Nokia: 5G to debut in LatAm as last-mile connectivity

Following our series of interviews with major telecom infrastructure providers, we sat down in São Paulo with Wilson Cardoso, chief technology officer (CTO) in Latin America for Finnish supplier Nokia, to talk about market perspectives, the future of networks and the macroeconomic scenario in Brazil and in Latin America.

In this first part of the interview, Cardoso addresses Nokia's planned 5G tests in the region, the first use cases for the new mobile technology generation and what can be done with legacy 2G and 3G accesses.

BNamericas: We've seen a couple of 5G lab tests in Brazil. But moving beyond indoor tests, is Nokia committed to 5G field pilots this year?

Cardoso: Yes, we are.

BNamericas: With more than one operator? When would that be?

Cardozo: Yes, with more than one. We expect that before Christmas we'll have trials with at least two operators in Brazil. Not to mention the lab tests we've already carried out and the trial we had with [telecom operator] TIM in 3.5GHz frequency bands made available by [telecom regulator] Anatel.

BNamericas: Will these planned pilots also use 3.5GHz? Has Anatel already authorized the temporary use of the frequency for these new tests?

Cardoso: No, because we haven't requested it yet. It should be noted that this first test we carried out with TIM was a test for the mitigation of interference with satellite, and the results were very good.

We have another two tests in the pipeline - I can't name the carriers - which will also involve fixed-to-wireless [FWA] application of 5G for residential broadband with speeds of up to 1Gbps.

BNamericas: Are there tests planned with other carriers in other Latin American markets?

Cardoso: Yes, we're in talks to conduct similar trials in other countries in the region too, but I don't have the details yet.

BNamericas: When do you think 5G will start to become a reality in Brazil and across the region?

Cardoso: It will all depend on when frequencies will be awarded by the regulators. We have 3.5Ghz spectrum standing out as the most likely candidate for 5G use in most of the world and it's also in the Anatel pipeline for an upcoming auction which, according to all indications, should take place in the second half of next year.

If all goes well, I believe that by the end of 2019-beginning of 2020 we'll have the first 5G deployments.

We have studies that show when the spectrum currently assigned to each carrier will be saturated. That means that depending on the operator and on the traffic growth curve, it doesn't matter much whether more massive rollouts will take place in 2020 or 2021, because when the spectrum gets saturated in terms of data usage, we will have two options: either deploying more sites, more radio base stations, or coming in with the 3.5Ghz frequency for 5G, offering much more capacity.

We believe that the most reasonable solution from a cost-effective standpoint is to get to the saturation of 4G networks, which should happen around 2020, and then offer a new layer of 5G for the provision of fixed-wireless broadband.

BNamericas: So, in your opinion 5G will start out as last-mile connectivity for fixed networks, rather than a wireless network for advanced IoT, for example?

Cardoso: Yes, this is the most obvious initial path we see for 5G.

Sure, there are also industrial applications, IoT, etc, but we believe this will take place in a second stage. Mobile broadband, or rather fixed-to-wireless broadband, represents a natural evolution of the networks, while the other applications and use cases tend to be more complex to push forward.

BNamericas: How about 2G? We could soon have a scenario with four mobile technology generations - 2G, 3G, 4G and 5G - existing simultaneously, which means massive maintenance costs for carriers. In your opinion, can 2G be shut down soon? Will it be shut down before 3G?

Cardoso: It won't be easy to disconnect 2G. If you talk to any developer of systems for the tracking of vehicles and fleets in general, you'll see that all the solutions are still manufactured to run on 2G networks, and this is because chipsets for 2G are a lot cheaper than for other technologies.

Not to mention we still have a large legacy base of 2G accesses. What we do believe is that this 2G base can be reduced, but not totally shut down, in a short period of time.

We have over 10mn M2M devices in 2G. These aren't cell phones, in exchange for which carriers could offer subsidies to encourage their replacement, but M2M devices.

BNamericas: Are we already at an inflexion point, where the costs to keep 2G networks became greater than the revenues they generate?

Cardoso: I don't think so, because of the volume of traffic we still have on 2G. But we're moving towards this point.

What we also need to bear in mind is that a large of part of the 2G networks are already being modernized.

BNamericas: Through refarming [of 2G bands for 4G]?

Cardoso: Exactly. When a carrier carries out the refarming for 4G, it ends up modernizing the old 2G network, which means that the operating cost of that network also goes down very significantly.

With respect to 3G, and for all the reasons mentioned above, we believe that the natural thing is for 3G to be discontinued before 2G. This is where many countries are heading.

Essentially this is because 4G does what 3G does in a much better way. And the same will be true for 5G. 5G will do what 4G does much better. But unfortunately, the same isn't the case for M2M and we still have this significant base of 2G terminals that will remain there for the foreseeable future.

It's much easier to replace an old smartphone with a newer smartphone, 3G to 4G, than migrating that base of M2M devices.

What we imagine is a good solution to keep 2G in a stable cost matrix is to maintain a single network shared by all operators. This is possible to do. It can be done without disrupting the other networks - 3G and 4G - and guarantees that each of them maintains its regulatory spectrum and its obligations with Anatel. With the current base and spectrum assets we have, we can refarm the "pieces" of spectrum and form a single 2G network for the four or five operators and maintain it for years to come, and one day turn that 2G network into an IoT network to capture the traffic overflow they'll have in the future.

BNamericas: Ericsson mentioned something similar. Have you already proposed that to the operators?

Cardoso: We have.

BNamericas: And what has been their response?

Cardoso: I'd rather keep my strategy under wraps.