BT Maps Out Path to Converged Network

UK operator sets ambitious targets to retain connectivity leadership

Last week, BT executives gave a wide-reaching update to analysts about its network strategy. The news came as the company looks to cement its connectivity leadership under growing pressure from rivals.

A leading aim was to present a unified network platform, based on fibre, mobile and Wi-Fi technologies. Much of the focus was on 5G improvements, including a pledge to increase population coverage from about 40% today to 50% in early 2023. By 2028, BT aims to pass 90% geographical 5G coverage in the UK, surpassing the reach of its 4G network.

The investment looks to cater for a rise of 40% in demand for mobile capacity each year. Notably, BT has seen 5G data traffic more than quadruple since the launch of the first 5G iPhone in October 2020.

BT’s recently acquired 700 MHz spectrum will play a major role in the expansion (see Ofcom Wraps Principal Stage of Latest Spectrum Auction). The band is well-suited to wide-area coverage and deployment is already underway in a small number of UK towns. It has also begun the huge task of replacing Huawei infrastructure, following the UK government’s ban on high-risk suppliers, which was announced in 2020. Although the swap-out will delay overall 5G deployment, BT said that whenever it replaces the infrastructure it will take the opportunity to upgrade a site’s capabilities and add new spectrum.

BT was also keen to highlight improvements in 4G, in part related to its contract to provide the UK’s Emergency Services Network. It plans to expand into 4,500 square miles of rural locations by 2025 and noted that its existing coverage — at more than 85% of the UK’s landmass — is six percentage points, or more than 2,500 square miles, ahead of its closest rival.

Offering the best connectivity is clearly BT’s top priority and the foundation of its premium pricing strategy. Despite many independent tests still ranking it number-one, the operator will be wary of rivals closing the gap; Vodafone has made impressive strides, Three has an abundance of 5G spectrum and the newly created Virgin Media O2 — which has made no secret of its ambition to challenge BT — plans to spend £10 billion on broadband and 5G expansion over the next five years.

EE seized a crucial advantage in 4G after a controversial ruling from Ofcom in 2012 allowing it to launch its network about a year before rivals. It was first in 5G too, in May 2019, but the gap narrowed considerably as Vodafone switched on its own 5G network just a few weeks later and Virgin Media O2 and Three followed suit before the end of that year.

EE now offers 5G in more than 160 towns and cities. Significantly, it claims to use stricter criteria than its rivals, only announcing a location if it has population coverage of at least 35%. Transparency is clearly a sensitive subject for the CEO of BT’s consumer businesses, Marc Allera, who showed a graphic (shown below) comparing EE’s far broader 5G coverage in Bournemouth with that of O2. But he pointed out that although O2 already claims “good” availability, the town still doesn’t qualify under its own definition as a 5G location.

Comparison of EE’s 5G coverage in Bournemouth with that of O2. Source: BT

In standalone 5G, BT will begin commercial trials later this summer. It said the transition will result in a step-change in 5G speeds and reduce latency to between 15 and 20 milliseconds, supporting a host of new and existing services. However, Vodafone appears to have stolen BT’s thunder here, as it has already been trialling standalone 5G with Coventry University for over a year, and last month announced pilots in London, Manchester and Cardiff.

BT presented a range of other connectivity solutions that it says will allow it to offer “on demand” 5G anywhere in the UK and presumably open new revenue opportunities. It will expand its fleet of rapid response vehicles to give new coverage or enhanced capacity at events or hard-to-reach locations and deploy roving masts to provide replacement coverage for infrastructure that’s out of action. It’s also working on offering portable cells for temporary mobile connections, through drones or high-altitude platforms. And last month, BT signed an agreement with OneWeb to explore options to offer low Earth orbit satellite broadband to the most remote parts of the UK.

BT confirmed it will retire its 3G network by 2023. The company splurged over £4 billion to acquire a 3G licence more than two decades ago, but usage has been in steady decline and is now less than 2% of overall data traffic. The spectrum will be repurposed for 5G. BT will maintain its 2G network for longer, to support machine-to-machine services and roaming visitors.

On the hot topic of Open RAN, chief technology and information officer Howard Watson said that BT is an active participant at the Telecom Infra Project (TIP) and has been trialling the technology for some time at its Adastral Park labs. However, BT appears less enthusiastic than Telefonica and Vodafone, the latter recently committing to deploy the technology at about 2,500 sites in the UK by 2027 (see Insight Report: European Operators Set Out Approaches to Open RAN). Mr Watson said he doesn’t expect Open RAN to play a crucial role for BT until the latter part of the decade, allowing it time to observe how it matures and to evaluate initial deployments in areas such as small cells and rural locations.

BT is also eyeing a role in neutral host systems to offer connectivity to other networks in busy locations such as stadiums and airports. These deployments typically make use of small cells and are normally in places where multiple operators can’t each deploy their own solution.

The company largely steered clear of trumpeting its much-publicized recent plans to accelerate deployment of fibre-to-the-premises connectivity (see Instant Insight: BT Results, Fiscal 4Q20/21). But it was keen to position the combination of fixed-line and mobile technology to offer a fully converged network by the mid-2020s that will allow it to offer new services to consumers and enterprises. It will be supported by machine learning to better predict and resolve problems, and enhanced automation to more efficiently allocate resources.

As a part of this, it’s deploying a single converged core platform for fixed and mobile infrastructure that will run on BT’s network cloud platform. This is a crucial step on the long road to integrating the BT and EE networks, which began around five years ago.

Overall, BT landed a very positive network message that demonstrated its unwavering ambition to retain connectivity leadership and play an important role in the UK’s recovery from the pandemic. Of course, the network is only one part of the story and BT is seeking to differentiate in other areas too, such as content, customer care and enterprise services. But with the operator also in early talks about the future of its sports broadcasting business (see Instant Insight: BT Discusses Future of BT Sport) and the pandemic continuing to heighten demand for more reliable connections, it feels as if BT is more focussed on its network priorities than ever.