrow the gap between Wi-Fi and ethernet performance, with ISPs in Canada, France, Germany, Singapore, Sweden, and the U.S. already successfully doing so over the past year.
Despite this, the results are not always positive, with the gap between Wi-Fi and ethernet performance widening, in particular in the U.K. and Taiwan. Where markets are rapidly migrating from more legacy fixed broadband technology to advanced cable and fiber connections, Wi-Fi performance can lag relative to ethernet, indicating a need to accelerate the adoption of more advanced Wi-Fi technologies.
Older generations of Wi-Fi 4 and Wi-Fi 5 remain dominant globally
While much of the focus of the device ecosystem is on spurring adoption of the latest Wi-Fi standards, there is a long way to go before even Wi-Fi 6 becomes a dominant standard globally. Based on Speedtest Intelligence data, the proportion of Wi-Fi tests by generation (a good proxy for adoption) shows that Wi-Fi 4 and Wi-Fi 5 remain the dominant router technology, with Wi-Fi 6 representing just under 10% as of February 2023, and Wi-Fi 7 showing very few samples. The share of samples from Wi-Fi 4 routers has fallen by 6 ppts year-over-year, while Wi-Fi 5’s share of samples has marginally increased.
Asian and North American ISPs lead the charge to Wi-Fi 6 and beyond
ISPs are the main driver behind the adoption of new Wi-Fi standards, as highlighted by a 2022 study by Parks Associates, which found that 52% of U.S. consumers acquired their router from their ISP. Rolling out more advanced routers to their customer bases enables them to take advantage of the increased performance of newer generations of Wi-Fi technology, and helps to ensure ISPs deliver faster speeds, particularly over fiber access networks.
Adoption of Wi-Fi 6 varies by market, even among the most developed fixed broadband markets globally. ISPs in a number of advanced fixed markets have already begun offering Wi-Fi 6E routers to their customer bases, with ISPs in North America in particular moving in this direction, including Bell Canada, Rogers, Telus, Verizon, XFINITY, Charter, and Frontier, as well as leading ISPs in advanced Asian and European markets.
Markets in Asia led the way on Wi-Fi 6 adoption, with China and Hong Kong both recording 42% adoption, followed by Singapore with 37%. Outside of Asia, North America showed the next highest level of adoption, with the U.S. and Canada recording 32% and 30%, respectively. European fixed markets lagged behind, with adoption ranging from 13% in the U.K., to 24% in Sweden. For markets such as Chile, which placed towards the top of the Ookla Speedtest Global Index™ for median fixed broadband speeds, a relatively low-level of Wi-Fi 6 adoption (8% in Q4 2022) signals further opportunity for ISPs in the market to boost performance.
The fastest growing markets, in terms of increasing share of Wi-Fi 6 of Speedtest samples year-over-year in Q1 2023, were Canada and Malaysia (+15 ppts), Singapore (+14 ppts), and Hong Kong (+12 ppts). While there was considerable variance between ISPs within each market, leading ISPs such as SmarTone (Hong Kong), DiGi (Malaysia), and ViewQwest (Singapore), are prompting a competitive response so that even ISPs with lower levels of Wi-Fi 6 adoption are prioritizing the technology and seeing adoption grow steadily.
Country
ISP
Wi-Fi 6 %, Q1 2023
Hong Kong (SAR)
SmarTone
62.4%
Canada
Bell pure fibre
57.3%
Singapore
ViewQwest
53.7%
Singapore
MyRepublic
50.3%
Malaysia
Digi
50.2%
Malaysia
Maxis
49.0%
Hong Kong (SAR)
NETVIGATOR
44.2%
Canada
Rogers
43.4%
Singapore
M1
41.7%
Singapore
SingTel
41.4%
Canada
Telus PureFibre
41.0%
Hong Kong (SAR)
HKBN
41.0%
Canada
Shaw
39.0%
Singapore
StarHub
35.6%
Hong Kong (SAR)
HGC
30.0%
Malaysia
TIME
28.8%
Malaysia
TM
21.5%
In addition to providing newer routers, ISPs are increasingly positioned to help consumers solve Wi-Fi performance issues in the home, such as offering mesh Wi-Fi solutions. For some ISPs, this has even taken precedence over offering newer Wi-Fi 6E routers, as they look to improved coverage within the home as a faster route to improving Wi-Fi performance.
