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These developments can help U.S.-based enterprise IT understand the business and technology of bringing 5G to offices and homes in Canada.

Canadian service providers Rogers, TELUS, Bell Canada, Videotron, and SaskTel, are rapidly deploying 5G networks to serve consumers and enterprises in a country with cities and vast rural expanses.

This may sound promising to IT managers at U.S. enterprises looking to establish or expand operations north of the border. But what must they consider in evaluating this opportunity?

Tough(er) sledding

Deploying 5G in Canada is far tougher than it is here in the U.S. And delayed 5G deployments threaten Canada’s global competitiveness. That is according to a report from PWC Canada.

The country's role has continued to grow since the North American Free Trade Agreement (NAFTA), signed into law in 1994, eliminated most tariffs between the trio of America, Canada, and Mexico and created a cross-continental trade bloc.

It is no surprise that the U.S. has become the largest goods importer in the world. U.S. goods imports from the world totaled $2.5 trillion in 2019 (pre-COVID 19), according to the Office of the United States Trade Representative. Canada, Mexico, and China are America’s three largest trading partners.

U.S.-based corporations such as automakers have moved the creation and assembly of products (and sourcing) north and south of America’s border to reduce labor and other costs.

PWC: Canada playing catch-up as size matters

In the digital economy, Canadian mobile network operators (MNOs) are negligible compared to their global peers and large multinational competitors, according to PWC Canada.

The three largest Canadian telcos generated, on average, approximately three and a half times less revenue than the leading telcos in the G7, South Korea and Australia. “Similarly, Canadian telcos are undersized compared to some of their main suppliers - significantly hampering their ability to negotiate better prices,” according to the global research firm’s report.

PWC Canada concludes that with the cost of delivering 5G forecast to be up to 71% higher than previous generations of connectivity, “the comparatively small scale of Canadian MNOs and their relatively higher network capital costs are likely to impact investments in the 5G connectivity required to enable the digital economy.”

Resulting acquisitions and big-ticket investments

Rogers acquires Shaw, accelerates 5G rollout

Plans to deploy 5G throughout multiple Canadian provinces came into focus in March as Rogers Communications announced and detailed plans to acquire rival Shaw Communications in a $26 billion transaction designed to accelerate the introduction of 5G in the country. The acquisition, which is expected to close in the first half of this year, will create the country's second-largest cellular and cable operator.

Western Canada is the target region for the introduction of the highest-speed wireless technology.

As part of the landmark acquisition, Rogers claimed it will invest $6.5 billion in Western Canada to build 5G networks, connect underserved rural areas and bring added choices to consumers and businesses. The innovative technology and network investments will create 3,000 net new jobs across Alberta, British Columbia, Manitoba, and Saskatchewan, Rogers added.

The deal has already received the necessary regulatory approval from the Canadian Radio-television and Telecommunications Commission (CRTC).

TELUS shows us

In addition to rolling out 5G in Canada, carrier TELUS is focusing on closing a digital divide in rural areas, which are more prevalent than in the U.S. For that tall task, the provider is employing fixed wireless access (FWA), which has taken something of a back seat to fiber in the U.S, to provide up to 100Mbit/sec Internet access to homes to power productivity.

In the U.S and far beyond, FWA is a quick-to-deploy and cheaper means than fiber to deliver broadband to remote offices and homes. TELUS provides its Smart Hub indoor CPE to complete the coveted high-speed connection over distances to un- and underserved areas.

TELUS has also spent heavily on fiber networking, investing $54 billion to connect 137 communities across B.C., Alberta, and parts of Quebec to its fast-expanding fiber-optic network.

In March, TELUS revealed a plan to bring broadband services to sixty communities spread across British Columbia and Alberta by yearend.

Bell Canada

Bell claimed it achieved its objective to offer 5G coverage for more than 70% of the Canadian population by the end of 2021. That included December turnups of Prince Edward Island with service in Charlottetown, Abram Village, Kensington, and Sherbrooke.

In early February, the carrier announced that 5G is now available in forty-two more communities in Ontario, Quebec, and Nova Scotia.

