As the year draws to a close the ALCAN team reflect on some of the biggest industry news over the past 12 months. 2021 has again been a year like no other as businesses have felt the impact of the compound effect of a pandemic, material shortages, rising costs, shipping challenges. Despite a gloomy backdrop we have seen a number of exciting industry developments and ALCAN CEO Onur Karabey gives his take.
January-February
In January, Verizon set out its vision to offer mmWave 5G to customers. It planned to increase the number of transmission sites adding 14,000 sites to reach 30,000 by the end of 2021 reaching over 80 cities. Indeed by the beginning of December 2021 Verizon had surpassed its mmWave site target and was serving customers in 87 cities.
CEO viewpoint: Although analysts were somewhat dismissive of Verizon’s stance on 5G, based on the area of coverage this increase in mmWave sites would be able to provide, it certainly marks a step in the right direction. As much as it is a more challenging technology to grapple with, ultimately, true 5G that is 16x faster than can be achieved sub-6GHz needs mmWave and is the next step in the evolution of mobile networks. mmWave is unavoidable and those operators like Verizon that are tackling it head on and finding ways to make it commercially viable will see the benefit in the long term.
March-April
March was an interesting month for mmWave as we saw US operators commit a total of $7.5 billion to 5G mmWave bands in the FCC auction, almost triple the $2.7 billion in raised by two prior mmWave auctions. Although this is not quite the $80.9 billion spend on C-band we saw in January, it shines an interesting light on operator attitudes to mmWave.
CEO viewpoint: We saw Verizon talk the talk on mmWave but investment in spectrum shows a commitment to making this widely available. Beyond Verizon, this spectrum auction marked a significant shift in operator mindsets on mmWave. Previously the cost and physical challenges of mmWave frequencies had been seen as a barrier to high frequency 5G, but the spectrum auction figures demonstrate that operators are starting to see the benefits of mmWave and that there are technologies available to work around the challenges of roll out.
May/June
June saw a flurry of announcement on the topic of satellite internet, but it was Elon Musk’s keynote at MWC that stood out. He estimated SpaceX’s satellite broadband network, Starlink, would boast 500,000 users within the next 12 months, giving us an insight into his vision for the convergence of satellite and telecoms.
CEO viewpoint: June was truly a month that shone a spotlight on the future of satellite and its place on the communications landscape. Musk’s vision for satellite as laid out at MWC demonstrated an ambitious but achievable goal for Starlink. The key to this, as with most things, pricing will be key to success. Starlink closes 2021 with around 100,000 subscribers but with upfront costs of over $500 per consumer along with a $99 per month subscription cost, it is likely that more cost-effective consumer hardware and a more palatable monthly cost will be needed to see the 500,000-subscriber vision become a reality.
July/August
Summer saw the announcement of Halo’s driverless cars, which would be operated remotely using T-Mobile’s 5G network later in 2021. It joins the driverless vehicle club, alongside Lyft and Motional which also offer driverless rides, but what does this mean for the future of connected cars?
CEO viewpoint: It is great to see adoption of driverless vehicles as they will definitely be a key feature in the future of transport. Beyond making cars autonomous, a key area that interests us at ALCAN is the on-board connectivity. For driverless journeys to reach their full potential there needs to be additional benefits for users. This is why onboard infotainment systems within driverless cars will be so important – there has to be a tangible benefit to the end user. Therefore, 5G has a huge role to play; delivering the connectivity that allows the complete benefits of driverless cars to be realised and it has to be able to achieve this in both an urban and rural environment.
September/October
One of the biggest announcements in autumn came from again from Verizon, at it announced a deal with Amazon to use low Earth orbit satellites to extend 4G and 5G to serve its customers in rural areas.
CEO viewpoint: Although it is not an immediate change as the Project Kuiper satellites will not launch until 2023, it points to the direction of the industry. Just like BT with its OneWeb partnership earlier in summer, it shows operators are conceding that in order to deliver on the connectivity everywhere promises, a different approach is needed for complete rural coverage and satellite is an option with potential.
November/December
November saw satellite operator Telesat complete a merger with Loral Space and Communications becoming a public company. When this was initially announced in 2020, Telesat CEO Dan Goldberg commented “If Telesat were to go public, and if Telesat were to issue equity as part of that process, certainly the proceeds of an offering could be used to invest in LEO”
CEO viewpoint: The Telesat/Loral merger is a positive note to end the year for the satellite industry. Firstly, it shows confidence in the vision for the future of satellite connectivity. In addition, it showcases a possible approach for satellite players to fund big capital expenditure projects, like Telesat’s Lightspeed LEO constellation. The company has stated that its new public status has enhanced its ability to execute on investment opportunities, and the combination of confidence and investment points to a fruitful 2022 for the industry.
It’s certainly been an eventful year for the telecoms and satellite industries and we anticipate 2022 will see many of the conversations on the convergence of satellite and telecoms start to be realised. However, that is it for 2021, apart from to wish a very happy holidays from the team at ALCAN