In the U.K., BT has prioritized whole-home coverage over Wi-Fi 6E with its BT Complete Wi-Fi (mesh) offer, despite the U.K. regulator Ofcom having released the lower portion of the 6 GHz band for unlicensed use in 2020. In Canada, Telus, while having recently released a Wi-Fi 6E router for its broadband users, also offers its WiFi Plus package, which includes professional installation and “wall-to-wall coverage” throughout the home. Rogers also offers guaranteed Wi-Fi coverage throughout the home, as well as Wi-Fi 6E routers. Plume offers a subscription-based service, HomePass, across a number of markets, which allows users to add additional access points to help eradicate not-spots or poor Wi-Fi signal within the home and also offers solutions for ISPs looking to improve their Wi-Fi offerings. In Hong Kong, China Mobile Hong Kong (CMHK) was the first ISP in the market to offer a fiber-to-the-room service, while it and other ISPs such as NETVIGATOR offer consumers the option to subscribe to multiple channels over fiber with separate IP addresses, allowing them to divide their activities across channels and thereby help avoid congestion.
To capture the full performance benefits of Wi-Fi 6E and Wi-Fi 7, countries must allocate 6 GHz spectrum for unlicensed use, therefore allowing Wi-Fi devices to access this higher frequency, higher capacity spectrum, and utilize wider channels. At present, according to the Wi-Fi Alliance, allocation of the lower portion of the 6 GHz spectrum band (5,925 MHz to 6,425 MHz) is common among developed economies, with some notable exceptions in some developed markets in Asia and Asia Pacific, in particular China, while allocation of the full 6 GHz band is more limited, available across North America and some Latin American markets, as well as Saudi Arabia and South Korea.
Wi-Fi 7 on the horizon as router vendors continue to push the envelope on performance
Wi-Fi performance continues to scale, and with Wi-Fi 7 routers and smartphones having launched in the second half of 2022, that trend is set to continue. In addition to higher throughput, successive Wi-Fi generations also support lower latency, helping to better support higher quality video streaming, cloud gaming, and future use cases linked to concepts such as the Metaverse and other uses of extended reality (XR).
The major silicon vendors, Broadcom, Qualcomm, and Mediatek, were quick to update their solutions to support the emerging Wi-Fi 7 standard, and hardware vendors have followed suit. Chinese vendor H3C was the first to launch with its H3C Magic BE18000 Wi-Fi 7 router in July 2022, and it has since been followed by other major vendors including tp-link, ASUS, and more recently NETGEAR. However, the prices of early Wi-Fi 7 routers that take advantage of Wi-Fi 7’s range of enhanced performance capabilities will be a barrier to entry for many, with tp-link’s flagship Archer BE900 currently retailing at a cost of $699.99.
Speedtest Intelligence data shows minimal Wi-Fi 7 adoption as of March 2023, however we are likely to see the same vendors drive Wi-Fi 7 adoption that are currently leading on Wi-Fi 6. Based on global Speedtest Intelligence samples, we see ASUS leading the market in Wi-Fi 6 penetration, with 39% of samples recorded using Wi-Fi 6 compatible routers. NETGEAR and Belkin followed, but for the remaining major router vendors, Wi-Fi 6 penetration currently stands at close to 10% or below. Wi-Fi 6E remains a small but growing subset of Wi-Fi 6 certified devices, currently standing at 7.7% of products based on the latest Wi-Fi Alliance data. Of these, a majority are either routers or smartphones, with an almost even split between the two.
Smartphone support indicates ISPs should focus on Wi-Fi 6E for now
With Samsung releasing its Galaxy S23 range in February 2023 without Wi-Fi 7 support, and Apple’s latest iPhone 14 smartphones limited to Wi-Fi 6, it’s clear that, for now, ISPs should prioritize the rollout of Wi-Fi 6/6E among their customer bases rather than consider leapfrogging to Wi-Fi 7. The Xiaomi Mi13 Pro was the first Wi-Fi 7 capable smartphone to hit the market, launching in December 2022, although it was limited to Wi-Fi 6E initially, requiring a software update to enable Wi-Fi 7. The availability of Wi-Fi 7 supporting Android smartphones will grow through 2023, enabled by SoCs from leading vendor Qualcomm with its flagship Snapdragon 8 Gen 2, and MediaTek with its Dimensity 9200. Apple, on the other hand, lags on the latest Wi-Fi standard support, with the iPhone 14 series featuring Wi-Fi 6, and with its fall 2023 models rumored to be adding Wi-Fi 6E to their feature list.
