How Can MSOs Profit From 5G

1. How Can MSOs Profit From 5G Jack Burton Principal, Broadband Success Partners

2. How Can MSOs Profit from 5G? Jack Burton Principal Broadband Success Partners 2 May 2019

3. Agenda • Situation & Definitions • MSO 5G SWOT • Leveraging Assets • Offering Mobile Services • About us

4. Situation • Two Types of Service Providers • Those that provide Infrastructure • Those that provide Services over the Infrastructure • 5G MSO Opportunities exist in both camps • Provider of Infrastructure to those that require it • Provider of Mobile Services to customers

5. What is 4G? • 4G added reasonable support for data transmission to the cellular network • 10X faster than 3G • Multiple sectors per site • More sites • Some small cells • Helped to make data transmission the most popular use of cellular technology • Did not alleviate the need for Wi-Fi supplement

6. What is 5G? • Much higher data speeds in new spectrum • Slightly higher data speeds in old spectrum • Lower latency • Higher connection density (devices/) • New frequency bands • New support for IoT • Ultra-Reliable Low-Latency Communications • Massive Machine-Type Communications

7. How is 5G being implemented? • T-Mobile 600 MHz • Quieter spectrum • New deployment, starting where TV is clear of spectrum • Small cells planned – aided by Metro PCS acquisition • 30 cities planned in 2019 • Sprint 2.5 GHz • Service by May 2019 in some areas • Increase macro towers 20% • Add small cells including strand-mount cells • Add “magic-box” femtocells

8. How is 5G being implemented? • Verizon • 2017: “Home Service” trial in 11 cities including Atlanta, Dallas, Denver, Seattle and Sacramento • 2018: Commercially launched in Sacramento, Los Angeles, Houston and Indianapolis • 2019: 30 cities planned; Chicago and Minneapolis announced in March • Verizon Home Service Details • 300 Mb/s • $50/month for existing VZW customers, new: $70/month • Includes YouTubeTV subscription • Includes Chromecast Ultra or Apple TV device • Includes free Wi-Fi extenders

9. How is 5G being implemented? • AT&T • Launched “5G Evolution/5G E” • Uses 4G phones but displays 5GE on screen - AT&T did this with 4G years ago • CNET reports as “fake” • Sued by Sprint • Core Pillars • Mobile • Fixed • Edge Computing • 2018: Houston, Dallas, San Antonio, Waco, Raleigh, Charlotte, Oklahoma City, Jacksonville, Indianapolis, Louisville, New Orleans • 2019: Las Vegas, Orlando, Nashville, Los Angeles, San Diego, San Francisco, San Jose

10. How is 5G being implemented? • Fixed Access Devices • “Home Service” devices with Wi-Fi customer access • Phones • Motorola Z3 • Samsung Galaxy S10 5G • Alcatel 7 5G, Huawei Mate X, LG V50 ThinQ, Xiaomi Mi Mix 3 May require special carrier-specific options

11. Is this really new? • 5G in conventional spectrum has same opportunities for MSOs that 4G had • 5G backhaul is similar to 4G backhaul • 5G fronthaul is similar to 4G fronthaul, but there is a lot more of it Exploring 5G Fronthaul Intel, 2-2019

12. What’s new? • Millimeter wave spectrum! • Frequency Band (band size) • 28 GHz (500 MHz) • 38 GHz (1 GHz) • 72 GHz (2 GHz) • Massive MIMO Antenna Arrays • With this much spectrum, much higher data rates are possible • 38 GHz band has as much spectrum as a 1 GHz cable system • 72 GHz band has twice that • Multiband – combine mm wave and conventional into one bigger pipe

13. The Trouble with Millimeter Wave • Frequencies do not penetrate any objects • Subject to foliage blockage • Subject to rain attenuation • Limited range through the air • <300m for reliable transmission, though up to 1 km is possible • Verizon: 500 feet in PC Mag tests • Will 5G mm wave to a phone work indoors? Extremely large numbers of cells will be required to effectively use this spectrum

14. How is Backhaul done? • Active Optical • MSO places multiplexer equipment at cell site • Provides active demarcation point • May provide performance monitoring • Passive Optical • MSO sells dark fiber or wavelength services • Optical hand-off • Generally unmanaged • DOCSIS cablelabs.com/docsis-mobile-backhaul-white-paper

15. MSO Traditional Backhaul Business • Some MSOs entered the backhaul business in the T-1 days • Built fiber plant to towers • Built fiber to MSC • Mobile Switching Center, aka MTSO • 4G Upgrades • Ethernet backhaul added • This business will continue

16. MSO Non-Traditional Backhaul Business • Small cell deployment on strand • Altice USA / Sprint arrangement • DOCSIS backhaul • Installed by MSO Technicians • Part of a larger cooperative strategy • Altice creates facilities-based MVNO • No RAN of their own now • Altice USA customers roam onto Sprint network • Can add Altice USA CBRS RAN later

