Vodafone reveals wider 5G rollout; rivals welcome stop-gap plan

Vodafone NZ technology director Tony Baird: gunning for 94 per cent 5G coverage in three years. Photo / Jason Oxenham.

Vodafone has fleshed out its 5G rollout plan. Technology director Tony Baird tells the Herald the telco will have 1400 5G cellsites in three years, giving 94 per cent of the population access to the faster, more capable mobile technology.

Pundits have been expecting each mobile operator's 5G rollout to take five years or more to reach ever corner of the country. Baird says the accelerated rollout was a key element of new owners Infratil and Brookfields' strategy, and first emerged during due-diligence talks.

At the same time, rivals Spark and 2degrees can take heart from a new stop-gap, short-term 5G licence plan that could help them close the gap with Vodafone. Spark, especially, is now hinting at an earlier launch (more on which below).

Vodafone will begin its rollout in December, with 100 cellsites upgraded to 5G across Auckland (which will bag 70), Wellington, Christchurch and Queenstown. It technology partner will be its 4G incumbent, Finnish company Nokia Networks.

The telco will also deploy 20 5G cows (cellsites on wheels) before Christmas, which will be deployed around events and holiday hotspots.

5G offers scads more raw bandwidth (Baird says we can expect speeds about the 300mbit/s mark initially - or faster than most UFB fibre connections - with more than triple that possible down the track). But another key element of the mobile upgrade is lower latency or lag with with two-way connections such as videocalls or multiplayer gaming. Low-latency has long been a key advantage of landlines over mobile; 5G eliminates the gap.

Communications Minister Kris Faafoi - looking to accelerate 5G rollout with short-term radio licenses while ducks are put in a row for a spectrum auction. Photo / Mark Mitchell

Vodafone NZ's initial 5G rollout will be as per the GSM Release 15 spec, with latency below 40ms, which will be followed by a Release 16 upgrade in around 18 months, which will take latency to below 10ms.

Spark is aiming to launch its first 5G coverage in July next year, following what it calls a "multi-vendor strategy" (read: "Ericsson and Cisco rather than Huawei"), while 2degrees has yet to outline a timetable. Its new CEO Mark Aue recently told the Herald that 4G will provide enough bandwidth for years to come.

How did Vodafone NZ manage to get a jump on its opposition, especially with the government yet to set a date for its 5G spectrum action (which is expected to see 80 to 100MHz of 5G-friendly airwaves put on the block) amid a Treaty claim and other hold-ups?

Baird explains that Vodafone was in the unique situation (in NZ) of already having some 5G spectrum in its pocket, thanks to its earlier acquisition of TelstraClear, which saw it inherit 58MHz of 5G-capable spectrum in the 3.5GHz band.

Earlier this year, Communications Minister Kris Faafoi said, "National spectrum rights in the 3.5GHz band will be available to use from November 2022 when the existing rights in this band expire." (On top of Vodafone, the existing rights holders are the Crown, Crown-owned Kordia, satellite company Inmarsat, Spark - albeit with a much smaller slice than Vodafone - and rural connectivity player Connecta, a subsidiary of Compass Communications).

Faafoi hoped to kick things off earlier, however, and now MBIE is assessing whether to offer short-term 3.5GHz licenses for "parties that have capability to deploy 5G services in the timeframe mid-2020 to October 2022."

Telcos (and potentially wireless ISPs) have until October 4 to file expressions of interest.

So far, it's all relatively loosy-goosy. MBIE's Radio Spectrum Management Unit says it won't finalise technical and commercial details until it knows the full range of parties interested. For now, most things are up in the air, including whether the short-term allocation will ultimately go ahead.

An MBIE spokeswoman did confirm that the short-term spectrum would be allocated on "commercial terms," however.

There are two other provisos: those who do end up with a short-term licence will have no inside running on that bandwidth once the official 5G auction kicks off - and the related provision that any spending on 5G related to spectrum that they ultimately fail to grab at the auction will be on their own bat and not "refundable" in any way.

Spark spokesman Andrew Pire said, "We welcome the opportunity and look forward to participating in the process with MBIE – with a view to accessing sufficient C Band [3.5GHz] spectrum to bring credible 5G services to New Zealanders by mid 2020, if not earlier."

A spokeswoman for 2degrees, which finds itself in the odd position of being offered 5G spectrum before it wants it, and presumably wary of looking a gift horse in the mouth, said: "2degrees has been pretty open about the fact that we will build a 5G network, but at the same time noting that 4G can be enhanced to deliver much of what a mobile user will need for years to come. That said, we think will express an interest in accessing short term spectrum."

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For the 5G auction itself 2degrees, Spark and essentially everyone chasing Vodafone will be looking to see whether the government caps the abound of bandwidth that any one player can bid on, and the settlement terms (for the 4G spectrum in 2014, a $5m deposit was required - a some what daunting amount for smaller rural wireless broadband players, but successful bidders were also given five years to pay in installments).

The 4G auction proved something of a windfall for the government. Crown coffers swelled as successive rounds saw the following paid for 4G-friendly spectrum

• Telecom (now Spark): 2x20 MHz ($149 million)
• Vodafone: 2x15 MHz ($66 million)
• 2degrees: 2x10 MHz ($44 million)

Faafoi, however, will be cognisant that it's swings and slides. High bids will ultimately have to be recouped in higher chargers to consumers, while caps on how much party can bid could help lower Treasury's haul but boost competition.

The minister also has to grapple with the aforementioned Treaty claim, and take into consideration the GCSB blocking Huawei from Spark's 5G upgrade.

Spark, which already has Cisco and Ericsson gear at the core of its network, can more easily replace Huawei gear at its edges (with its initial rollout or permanently) while 2degrees, as an all-Huawei shop, is in a trickier position.

2degrees boss Aue recently told the Herald he was confident Huawei-related issues would be resolved in time for the telco's 5G upgrade.