Samsung, as the leading Android smartphone vendor globally, has the largest installed base of smartphones supporting Wi-Fi 6 and Wi-Fi 6E, and has stolen a march on its main rivals Xiaomi, OPPO, and Vivo. While the major Chinese smartphone vendors have launched Wi-Fi 7 compatible devices, the lack of assignment of 6 GHz spectrum for unlicensed use in China does appear to have held them back relative to brands such as Samsung and ASUS.
The outlook for Wi-Fi in the home
It’s clear from the gap between Wi-Fi and ethernet performance that ISPs need to do more to improve the customer experience for Wi-Fi users within the home. Part of the solution lies in rolling out more advanced generations of Wi-Fi technology, given Wi-Fi 4 and 5 remain the dominant technologies deployed globally. However, evidence linking increased adoption of Wi-Fi 6 to overall Wi-Fi closing the gap to ethernet performance is mixed, and validates the approach of ISPs looking to also offer mesh networking Wi-Fi solutions. Contact us to find out more about how Ookla Research can help you monitor the performance of your networks, and stay ahead of the competition.
Ookla retains ownership of this article including all of the intellectual property rights, data, content graphs and analysis. This article may not be quoted, reproduced, distributed or published for any commercial purpose without prior consent. Members of the press and others using the findings in this article for non-commercial purposes are welcome to publicly share and link to report information with attribution to Ookla.
Internet service providers and mobile operators have spent decades optimizing their networks to provide the best speeds possible so consumers can achieve seamless connected experiences. However, the internet and how we use it is changing; bandwidth is no longer all that matters for networks operators to deliver on the possibilities that a connected world can offer. While latency has always affected connectivity, latency and responsiveness metrics have become increasingly critical to network operators focused on delivering a superior connected experience and supporting evolving consumer use cases. Read on to learn why latency matters to quality of experience, why you need to consider latency now, and how Ookla® can help you measure what matters most.
Bandwidth is now an economics problem, latency is the new opportunity horizon.
Why latency matters
A 2009 study detailed that every 100 ms of additional latency on Amazon.com, cost the company 1% of revenue. While speed has always been the focus for optimization, since the end user delay was caused by the delay of downloading data assets, now that bandwidth has increased for many people around the globe, the bottleneck for these folks is the time delay between two systems communicating.
Latency is the bidirectional roundtrip time between two endpoints.
Latency matters for every online experience. While best known for gaming, video conferencing, and streaming video, the underlying internet protocols powering modern experiences rely on bidirectional communication to negotiate encryption keys, determine routing paths, and request resources. As a result, the typical request on the internet requires two to five round trip communications between various entities over different latency sensitive protocols (DNS, TCP, TLS, and QUIC/H3).
On a gigabit connection, 500 ms of additional latency dramatically affects the page load time. It can take 7x to load a full webpage when latency is high, as seen in the example below.
In addition to web browsing, video and voice calling needs a latency below 300 ms to provide an acceptable experience. This is a physiological threshold — below 300 ms — where the human brain can manage the delay and not speak over other parties. Above the 300 ms barrier, it’s difficult to maintain a coherent conversation.
Think back to the Amazon example above: You may not be directly losing money when your customers see a slow page load due to high latency, but you are providing a poor network experience that will result in increased customer service costs and churn. In fact, one study from the University of Massachusetts Amherst and Akamai concluded “…an increase in the startup delay beyond 2 seconds causes viewers to abandon the video. Using regression, we show that an additional increase of the startup delay by 1 second increases the abandonment rate by 5.8%.” Of course, network operators don’t control the full experience here, and things like CDN location can really affect an end user’s experience, but consumers don’t have visibility into that and the more you can optimize the portions you do control, the less negative feedback you’ll receive.
Latency will matter even more in the very near future
The future of the internet is bidirectional where download and upload communication are necessarily performed simultaneously. Whether AR and VR or self-driving vehicles, this will require dramatic improvements in latency.
How Ookla measures latency
Ookla uses three main measures of latency, each of which helps you understand a specific set of issues.
Unloaded latency
Unloaded latency is our classic measure of latency, looking at the time it takes for a bidirectional round trip on the last mile of a connection under no load. This is a best case measure of latency.
