Connecting rural and regional Australia - Huawei Australia Hub

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Information Classification: General

Publication date: December 2020 Author: Stephen Myers, Principal Analyst

Connecting rural and regional Australia

Connecting rural and regional Australia 01

© 2020 Omdia. All rights reserved. Unauthorized reproduction prohibited.

Contents Summary 3

The new possibilities 5

The journey ahead 8

Delivering in the real world 10

Enabling rural Australia 13

Conclusion 15

Appendix 16

This report was commissioned by Huawei Australia in partnership with the Telecommunications Association [TelSoc] a not-for-profit society registered as an incorporated association. It is the Australian telecommunication industry’s oldest learned society. TelSoc organizes public forums, provides a daily newsletter to members on industry news, and publishes the prestigious Journal of Telecommunications and the Digital Economy.

TelSoc's mission is to provide a focus for Australian Telecommunications in the following areas:

The dissemination of new information, to encourage productive debate, a platform to illuminate what the future holds, stress the importance of excellence in Telecommunications, to provide professional networking between people in all roles in the Telecommunications Community, to enable lifelong learning in Telecommunications for all related professionals

For more information on TelSoc please visit telsoc.org

https://telsoc.org/history

https://telsoc.org/events

https://telsoc.org/news

https://telsoc.org/journal/about

https://telsoc.org/journal/about



Summary

Earlier this year the House of Representatives Standing Committee on Communications and the Arts undertook an inquiry into the deployment, adoption and application of next-generation mobile broadband 5G technology in Australia. Although the delivery of the National Broadband Network has lifted broadband speeds for most people in the country the arrival of 5G gives another avenue for high-speed broadband for those unable to get high-speed broadband via the NBN – especially in connecting rural and regional Australia.

In addition, 5G will also offer access to new applications thanks to the low latency that it delivers and additional capacity available compared to 3G and 4G technologies.

In its March 2020 report the House of Representatives Standing Committee on Communications and the Arts noted:

“The Committee sees great value in the deployment of 5G technology in rural and regional Australia, and is excited by the use cases presented by the agricultural sector. The Committee is concerned, however, that 5G will not be rolled out to regional areas until urban areas have been fully serviced. Other jurisdictions are successfully sharing mobile infrastructure between users to ensure adequate coverage in regional areas, and the Committee would encourage the adoption of this model.”1

In its recommendations it called for “carriers consider multiuser infrastructure sharing to ensure that rural and regional consumers benefit from 5G services in a timely manner, and ensure adequate coverage across all 5G spectrum bands.”

In Australia the arrival of 5G technology has the ability to help rural and regional communities to really improve productivity and competitiveness – especially in the primary industries sector – by allowing businesses to deliver next-generation applications such as smart-farming.

In more advanced markets where 5G has already been deployed we are already seeing the arrival of remote-controlled equipment, autonomous machinery and precision farming solutions that leverage 5G connectivity – with much more to come.

However, whilst farmers in Switzerland may be using 5G to monitor their dairy herds these farms are typically only located a couple of hours from Zurich by road – by contrast primary producers in agriculture and mining in Australia can often be hundreds of kilometers from the nearest town.

1https://www.aph.gov.au/Parliamentary_Business/Committees/House/Communications/5G/Report/section?id=committees%2Freportrep%2F024373%2F28187



That being the case for these solutions to become practical in Australia, 5G network coverage and capacity needs to be supported and expanded or those regional and rural industries in agriculture and resources will not get the connectivity that they need to be more productive.

5G stands as the next challenge for promoting parity of services in rural and regional Australia, a challenge requiring support of government and greater coordination across the telecommunications industry.



The new possibilities Next-generation mobile broadband in the form of 5G extends wireless service capabilities in three important ways.

• Increased capacity and speeds – Enhance mobile broadband (eMBB) capabilities will allow the speed available to the user to be increased ten-fold, with base stations able to support 10Gbps.

• Connectivity for huge numbers of devices - Massive Machine Type Communication (mMTC) capabilities will look to support one million low-power devices per square kilometer.

• Ultra-reliable connectivity - Critical Machine Type Communications (cMTC), often also referred to as ultra-reliable low latency communications (URLLC) promises 1 millisecond latency, compared to 50ms for LTE.