17. What is Fronthaul? • Backhaul connects the Baseband Unit (BBU) to the MSC • Fronthaul connects remote radio heads (RRH) to the BBU electronicspecifier.com

18. Can MSOs Fronthaul? • Optical networks are the only solution • Dark Fiber • Wavelength Services • eCPRI 5G spec adds “midhaul” possibilities • Remote-PHY for wireless • Can reduce fronthaul by 10x • “Cloud RAN” • CPRI rate 12x to 16x the backhaul data rate (14-30 Gb/s) • 25 Gb/s required for 2 Gb/s wireless channel • Many fibers required – 8 per antenna typical • Latency < 1 ms Aviat Networks

19. MSO 5G SWOT Weakness • No mobile offering (exc. MVNO) • Coaxial access – slower upload • Waning interest in Wi-Fi Strength • Fiber-Rich Network • Deep into residential territory • Ubiquitous power • Backhaul, Fronthaul • Small cell sites, Real estate • Customer base Opportunity Threat • 5G Access instead of cable • Cord-cutting taken to a new level

20. MSO Strength • Fiber Rich Network • Plant extends throughout community • Plant available in residential areas where cell site construction may be problematic • Coaxial plant is powered • AC power can be used to run appropriately equipped microcells • Height of aerial plant is useful for 5G

21. MSO Weakness • No mobile offering • Except for Charter and Comcast, no US MSO has a mobile product of their own, or an MVNO deal • Except for Altice USA, no US MSO has announced that they are working on a mobile product • Coaxial access – slower upload • Standard sub-split plant has limited upstream capability • Waning interest in Wi-Fi • As cellular data becomes faster and less expensive, consumers don’t bother with Wi-Fi networks outside the home • Potential is there for in-home Wi-Fi networks to become less necessary

22. MSO Threat • 5G access instead of cable • 5G can provide a large pipe into a residence or business without construction of fiber • New competitors can use 5G technology to access customers • Not just Mobile Operators: Starry • 200 Mb/s Symmetrical; $50/month • Take cord-cutting to a new level • The 5G pipe is large enough that it can provide robust voice and video services in addition to data services • T-Mobile launched 5G powered video service

23. MSO Opportunity • Backhaul/Fronthaul • Backhaul to connect cell sites to MNO network • Fronthaul to connect RF head to radio controller (similar to remote PHY) • Centralized Radio Access Network (C-RAN) Architecture is key for 5G • Small Cell Sites, Real Estate • Strand can hold and power small cells for MNO partners • Headend can house server equipment, radio controllers • Servers may be from 3rd parties for low latency services • Customer Base • Partnerships could provide ready base of new customers for an MNO • Quick way to provide quad-play options

24. Leverage Assets to Meet Opportunities • Backhaul • Take an inventory of available fiber assets • If you have plenty of dark fiber capacity, great • If not, consider DWDM • Fronthaul • You probably do not have enough fibers! • Consider when planning for DAA • Fibers from DWDM Aggregation Point to new deeper nodes is the same architecture as fibers from radio controller to antenna head.

25. Leverage Assets to Meet Opportunities • Small Cell Site Hosting • Do you have enough power? • Do you have fiber capacity? • Do you have DOCSIS capacity? • Small Cell Site Service • Provide technical resources • May require new test equipment • Training

26. Leverage Assets to Meet Opportunities • Data Center server hosting • Do you have space now? • Will space be available following a DAA upgrade? • Do you have enough power? • Will you need specialized power (DC)? • Potential customers include 3rd parties interested in low-latency mobile services, IoT

27. Could we use 5G Access Technology? • Unlicensed spectrum • 3.5 GHz CBRS • 5G NR-U in 6 GHz band • Millimeter wave V-Band 57-71 GHz • MSO could use mm wave for short distances instead of a cable/fiber build • MSO could partner with new wireless access or mobile operator

28. Can we get in the mobile business? • Start a mobile network? • Very high capital costs • Start an MVNO? • Very low margins • Too small to interest major players • Join a cooperative MVNO? • Possible • Low margins • Retention tool / competitive offer • Team with an MVNA / MVNE multichannel.com/blog/moffett-cable-needs-a-better-mvno-deal

29. Mobile Virtual Network Aggregator • Offers wholesale mobile services to MSO • Provide services to your customers under MSO’s brand • MVNA has contractual relationships with mobile network operators • MSO has contractual relationship with MVNA • Consider an MVNA who has established relationships with all the largest mobile network operators to give your customers a choice

30. Mobile Virtual Network Enabler • Provisioning • Administration • OSS/BSS • Customer Service

31. Summary Most likely ways for MSOs to profit from 5G • Provide resources to MNOs • Backhaul • Fronthaul • Small Cell Sites • Data Center Less likely ways • Mobile Network Operation • Access Alternative

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34. Questions?

35. Thank you! Jack Burton Principal jburton@broadbandsuccess.com broadbandsuccess.com