Multi-server latency
Multi-server latency measures latency to multiple connections and then takes an average. This is a better representation of a customer’s experience as their connection pulls media and other information from a variety of locations around the internet. Poor multi-server latency can show the need for improvement in peering arrangements and transit. This metric tests to on-net and off-net locations.
Loaded latency
Loaded latency measures latency under a large load. We represent both download loaded latency and upload loaded latency and this metric gives an approximation of how a network performs with poor buffer management or if a background app is using a lot of bandwidth.
Global latency today
Given the importance of latency to consumer experience today, it’s clear that there is much room for improvement in latency at a global level. Investments in better latency will make for major improvements in connected experiences overall, including video calling, internet shopping, and other day-to-day internet activities.
Latency is key to present user experiences, and will be the defining factor for unlocking future connected opportunities. The first step to improving latency on your network is to have the data to make informed decisions. Look forward to future articles where we dive into how to use this data to identify common areas of latency bottlenecks and optimize your network. If you’d like to discuss how our data can help you improve latency on your network, stop by Booth 2i28 in Hall 2 at MWC.
Ookla retains ownership of this article including all of the intellectual property rights, data, content graphs and analysis. This article may not be quoted, reproduced, distributed or published for any commercial purpose without prior consent. Members of the press and others using the findings in this article for non-commercial purposes are welcome to publicly share and link to report information with attribution to Ookla.
Moves by mobile operators in the U.S. to offer fixed-wireless home broadband services are further blurring the lines between fixed and mobile networks. Cable operators in the U.S. are responding to this competitive challenge by driving the U.S. market further towards convergence, in the form of fixed-mobile bundling. This trend is driving greater competition in the market, lower prices, and more choice for consumers.
Speedtest Intelligence® data shows opportunities for cable companies and the big-three national operators to leverage positions of strength in one access technology to cross-sell to consumers and drive adoption of bundled services.
U.S. operators should look to European operators’ experiences with service bundling, where they have been shown to reduce churn and offer ARPU uplift opportunities, but require operators shift from a focus purely on price, to driving improvements in the consumer experience.
Fixed and mobile networks are already being used in tandem. For example in the U.K. BT includes a SIM within its Halo routers to offer redundancy to its fixed broadband customers. And already in the U.S. Comcast utilizes its XFINITY Wi-Fi hotspot network to provide high capacity coverage for its customers, allowing it to improve network performance in areas where 5G signal typically struggles to penetrate, while also offloading mobile traffic to its fixed network.
Looking to the future, we anticipate more strategic moves to drive improved consumer experiences as the convergence of fixed and mobile networks continues. The emerging set of Wireless Wireline Convergence (WWC) standards being developed by 3GPP and the BBF offer up some unique capabilities, but as ever, vendor and operator support will be key.
Blurring the lines between fixed and mobile networks
Fixed and mobile networks are becoming increasingly complementary, extending the reach of internet connectivity, performance, and reliability. Fixed networks support wireless devices through Wi-Fi offload in the home and via public and operator Wi-Fi access points, often in locations where cellular signals face propagation challenges. Additionally, wireless networks can provide cellular redundancy to fixed broadband services, often via a SIM added to the router.
Cable companies have offered mobile services for some time now via MVNO agreements, (Cox is set to be the latest example), and are able to utilize their Wi-Fi hotspot networks to offer greater coverage and capacity to subscribers. Ookla® data indicates that for markets such as the U.S. that have widespread fixed broadband penetration, mobile users spend approximately 75% of time on average connected to Wi-Fi networks, as opposed to wireless networks. This number ranged from a low of 67.5% for T-Mobile, to a high of 80.0% for cable operator Comcast’s XFINITY. This helped XFINITY and Spectrum rank as fastest overall mobile service across their respective service areas when considering 5G and Wi-Fi access combined.
On the flip side of the coin, the growth in fixed-wireless access (FWA), particularly via higher-speed 5G spectrum, offers an alternative to existing fixed networks. In the U.S., fixed wireless is already being used to cover locations that would be too costly to lay fiber to reach, and is also being offered as a competitive alternative to existing fixed networks. Both Verizon and T-Mobile have championed this approach, and are seeing strong growth in their respective fixed-wireless customer bases, although fixed wireless still represents a small proportion of overall fixed broadband subscribers.