Figure 1: Enhanced capabilities of 5G (preliminary graphic)

Source: Omdia



These 5G features, in combination with other technologies, will enable a wide array of new products and services. Beyond the opportunity to access voice and internet access in town and at the homestead, for rural communities 5G opens opportunities to:

• Deploy massive arrays of sensors to track livestock, crop, soil and weather conditions.

• Operate remote-controlled machinery, reliant on high throughput and low latency.

• Access advanced analytics solutions, particularly real-time artificial intelligence applications.

This will all be directed at improving productivity.

We are already seeing real-world examples of the solutions under development around the world including:

• Remote controlled machinery – Valtra and Finnish 5G network operator Elisa have developed and demonstrated a remote-controlled tractor that uses a roof mounted 360-degree camera to allow a driver wearing a virtual reality headset to receive a high-definition (4K) view of the surroundings. The low latency of the network ensures that immediate feedback from the controls translates into safe and accurate operation.

• Autonomous machinery – a range of applications for autonomous machinery are emerging but it is the where the combination of robotics and AI need quality bandwidth that 5G is needed. John Deere has invested in AI (having purchased Blue River Technology in 2017) and has developed “See and Spray”, a solution that uses AI to identify weeds and targeted application of herbicides. Blue River promises up to 90% reduction in pesticide volumes while also reducing application of herbicides to crops. Integration of drone technology could further increase the scope for this type of solution beyond the crop paddock.

John Deere’s belief in the need for wireless connectivity has extended to acquisition of spectrum in the US CBRS spectrum auction. John Deere acquired licenses in five counties at the cost of US$0.55m (A$0.75m).

• Precision farming – technology can now enable observation and management of crops and livestock at a highly localized level. Sensor arrays can allow differences in conditions within a field to be tracked, or individual stock health monitored, allowing timely intervention to optimize these conditions. This data can be used to more closely manage the application of resources (water, fertilizer, herbicides, etc.). 5G’s ability to connect huge numbers of sensors combined with data analysis, GPS and robotic controls are bringing the industry closer to precision, hands-free farming.

As these applications transition from trials to commercial solutions demand will growth. Omdia forecasts that worldwide shipments of agricultural robots will grow at an average annual rate of 30% to nearly 370,000 units in 2026. Global agricultural robots revenue is expected to grow from US$9.5bn in 2019 to US$99.6bn in 2026 at a CAGR of 40.0%.



Omdia has tracked a number of other international initiatives focused at developing 5G solutions for the agriculture sector.

• Swiss network operator Sunrise teamed up with Huawei and Agroscope to develop opportunities to use 5G and Internet of Things (IoT) solutions in the development of smart farms.

• Telecom Italia (TIM Brasil) established a smart agriculture initiative, ConectarAGRO, that seeks to bring connectivity, automation and intelligence to 93 per cent of Brazilian farmers, with six industrial partners: United Kingdom-based manufacturer CNH Industrial, United States agricultural equipment maker AGCO, German pharmaceutical company Bayer, Brazilian precision agriculture equipment firm Máquinas Agrícolas Jacto, Brazilian agri-tech provider Solinftec, and United States industrial mapping provider Trimble. TIM Brasil will deploy 4G and 5G infrastructure, plus satellite, to provide IoT, broadband, and precision farming support.

• Telenor Norway has run trials to use 5G connectivity to support AI analysis of salmon in fish farms. At a commercial production site on the Mid-Norway Atlantic coast, operated by Sinkaberg-Hansen AS, SEALAB and Telenor are trialing several user cases related to remote monitoring of water and fish quality.



The journey ahead Although 5G deployment in Australia remains in its comparatively early stages preparations for the initial rollout of 5G in Australia started way back in 2016. Operators mindful of the need to efficiently upgrade their networks began planning for 5G and ensuring existing sites would be 5G ready when vendor solutions were commercialized.

The key facilitators for the launch of 5G services are spectrum availability, 5G enabled devices, 5G network equipment and applications (software that brings together 5G connectivity with hardware and user requirements).

Spectrum Of all the components needed to make sure that 5G delivers on its promise of greater speeds and capacity, spectrum is by far the most important. 5G radio technology itself does provide faster speeds than 4G by operating more efficiently but the real gains are to be made in the new spectrum bands in which 5G will operate.

