Of the multiple investment projects demanding attention and funding in Guernsey, “5G” has been lagging behind. For at least three years we have put off deciding on the next generation of telecommunications technology to replace the current “fourth generation” format. This being a States matter as well as an industry, business and consumer one, you would think it deserved a high priority. The evidence suggests it is languishing in the “too difficult” basket.
One way to understand 5G is to remind ourselves that, when the current 4G started replacing the old 3G dial-up technology a few years ago, the change was immediately noticeable in the form of faster access to the internet via so-called broadband. “Data” quickly became more important than “voice” or “text”, and the big question among consumers focused on “speed” – of uploads and, especially, downloads.
But change happens fast in this industry, and 5G technology is not simply an upgrade, it is a quantum leap from its predecessor. All wireless devices – cellphones, laptops, desktops – would be connected to the internet and phone networks by high-frequency radio waves through multiple antennae in small cells dotting the geographical landscape. The networks would have wider bandwidth giving higher download speeds of 100Mbps (megabits per second), and they will make possible the “internet of things” and machine-to-machine applications.
This would launch us on the path to the smart city, the smart home, self-driving cars, automation in industry, augmented reality and cloud storage for both work and play. In the jargon, 5G offers “network slicing,” under which mobile services can be tailored for specific uses such as public health and public transport. No longer should it be a matter of individual telecoms operators/providers competing with each other to offer obscure packages of familiar services.
If you’re wondering whether this is important in a place like Guernsey, pause for a moment. What, apart from the mesmerising toll in lives and livelihoods, has been the most obvious consequence of our collective fight against the Covid-19 pandemic? It is surely recognition of where the internet has taken us already. Three simple examples:
- Contactless payments for most transactions. Most people recognise there is now little need to carry wads of notes and weights of coin to get through ordinary life, even if there is always some place for anonymous cash.
- Working from home. “WFH” is now widely regarded as the new modern way of working, helped by applications like Zoom and Microsoft Teams, and delivering jolting consequences for office space, commuting and personal relationships.
- Going beyond email. Twitter, Instagram, TikTok…this is how people offer their opinions or keep up with friends or local events. Entertainment? Hello Netflix, Playstation and XBox.
The name of the game now is “connectivity,” and while our political leaders trumpet it happily, we seem to be struggling to capitalise on the idea. It was back in 2017 that the States started offering a satisfying vista of the future: fibre connections to business districts, a target of 100Mbps to homes, and 5G mobile technology. As for the island’s three telecommunication companies already operating in the market, “the political and economic landscape must enable and encourage them to make the necessary investments to deliver next generation mobile technology,” we were told.
The blandness of such statements disguises the reality which has followed.
- Our main telecoms company with the largest market share, Sure, is a multinational owned by Bahrain-owned Batelco, and is obliged to meet its shareholder’s needs as much as those of its Guernsey customers. It must compete with JT, which is owned by the States of Jersey, and to a lesser degree with Airtel-Vodafone, which concentrates on the mobile sector.
- JT has been focused heavily on fibre investments, while Sure has been happy to keep upgrading its copper-based network. Airtel hopes its parent will be able to offer Low Earth satellite access. The truth is that all three can co-exist. Copper can deliver 100Mbps to destinations close to an exchange. Fibre should be used for new commercial or residential developments. 5G itself plainly offers more connectivity than most users actually need.
- These companies, in pursuing their different 4G strategies, have incurred long-term commitments which are being superceded by technological developments – that is, they are still investing in networks which are in danger of being outdated before these are paid for or have earned their intended return. If they must take on additional debt for a project involving uncertain models of working, they are as much a hurdle as an enabler.
- A trade war between the US and China has meanwhile come to a head with allegations that Huawei, China’s world leader in 5G technology, is a threat to the security of nations which use it. Huawei reckons it is a victim of a “bash China” approach and is profuse in its denials, but several Western countries are now committed to reducing and removing the use of Huawei technology by 2027. This affects Sure, which is using the technology as part of its current 5G trials, but the company says it has yet to decide on suppliers. More pertinently, alternative providers are available: Ericsson of Sweden and Nokia of Finland.
- Unhelpfully, there is a small groundswell of popular feeling that the construction of a new network of hundreds of masts will bring a health threat through intensified high-frequency radio waves across the island. This feeling, some of it stoked by internet “trolls”, has been countered by expert scientific findings but, much like worries over vaccinations, it remains evident, however unjustified it is.
This catalogue of complications has rather undermined the message, and the delay may prove increasingly costly the longer it goes on, particularly as competing jurisdictions press ahead with their own 5G plans. For this don’t look to Jersey or the UK or even Europe – look to Asia, and especially South Korea, to see the longer-term possibilities.
The tantalising thing is, whereas countries like the UK look destined to build a 5G network based on its existing traditional arrangements, Guernsey can still carve a new way forward.
The first step is to recognise that a new arrangement should be established between the existing telecoms companies, the competition regulator and the government. This would involve the States either setting up or partnering with a telecoms infrastructure fund in which it is a shareholder, perhaps even a holder of a golden share. This could be done through an infrastructure cell of the Guernsey Investment Fund, an entity set up specially for this sort of purpose and which has an independent board of directors.
The Fund could then own the network in a public-private partnership, and telecoms and other operators would lease capacity on the network through which they can provide their services. The arrangement would reduce the strain on the telecom companies’ balance sheets, and could also reduce their operating expenditures. Their task would be to compete on price and customer service. The regulator would have the power to investigate and force justification for any monopolistic or oligopolistic behaviour. The Fund would look forward to a stream of long-term income from its participation.
For some, this course of action is a “no brainer”. The cost of implementing 4G has been significant. The cost of 5G could be anything between £50m and £90m. As for the States’ plan to publish a policy letter on the subject before the end of the year, this can’t come too soon. An opportunity to have things in place was missed last year when the States committed to the UK firm Agilysis to overhaul and modernise its own internal systems. We seem also to have ditched our hopes of being an “early adopter” or “test bed”.
As a project, 5G connectivity must surely rank as one of the most obvious opportunities for Guernsey, under today’s mantra, to “thrive”. It is important not just so we can use web-enabled devices and sensors to adjust our central heating or house alarms, plan our television viewing or even ride in driverless cars. It is important because we are an international financial centre blessed with a degree of self-governing autonomy which allows us to go on providing much-needed services to the wider world – not so much to punch above our weight, just to punch.
There is a wider reason why the 5G question is important. It is just one of several costly high-profile investment projects about which decisions have languished over the past three or more years. In a few weeks’ time, we go to the polls in a general election for a new States assembly. Many sitting deputies are likely to campaign on the basis of the island’s great success in combating Covid19. Their record on long-term investment for the future is less impressive. Both aspects should be under scrutiny.