Fixed and wireless technologies also play an important role in today’s backhaul networks, with fiber instrumental in extending the reach and capacity of mobile networks, and microwave point-to-point wireless connections still common in many parts of the world for backhaul. Throw satellite connectivity into the mix via the growth of LEO constellations, and it’s clear that there’s no one-size-fits-all solution for providing universal connectivity — a blend of technologies is required.
Fixed-mobile bundling — initially focused on cost savings for consumers
The growth of fixed-mobile (convergent) bundles in the U.S. is occurring amidst a slowing of the global economy, with inflation running into double digits in many markets, pushing them towards a possible recession. This could well spur the adoption of fixed-mobile bundles in the U.S., paralleling the experience of many European markets during the last prolonged economic downturn which began in 2008. In this economic environment, a number of European operators introduced convergent bundles, offering them at an overall discount to the discrete underlying services.
While not prevalent in all European markets, fixed-mobile bundles have taken hold in many key markets, championed by regional powerhouses including Telefonica and Orange. Orange even goes so far as to highlight convergence as the “bedrock of our strategy,” and has pursued M&A across Europe in order to combine fixed and mobile assets in order to pursue a convergent strategy.
Initially, European operators pursuing convergent bundles saw a reduction in churn, as including more services within a bundle for multiple people in a household made these customers stickier. Over time, operators looked to drive increased ARPU by including additional services, particularly broadcast television and video streaming. For consumers, fixed-mobile bundles also offer managerial benefits, adding the convenience of a single bill for all telecoms services in a household and gives the account holder more control over telecoms expenditure as a result.
More recently, in European markets where fixed and mobile bundles have become commonplace, we’re seeing moves to expand the value offered to customers, to avoid ARPU erosion. For Movistar, this included a recent rebrand of its Fusion offering to MiMovistar, and a move to include services such as health, gaming, and security. The key lesson for U.S. telcos is to avoid a race to the bottom that will harm margins and ultimately investment. Instead, telcos should focus on extending the value delivered from fixed-mobile bundles. For cable companies with MVNO agreements driving Wi-Fi offload for their mobile customers can help improve performance. It also keeps wholesale costs down, allowing them to be more aggressive with their mobile pricing.
U.S. fixed-mobile service overlap — battle lines drawn
To estimate the current overlap in fixed and mobile subscriptions by provider and look at bundling opportunities within the U.S., we used Speedtest Intelligence data to show the share of Speedtest® samples for mobile devices conducted via wireless networks versus Wi-Fi. Cable operators Spectrum (Charter) and XFINITY (Comcast) show very high degrees of overlap, as explained by their sales model where mobile is not offered as a standalone service, but only as an add-on to their fixed broadband subscriptions services.
Overlap in fixed and wireless subscriptions (Q3 2022 | Speedtest® Data)
WIRELESS
WIRELINE
AT&T
T-Mobile
Verizon
Spectrum
XFINITY
Other
AT&T Wireless
20.5%
0.1%
4.9%
21.7%
21.2%
31.6%
T-Mobile
11.2%
0.2%
7.8%
24.9%
26.1%
29.9%
Verizon Wireless
9.2%
0.1%
10.9%
23.1%
21.3%
35.3%
Spectrum
2.2%
0.1%
1.0%
85.7%
2.0%
9.1%
XFINITY
2.4%
0.1%
1.3%
2.1%
87.5%
6.7%
Three main takeaways emerge from the data:
AT&T has a larger wireline footprint than Verizon, and this shows over 20% of its wireless customers also access AT&T’s fixed broadband service according to Ookla Speedtest data versus Verizon’s 10.9%. Both companies have opportunities to drive further mobile uptake among their fixed user bases.
T-Mobile has a greenfield opportunity for fixed wireless, where strong 5G network performance should help it capitalize on both mobile and fixed net additions.
Sizeable proportions of the big three’s mobile user base (in excess of 40%) accessing fixed Wi-Fi via either Charter or Comcast, represent a significant opportunity for the cable companies to expand their mobile user bases.
Beyond fixed-mobile bundling — driving experiential improvements to network service
The advent of 5G, alongside the COVID-19 pandemic, has helped drive growth in the use of data intensive services including video calling, video streaming, and mobile gaming. As these services continue to grow in popularity, and as consumers begin to demand more immersive extended reality (XR) experiences that push the boundaries of today’s networks, so operators will need to improve the performance of both fixed and mobile networks, while also looking to opportunities for network convergence to support enhanced service experiences and reduced operational costs.