Videotron’s expansion plans

Videotron, a subsidiary of Quebecor Media, provides wired, wireless, and content services to businesses and consumers in Quebec. It has already rolled out 5G in Montreal and Quebec City.

The carrier is looking to offer services far beyond the boundaries of the province, having spent nearly $830 million in a wireless spectrum auction last July. The investment brought in 294 blocks of spectrum in the 3500 MHz band across the country.

More than half of the investment is concentrated in four Canadian provinces outside Quebec: southern and eastern Ontario, Manitoba, Alberta, and British Columbia. “The strategic investment positions Québec’s flagship carrier to realize its ambition of boosting healthy competition in telecom beyond the borders of Québec,” according to a press release.

Do not forget SaskTel

SaskTel provides wired and wireless services in the Canadian province of Saskatchewan. The carrier said it has been investing $95.9 million into wireless network enhancements, including $55 million on the initial rollout of 5G, in 2021-2022.

SaskTel says 5G is currently available in select locations. By the end of this year, 5G will cover approximately 50% of Saskatchewan's population, according to the company’s website.

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Carriers’ broadband deployment plans focus on fiber. But a growing number are also using FWA as well. What do IT managers need to know about the alternative to fiber as carrier decisions factor in your network expansion and enhancement plans?

Carriers’ broadband deployment plans focus on fiber. But a growing number are also using FWA as well. What do IT managers need to know about the alternative to fiber as carrier decisions factor in your network expansion and enhancement plans?

Why? While fiber can provide higher speeds, FWA is quicker to deploy, more reliable, and a cheaper means to provide high-speed Internet access in areas that lack broadband. In these scenarios, carriers cannot ROI-justify the time and cost of laying fiber or running it across phone poles to remote areas.

FWA is an increasingly attractive alternative to wired broadband Internet options at a time when carriers are looking to match the media with the population to ensure the service takes rates in their areas are sufficient to provide a profit and avoid a fiber bubble from overbuilding.

Broadband funding

The combined funding pool, which is approaching $100 billion, is fed by the FCC's Rural Digital Opportunity Fund (RDOF) and President Biden's $1.2 trillion Infrastructure Investment and Jobs Act (ARPA), which looks to bankroll the expansion of broadband throughout the nation.

Top considerations for IT managers

A sunny forecast. The economics and data rate performance of FWA are finally becoming competitive with that of wired internet services, according to Deloitte Global. The company predicts that the number of FWA connections will grow from about sixty million in 2020 to 88 million this year, with 5G FWA representing almost 7% of the total. “While our analysis reveals a 19% 2020–2026 CAGR in total FWA connections, 5G FWA connections will grow even faster, at a CAGR of almost 88%, over the same period,” wrote the authors of the Deloitte Insights report.

Deployment. If you are looking to quickly extend your corporate network to new locations such as small branch offices and remote workers in un or underserved areas such as rural regions, FWA is the answer since the radio frequency-based systems do not require digging, and the process carriers must go through for builds in municipalities. And do not forget winter weather in much of the U.S. as an impediment to digs for fiber.

FWA systems (typically point-to-multipoint) are above ground and can use different radio frequencies to deliver service to special CPE at the business or residence in an expedited manner.

Availability. With fiber, businesses risk service interruptions from cable cuts and damage from storms and car accidents to phone poles atop which the cables are often strung to speed rollouts, especially in rural areas. With carriers looking to use both media, compare SLAs for availability and other essential metrics such as mean time to repair.

Performance. In many cases, fiber systems can be upgraded to support higher speeds than FWA. But that does not mean the wireless option is not sufficient for the needs of potential network locations and WFH residences. FWA systems can support a wide range of speeds that exceed one hundred Mbps when supporting 5G technology.

A quickening ROI for carriers?

ROI-focused carriers are unlikely to use fiber to reach all unserved and underserved rural areas, opting for the quicker to deploy and less expensive FWA approach for home broadband.

Global carrier equipment maker Ericsson sees Fixed Wireless Access (FWA) as an efficient and scalable alternative to wired connections. "With smart and targeted deployments, our studies show that the investment typically pays off in less than two years." The vendor believes it can help its operator customers accelerate this in instances where 5G technology is used.