International efforts, led by the European Union, to align the use of spectrum bands for 5G use have seen three bands come to the fore.

• Low band – 700 MHz

• Mid-band – 3.5 GHz

• High-band – 26 GHz

Each band has its own unique propagation properties. In general terms, as the frequency increases the radio signal’s susceptibility to attenuation increases resulting in a weaker signal over distance and reduced ability to penetrate objects. Prior to the arrival of 5G most mobile networks use frequency bands between 700 MHz and 2600 MHz. These frequencies provide good coverage and in-building penetration which is the key to ensuring voice calling could be reliably offered.

In many markets, including Australia, the initial spectrum allocated to 5G was in the 3.5 GHz band. This band, previously used for satellite services, was selected as large frequency ranges could be allocated, was relatively easy to clear for use by mobile operators and is suitable for massive MIMO2. In some markets there is scope for wireless operators to be allocated spectrum between 3400 MHz and 3800MHz, giving individual operator’s access to 100 MHz of spectrum.

2 Massive Multiple-In, Multiple-Out technology groups together a large number of antennas allowing multiple signal paths to be maintained between the base station and the end-user, increasing the transmission capacity.



The 3.6 GHz band spectrum auction in Australia was conducted by the ACMA in November and December 2018. Through this auction 125 MHz of spectrum was awarded to Telstra, Optus and TPG (Vodafone), with Telstra securing between 50 and 80 MHz in regional areas. This initial allocation fell short of the recommended allocation of 100 MHz per operator needed to benefit from the full scope of 5G capabilities.

The ACMA is in the process of reconfiguring spectrum in the 850 and 900 MHz bands for 5G use. The mobile operators have existing spectrum licenses giving access to 2 x 45 MHz, and this is currently used to provide 3G and 4G services. The ACMA is has commenced the process for a further 2 x 15 MHz to be made available, with this exercise to be completed in 2021. The government has also proposed the reallocation of around 84MHz of 600MHz spectrum for 5G use should the commercial broadcasters surrender the spectrum in exchange for media reforms. Telstra is expected to be first with low band coverage, with many sites on the ATMA’s Radio Frequency National Site Archive (RFNSA) indicating NR850 has been implemented, although Telstra is yet to announce it has turned on 5G in the 850 MHz or updated its coverage maps. This rollout will share spectrum with existing 3G services until they are completely shut down by June 2024, adding coverage but providing much less capacity than at 3.5 GHz.

The other spectrum being readied for 5G use is in the 26 GHz band (25.1GHz to 27.5GHz). This spectrum will be auctioned in early 2021 and will support very fast connectivity over relatively short ranges. Services using similar spectrum deployed in other markets support speeds over 1 Gbps with a range of around 500 meters. Testing in Australia has demonstrated signal ranges of 3.8km, but the susceptibility of the signals in these frequency bands to be blocked by trees and buildings suggests that deployments will be focused on locations where density drives demand for capacity (stadiums, transport hubs, etc.).

Network Equipment and Devices At the time of the first commercial 5G launches in Korea and the US, 5G devices were limited to a small selection of expensive handsets. The range of handsets has improved, and prices have begun to come down but 5G handsets remain a premium product. Vendors have fixed wireless access modems in the market, facilitating 5G home broadband services to become a reality.

With the inclusion of IoT capabilities in the delayed second phase of 5G standards (Rel-16), only finalized in July 2020, the scope for scaling up development of sensors and controllers using 5G has been limited. 5G modules for high-end applications such as ultrareliable low-latency communications (URLLC), have just arrived in the market. Omdia has predicted that global shipments of 5G IoT devices (eMMB, URLLC, massive IoT) will not exceed one million units until 2022.

Integration of the 4G LTE IoT standards (NB-IoT and Cat-M1) into 5G allow existing M2M devices to be supported, although without the capacity to support the massive density of connections (4G LPWA supports 60,680 devices per square kilometer compared the 5G target of one million devices per square kilometer).



Delivering in the real world The initial rollout has used 3500 MHz spectrum and concentrated on areas with higher population densities. This has delivered patchy rather than contiguous coverage. Further investment will also need to be directed to improving in-building coverage before customers begin to experience a service that is predominantly 5G, rather than relying on 4G most of the time.