High-throughput 5G service utilizes higher frequency spectrum bands than has been used for previous generations of mobile technology. These spectrum bands have lower propagation properties, particularly in-building, mandating that operators further densify their networks to offer consistent performance. Operator Wi-Fi hotspot networks can offer an alternative to this, providing a secure fixed network connection in locations where 5G signals can often degrade. In the U.S., cable companies have also begun to offer differentiated network speeds to their mobile subscribers when connected to their Wi-Fi networks, provisioning faster network speeds to capable smartphones.
Standards bodies have also identified a need to help drive fixed-mobile convergence. The development of Wireless Wireline Convergence (WWC) standards by 3GPP and the Broadband Forum (BBF) seeks to allow operators to converge existing fixed and mobile technology stacks using a common 5G core network. In doing so, operators will move to a single control plane for fixed and mobile sessions, enabling them to offer customers seamless connectivity via fixed and mobile access while also allowing them to aggregate the performance of both access networks to help drive enhanced performance and reliability. In doing so, this will allow operators to streamline the set of network functions and processes required to operate their networks, while also allowing them to simplify their Operational and Business Support Systems (OSS and BSS).
Leading operators such as Deutsche Telekom and BT are actively moving in this direction, with Deutsche Telekom in September conducting a proof of concept lab trial of WWC standards to steer traffic from a 5G residential gateway and route traffic along the entire wireline access chain to the core network. According to Ahmed Hafez, VP of network convergence at Deutsche Telekom, “convergence will allow us to optimize our network assets and deliver new, differentiated service experiences to our customers regardless of the access used.” BT has also signaled its intent to move to a single transport and core network serving both fixed and mobile services as it looks to accelerate the convergence of its mobile and fixed services in the U.K. under a single brand, EE.
While it’s clear that pioneers in the industry are looking to push the envelope on fixed-mobile convergence, there’s still a long way to go. We look forward to more operator trials of WWC standards, but ultimately it will also require the vendor ecosystem to integrate these standards in their product roadmaps to help spur adoption. If you’re interested to find out more about Ookla Speedtest Intelligence, and its wealth of fixed and mobile consumer initiated data and insights, please get in touch.
Ookla retains ownership of this article including all of the intellectual property rights, data, content graphs and analysis. This article may not be quoted, reproduced, distributed or published for any commercial purpose without prior consent. Members of the press and others using the findings in this article for non-commercial purposes are welcome to publicly share and link to report information with attribution to Ookla.
The recent recommendation from the Telecom Regulatory Authority of India (TRAI) around providing an enabling framework for enterprises to build their own private networks is in line with other 5G markets, where governments are looking to drive the digitization of key industries. However, Indian operators see this as limiting their return on investment in the 5G spectrum. Looking at the example of private networks across Europe, and Germany in particular, we believe that Indian telcos shouldn’t see TRAI’s proposal as a threat. Rather, they should use the buzz around the spectrum for verticals as a way to get enterprises interested in digitalization.
The overall financial health of the Indian telecom industry remains fragile. Furthermore, operators’ ability to invest in upgrading their network is negatively impacted by low average revenue per user (ARPU) levels and high regulatory costs. As a result, India’s mobile performance is affected. According to the Speedtest Global Index™, in March 2022 India ranked 120 (out of 142 countries) with a 13.67 Mbps median mobile download speed vs. the global average of 29.96 Mbps. The 5G network rollout will require intensive capital investment and allowing enterprises to have access to dedicated spectrum can potentially limit operators’ 5G-addressable revenue.
The case for 5G in manufacturing
On the consumer side, 5G will boost Indian mobile performance, as we have postulated in our recent article, new 5G launches in Asia Pacific point to a potential 10x increase in median download speeds (5G vs 4G-LTE). However, 5G will also deliver socioeconomic benefits in India, on account of a number of 5G use cases that could enable new applications across all sectors. According to GSMA Intelligence, 5G is expected to contribute around $455 billion to the Indian economy over the next 20 years, accounting for more than 0.6% of GDP by 2040. One of the sectors that stands to benefit from 5G is the manufacturing sector, representing 20% of the total benefit. Retail, ICT and agricultural sectors should also benefit.
The Indian government has already zeroed in on making India’s manufacturing sector more competitive on a global scene. As such, the “Make in India” goal is to make India self-reliant and also to increase the share of the manufacturing sector to 25% of GDP “in the coming years.”