Over 75 percent of service providers now offer FWA. In October 2021, Ericsson, for the sixth time, updated its study of retail packages offered by service providers worldwide. Out of 312 service providers studied, 239 had an FWA offering, representing an average of 77 percent globally. Service providers’ adoption of FWA offerings has more than doubled in the last three years.

Looking ahead

How fixed wireless access is being offered: Ericsson survey says…Ericsson’s updated study of retail packages offered by service providers worldwide in October of last year provided important detail on how carriers structure FWA for their customers.

The majority (88 percent) of FWA offerings are best effort with a monthly volume tariff plan based on usage (GB/month), according to the survey. However, 12 percent of service providers respondents offer a QoS. Ericsson defines this as selling FWA services “with speed tiers, which it claims enables higher monetization, akin to how fiber-based broadband services are offered.”

Forty percent of these QoS offerings are basic, with average/typical speeds being advertised, the vendor added. "Some 60 percent are more advanced QoS offerings, involving speed tiers, such as 100Mbps, 300Mbps, and 500Mbps."

QoS in the U.S. Service providers with 5G fixed wireless access are more likely to have a QoS offering, with seventeen out of fifty-six utilizing this approach (30 percent), according to Ericsson global service provider survey. North America is the region with the highest adoption, with 40 percent of all offerings based on QoS.

fixed wireless access2

FWA CPE prices fall, choices expand. It appears 5G FWA deployments are being driven by lower costs CPE, something Dell’Oro Group identified over a year ago. The cost for indoor 5G FWA CPE is expected to drop from $475 in 2020 to $180 by the end of 2023.

“The global demand for broadband service has resulted in an acceleration of interest among fixed and mobile operators alike to either expand their existing LTE or point-to-multipoint fixed wireless access (FWA) offerings or roll out early 5G FWA services to a growing base of current and potential subscribers,” explained Jeff Heynen, Vice President, Broadband Access and Home Networking at Dell’Oro Group, a market research and analysis firm.

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From funding to the front door, IT managers can learn from state-level fiber expansions and benefit from programs created to speed high-speed Internet buildouts powered by federal legislation, the FCC, and annual carrier capital expenditures.

The knock on the door might not be a marketer asking you to sign up for solar panels. Instead, it may be a door-to-door salesperson pitching broadband Internet from a provider you may not have heard of.

AT&T and Google Fiber have confirmed that they are taking it to the streets in an aggressive effort to sell fiber-based products in newly entered areas and against entrenched incumbent telcos and cable companies.

The fiber forays will deliver high-speed Internet service to support work-from-home efforts, virtual education, telemedicine, streaming services, and gaming.

Funding fuels deployments

Why the full-court press? Flush with grants and funding from the American Rescue Plan, the Rural Development Opportunity Fund (RDOF), and Infrastructure Investment and Jobs Act, added to annual carrier CapEx spending, the broadband breakout is well underway.

Carriers large and small are aggressively upgrading and expanding their networks to offer faster services and to un- and underserved areas to take on cable incumbents such as cableco Charter, who are also adding fiber.

Fiber forecast and IT guidance

It is anticipated that annual spending on fiber upgrades and expansions will continue for at least five years before the broadband breakout slows. Enterprise IT managers need to be aware of new and emerging efforts embraced by states and carriers to drive fiber deployments.

IT manager prep

With many service providers of all types – new and old - having stated their plans and associated timelines, there is not much IT managers can do to influence the actual speed of fiber service rollouts. But by understanding emerging efforts to drive the use of funds for broadband deployment, they can get up to speed before they get new or faster broadband speeds.

“IT managers will want to do their homework and make sure to fully vet new providers to make sure they aren’t overextending themselves and also trying to boost take rates by offering SLA guarantees they can’t necessarily back up,” advises Jeff Heynen, Vice President, Broadband Access and Home Networking at Dell’Oro Group, a market research and analysis firm.

AT&T operational challenges

Speaking on an earnings call, AT&T CEO John Stankey said it takes a year from the time it begins engineering work in a new market to the time it can start selling fiber products there.

AT&T’s stated goal is to cut that timeframe down “substantially” so it can get its broadband products to consumers faster. The carrier lost 20,000 broadband customers in Q4 2021 as fiber net additions failed to offset DSL and non-fiber losses.