Telstra launched it 5G mobile service on May 22, 2019, followed by Optus with 5G home broadband in November. In October announced its 2000th live 5G site, with coverage in over 1400 suburbs. This sees over 40% of Australians have access to 5G in the course of their average day, although this may include commutes passing through central transport hubs such as near CBD train stations. Optus coverage is largely limited to the state capitals, Canberra, the NSW central coast and Newcastle, and the Gold Coast.

Based on data from the ACMA’s Register of Radiocommunications Licenses Omdia estimates that 50% of Telstra’s active and current planned 5G sites are located outside Australia’s top twenty main population centers (population of 100,000 or more). About half of the 5G sites are spread across the remaining 1,800 towns

The initial rollout has used 3500 MHz spectrum and concentrated on areas with higher population densities. This has delivered patchy rather than contiguous coverage.

Expansion of coverage will arrive as service providers add low-band spectrum to their 5G service. The ACMA is yet to allocate new low-band spectrum for 5G purposes, having cleared and auctioned the 700 MHz, “digital dividend”, spectrum in 2013 and 2017. This spectrum is currently being used for 4G services. The mobile operators have licenses for spectrum in the 800 MHz and 900 MHz bands used for 3G and 4G services. The ACMA is intending to reconfigure these bands to optimize it for 4G and 5G use in 2021. Using Dynamic Spectrum Sharing3 service providers will be able access some of this low-band spectrum for 5G purposes, but this will only provide a relatively thin layer of coverage and not the step change in capacity promised by 5G.

Optus has taken one step in this direction, enabling their 5G network to also use 2300 MHz spectrum to improve coverage and penetration into buildings. This spectrum is currently also used for Optus’ “4G Plus” service. As noted above Telstra is in the process of enabling 5G services in the 850 MHz band alongside its 3G service.

For rural communities this means 5G coverage will be restricted to population centers Review of the current coverage maps published by Telstra and Optus suggest coverage extends from as little as two kilometers from the cell site or tower, up to nine kilometers more ideal conditions.

3 Dynamic Spectrum Sharing allows spectrum within a band to be shared between 4G and 5G services. As traffic from 5G devices increases and decreases, the network would progressively increases or decrease 5G’s share of the available frequencies.



This may be a conservative presentation if beamforming (a technique where a signal can be focused towards a specific location or device) is used to extend 5G range. This coverage is for outdoor usage, with penetration of the wireless signal into buildings likely to be poor.

At 2km radial coverage (and assuming minimum interruption of coverage due to terrain or buildings), a 5G site will offer only about 10% of the coverage achieved by new 4G sites4. In regional areas this will mean coverage extending to the edge of town, rather than blanketing the surrounding countryside and along major highways.

Figure 2: Illustrative 5G networks coverage under good conditions

Source: Approximation based on Telstra 5G coverage map

Telstra’s mobile network, the largest in Australia, has about eight thousand base stations providing coverage of more than 2.5 million square kilometers. Telstra’s 4G service has a range of up to 100km, with recent testing with their supplier supporting calling over a distance of 200km. To replicate this coverage with a network using 3500MHz spectrum, even with a highly optimized deployment, would require a great many more sites. The result of these coverage limitations is many smaller communities, particularly where existing coverage is a result of a base station in a

4 4G coverage based on coverage delivered by Phase I of the Regional Blackspots scheme as reported in the Australian National Audit Office review, September 2016.



neighboring town, will not benefit from the initial 5G deployment. Homesteads, stations and farms outside of town are also unlikely to benefit from coverage.

Coverage using low-band spectrum, particularly where DSS is used, will not feature the same increase in capacity. DSS enables 5G features but will not deliver the ten-fold increase in speeds promised by 5G. Instead there will be a tradeoff – some limited 5G capacity delivered by sacrificing existing 4G capacity.

A step change in capacity, only if you have coverage 5G promises a tenfold increase in user speeds, part through improved spectral efficiency but also through access to much larger spectrum allocations. The targets set for the initial 5G spectrum allocations were 100MHz per operators in the 3.5GHz band and 1Ghz in the mmWave bands. This compares to Australia’s operators pre-5G holdings totaling under 700MHz (or on average under 200MHz per operator excluding NBN).