As of now, this is a distant goal. China is still the world’s manufacturing superpower, accounting for 29% of global manufacturing output in 2020, followed by Japan (17%) and Germany (5%). All of these countries have embarked on digitization strategies.
In addition, manufacturing companies look to optimize and control production processes, improve safety, and reduce costs in order to maximize the return on investment. The COVID-19 pandemic has exacerbated existing challenges and pain points for manufacturers, highlighting the need to improve supply-chain resilience and boost production speed and flexibility. However, even before the pandemic, the manufacturing sector was undergoing digital transformation – the so-called fourth industrial revolution or Industry 4.0, referring to the use of technologies such as machine learning, edge computing, IoT, digital twins, and new networks to aid automation and enable data exchange.
According to Ericsson, typical revenue increases when manufacturers digitize their processes come from increased throughput and quality (2–3%), while typical cost savings originate from improved capital efficiency (5–10%) and decreased manufacturing costs (4–8%). A proportion of manufacturers will need dedicated network resources to meet their transformation goals and ensure data isolation and security. According to the GSMA Intelligence Enterprise in Focus 2020 survey, 22% of manufacturers require location-specific coverage (e.g. factory, campus).
Historically, Wi-Fi has been the connectivity choice for private networks. However, mobile technologies such as 4G/LTE and 5G are better suited to Operational Technologies’ network requirements of high volume, high reliability, mobility, and always-on operations. 5G and 5G Standalone in particular offers the most benefits related to eMBB, massive IoT, and critical IoT. Additionally, enterprises decided to deploy proprietary networks to have more control over their networks; the increased security offered by isolating their data from public networks is an attractive benefit.
Private networks aren’t new
A number of countries are looking to private networks to address Industry 4.0 objectives and awarding spectrum for vertical use e.g. Germany, Japan and France. According to GSA data, as of February 2022 there were 656 organizations deploying LTE or 5G private mobile networks. GSA’s data points to the manufacturing sector as a strong adopter of private mobile networks, with 111 identified companies involved in known pilots or deployments, which is up from 51 at the start of 2021.
Dedicated spectrum available for private mobile networks has already been allocated in France, the United States, Germany, Japan, and the United Kingdom. Germany is considered to be a poster child for Industry 4.0. Afterall, the term “Industry 4.0” was coined at Hannover Messe over a decade ago. It is therefore only natural to look to Germany and its approach to private networks. In Germany, the national regulatory authority (BnetzA) is promoting industrial policy and reserved 100 MHz in the 3,700-3,800 MHz for local networks, noting that the spectrum can be used in particular for Industry 4.0. “By awarding spectrum for local 5G networks, we are creating scope for innovation for enterprises,” stated Jochen Homann, Bundesnetzagentur President. As of April 15, 2022, the Federal Network Agency (BNetzA) received a total of 208 applications for the allocation of frequencies for local 5G networks and granted the same amount.
We have commented on how the private networks landscape is developing in Europe here. Simply assigning spectrum to verticals isn’t enough to drive market adoption. In an upcoming analysis, we will discuss how the French government has prioritized 5G as an avenue to drive digital transformation of the economy via a number of funds. According to the GSA, there were a total of 66 private networks all together in France, Germany, and Japan, despite enterprises being able to acquire spectrum since 2019.
Despite the 208 applications that BNetzA received, the GSA has counted 45 private networks in Germany, with a majority distributed between three verticals: manufacturing (14), power and water utilities (11), and devices testing and lab as a service (seven).
It is important to note that globally, as per the latest GSA data, only 21% of networks were 5G only, and mostly composed of test networks. Until the 5G device ecosystem matures, the majority of private networks will remain 4G/LTE, though using equipment that is 5G ready. Only after the availability of industrial-feature-rich 5G release 16 chipsets, which will happen in the next few years, will the 5G deployments move beyond trials and proof of concept into full scale deployments. Germany is an outlier here: 5G and 5G SA are making headways in Germany. Audi, KUKA, Volkswagen, and Siemens take an active role in testing and deploying 5G SA private networks utilizing localized spectrum in the 3500 MHz band (n78).
The many routes to market
TRAI has proposed an enabling framework for enterprises to build their own private networks via a range of deployment scenarios, including spectrum leasing and dedicated spectrum. The Cellular Operators Association of India (COAI) representing major telecom companies such as Bharti Airtel Ltd, Reliance Jio Infocomm Ltd, and Vodafone Idea Ltd. opposed this, stating that TRAI should: “Disallow private enterprise networks for the financial viability and orderly growth of the telecom industry, which is more than capable of delivering these services to businesses”.