The type of things to come

AT&T plans to double its fiber footprint by 2025. That should help the telco in its ongoing rollout of gigabit services (including multi) and increasingly popular symmetrical services to better compete with cablecos (pushing DOCSIS 4.0) for all-size enterprise business and consumer connections. It will also drive support for an expanded 5G wireless network.

Supply chain challenges notwithstanding, the fiber network will cover four million small businesses and one million enterprise locations, and more than twenty-five million consumer locations with multi-gig performance, according to Jeff McElfresh, CEO of AT&T Communications. “Nationwide, more than 9.5 million business customer locations are within 1,000 feet of our fiber.” The carrier exec said that he believes AT&T has enough “weight” in the industry that it can work with vendors to overcome any supply chain delays.

Addressing the skills gap- Optical installers get smarter, faster

The Fiber Broadband Association (FBA) recently launched an Optical Telecom Installation Certification program to help scale the education of fiber technicians, with a pilot run that was set to start on March 29.

Fiber broadband experts designed the program to quickly scale fiber technician education to fill the existing fiber skills gap and accelerate fiber deployments across North America.

The FBA forecasts that more fiber will be deployed in the next five years than has been deployed in the past 20 years, but the need for skilled fiber optic technicians will significantly impact each state’s ability to deploy broadband. The FBA’s OpTIC program teaches the knowledge and skills required to properly install, test, and maintain high-speed fiber broadband networks.

"When we saw the need for an expanded fiber workforce in order to keep up with broadband demand and growth opportunities, we began development of this intensive training program to ensure that no state is left behind in the digital equity gap," said Deborah Kish, Vice President of Research and Workforce Development at the FBA.

The FBA is engaged with twenty-three states to roll out this fiber optic technician training program with their community college systems and fiber optic broadband service providers. Its stated goal is to reach all fifty states and U.S. territories by the end of the year.

Build, own and lease to ISPs - Michigan

One such option IT managers need to be aware of is for county utilities to use the funding to build new fiber and wireless networks, which they would own, and leaseback to ISPs to speed the introduction of broadband services throughout the county.

Michigan's Ottawa County is exploring this opportunity, having built cell towers for wireless services this way before and then leased them to companies to cover dead zones in the town. It was not economically feasible at the time for companies to build that infrastructure, and a similar situation has been playing out with internet infrastructure in sparsely populated rural areas of the county.

“It is not economically feasible to lay fiber to every home and business across the county,” said Douglas Weber, president of Urban Wireless Solutions, Ottawa County’s consultant on the initiative. “If it were, you would have seen all the major internet service providers doing so already. Furthermore, wireless technology has improved to the point where it is delivering internet speeds comparable to fiber and can be deployed in a more economically prudent manner.”

The statewide grant approach with rules - Tennessee

The State of Tennessee detailed in March a plan to spend $400 million in federal funds from the American Rescue Plan for carriers to deliver broadband services in the state. The entities can be solely broadband providers to Tennessee, or they can include nationwide coverage. Broadband infrastructure projects in Tennessee will prioritize "severely underserved" communities, which it defines as serving those that have coverage below 25/3 Mbps and 10/1 Mbps.

The Tennessee Department of Economic and Community Development (ECD) broadband providers had until mid-March 15 to submit applications for funding. Projects must be completed within three years. The additional funding from the ARP has allowed the state entity to waive its $2 million maximum request amount for grants.

Too fast and furious?

One aspect for IT managers to consider is that in a race to reach new areas and provide a competitive alternative to businesses and consumers, providers may overextend themselves financially.

Does the demand justify new fiber builds to attract customers’ whose collective spend does not cost-justify the rollouts?

“The key part of their analysis is that there is [plenty] of overbuilding going on right now. In other words, expansions into new areas to try to grab broadband subscribers away from incumbent providers,” explained Dell’Oro’s Heynen. “Operators are using the high valuations of their fiber networks to secure more funding to cover these expansion projects. Because of that, I do agree that traditional take rate assumptions might be a bit rosy.”

For the foreseeable future, service providers see fiber rollouts as an opportunity knocking loudly.