The more limited holdings in mid-band spectrum will not deliver all the throughput promised by 5G until additional spectrum can be found. Addition of low-band spectrum in the short-term through the use of DSS will benefit coverage but is unlikely to provide a measurable boost to speed as operators look to maintain performance of their 3G and 4G networks.

Outside the 3500 MHz coverage, if 5G is available it is unlikely to offer speeds that are meaningfully better than 4G.



Delivering for rural Australia "We want to make sure that every ear of corn and stalk of soybean has the opportunity to succeed… We can't stop short of just connecting rural communities. We are pushing to boldly cover the land, not just the people."

Dan Leibfried, director of advanced technology at John Deere's Intelligent Solutions Group

The highly competitive international agriculture market demands continued improvements in productivity, as does the appetite of the growing global population. With little scope of expanding Australia’s productive farming land, improvements in yield and productivity are the only sources of growth. Technology, including 5G, are the future drivers of these improvements.

Coverage remains the greatest barrier facing the rural sector as it looks to take advantage of the potential benefits of 5G. Like each generation of wireless technology before it, it will take time for 5G to reach rural communities, and longer for arable lands to gain access. And when access becomes available, this needs to include both low-band coverage, but also the real incremental capacity that comes with mid-band deployments.

To accelerate the availability of 5G access in rural areas and so limit the lack of parity with urban areas, action on several fronts is needed.

• Reduction in costs of network hardware and devices. Driving down the cost of 5G equipment will only occur if competition is enhanced or operators can ensure higher volumes.

• Reductions in deployment cost through:

– Facilitating access to appropriate sites for 5G antennas. Site access is a challenge in any network deployment. In the first instance 5G will be deployed from existing sites and then extended. Access to utility infrastructure (for example light and power poles) will be beneficial, although regulatory intervention would be needed to further facilitate this.

– Ensuring appropriate low-cost spectrum is available. There is limited additional spectrum that the ACMA can make available for 5G services, especially in low band frequencies. Ensuring auction prices are not inflated and payment profiles are extended over the life of the license will allow operators to invest more on extending coverage.

– Promoting sharing of investment by network operators, including the NBN. Sharing of towers, equipment sheds, power supply, construction and maintenance can all lower deployment costs and speed up rollouts. Competition based on coverage limits the appeal of sharing arrangements with operators, but where government funding is involved (blackspots) this could become a prerequisite.

• Government programs and initiatives supporting rural focused coverage:



– Extension of the Government’s Blackspots program to promote 5G coverage in new sites and the addition of 5G to existing 4G sites.

– Promotion of easy access to local, state and federal government infrastructure.

– Support of application development that drives demand for 5G connectivity in regional areas such as smart farming applications.

The Australian Government has a number of current programs that could be extended to support the expansion of 5G in regional areas.

• $22.1 million to establish the Australian 5G Innovation Initiative, investing in 5G commercial trials and testbeds in key industry sectors such as agriculture, mining, logistics and manufacturing;

• Regional Connectivity Program will provide up to A$83 million for telecommunications infrastructure projects which maximize economic and social opportunities in regional, rural and remote Australian communities;

• Mobile Black Spot Program will allocate $160 million for two additional rounds (Rounds 5 & 6) of this long-running program. Round 5 outcomes were announced on 21 April 2020, and Round 6 is to follow in late 2020 or early 2021.



Conclusion 5G has the potential to facilitate new solution for businesses in regional areas, becoming a platform for innovative solutions and increased productivity. In other markets 5G is already been deployed to support remote-controlled equipment, autonomous machinery and precision farming solutions, and there is only the beginning.

Australia’s vast distances make releasing the huge gains in wireless capacity from 5G a challenge, but the additional benefits of low latency, high reliability and connectivity for hundreds of sensors/devices still offer great value.

5G stands as the next challenge for promoting parity of services in rural and regional Australia, a challenge requiring support of government and greater coordination across the telecommunications industry.

rural and regional Australia 16


Appendix

Methodology Insights contained in this report are based on data and industry intelligence collected from various sources including Omdia proprietary research, media coverage, service provider and government sources.

Stephen Myers Principal Analyst, Service Provider and Regulation



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Connecting rural and regional Australia - Huawei Australia Hub

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