Yes and no. Operators can utilize various deployment models, from public dedicated networks through hybrid networks (network slicing, public/private campus, private RAN with public core) to private networks. Within these various models, network slicing and edge computing add the benefits of QoS, privacy, security, and specific SLAs.
When it comes to private networks, the typical rules of engagement no longer apply, and with network virtualization continuing, the ecosystem of vendors has expanded beyond traditional telco players. Just recently Cisco entered this crowded market that already consists of operators, hyperscalers, startups, and equipment vendors. Amazon’s introduction of AWS Private 5G network is a good example of the growing “coopetition” trend. In some cases, AWS would work with operators to provide 5G core and edge computing capabilities, while in some others, it could compete to offer end-to-end solutions. Nokia is looking to address the enterprise demand in India via working with network operators, but also by working directly with enterprises, as Ricky Corker, Chief Customer Experience Officer, Nokia recently stated.
We can draw lessons by looking at the approach that European operators took when addressing the enterprise opportunity. Deutsche Telekom has been offering campus network solutions for enterprises since 2019, and now operates more than ten such local networks based on 5G non-standalone technology or LTE across Germany. In January 2022, the operator expanded its offering to include location-specific 5G mobile networks for companies based on 5G Standalone Technology (5G SA), powered by the Ericsson Private 5G portfolio. The operator can also position itself as a systems integrator (SI) for 5G private networks for Industry 4.0 by utilizing T-Systems’ credentials and its deal with AWS.
Similarly, Vodafone takes an active role in deploying private networks, and distinguishes three degrees of industrial control depending on a private network setup.
In the first scenario, a dedicated mobile private network (MPN) brings total control to the enterprise because everything stays on site. There is no interoperability with public networks. This is particularly well suited for mission- or business-critical applications that don’t need to interface with the public internet.
The second option is a hybrid private network, which is a blend of public and private infrastructure. It enables interoperability with public networks for those devices and users which move outside the private network, while at the same time giving the end user a choice regarding where the data is stored.
The third option, a virtual private network, uses a dedicated slice of a public 5G network. End-user control over the setup is reduced, but compared to the public network it has a dedicated network resource, and allows for greater data isolation, security and privacy, and further SLA customization (availability and reliability). According to Marc Sauter, head of mobile private networks for Vodafone’s business division, network slicing hinges on future releases of the 5G standard, available from next year. “That is when virtual private networks will be more relevant, and a new market will open up with smaller customers.” Vodafone is also very vocal about the importance of the ecosystem, and working on innovation. In its innovation hub in Milan, Vodafone works with developers and startups, and large companies can play around with 5G use cases.
Leveraging existing credentials and forming partnerships to go beyond core competencies can open up new markets for operators. Partners’ ecosystem is key, and to be successful, operators need to partner across the ecosystem. As enterprises’ needs vary, having a broad portfolio of vendors that can address various verticals, technological, and coverage needs will only stimulate the growth of the market.
Indian telcos have already embarked on this journey. Airtel has partnered with Tech Mahindra for a joint 5G innovation lab to develop “Make in India” use cases for the local and global markets, including customized enterprise-grade private networks. These services will combine Airtel’s integrated connectivity portfolio of 5G ready mobile network, fiber, SDWAN, and IoT along with Tech Mahindra’s SI capabilities.Meanwhile, Vodafone Idea (Vi) joined forces with A5G Networks to enable industry 4.0 and smart mobile edge computing in India. They have jointly set up a pilot private network in Mumbai using existing 4G spectrum.
Rather than seeing spectrum for verticals as a threat, operators can use it as a way to get enterprises, in particular manufacturing companies, interested in digitalization. According to the FICCI-EFESO survey, 36% of organizations will implement “Use of Industry 4.0 technologies for predicting failures in machines, products and processes” in the next 1-2 years, while 22% have already done so. The opportunity is there for the taking.
To learn more about how Ookla® has worked with operators and industries to help plan for 5G growth, contact us.
Ookla retains ownership of this article including all of the intellectual property rights, data, content graphs and analysis. This article may not be quoted, reproduced, distributed or published for any commercial purpose without prior consent. Members of the press and others using the findings in this article for non-commercial purposes are welcome to publicly share and link to report information with attribution to Ookla.
