"The indoor market is hugely underserved in a very particular way"

TowerXchange speaks with Andy McKinnon, Chief Commercial Offer for next-generation wireless infrastructure-as-a-service company Ontix is redefining affordable indoor and outdoor networks.

Ontix is in its fourth year of operations in the UK, originally starting with an outdoor small cell solution. The basis of our business is somewhat like a towerco’s where we sign contracts with local authorities for the use of their street furniture, mainly lampposts. We have exclusivity for small cell deployments in the City of Westminster but do operate nationally across the UK as well.

We offer a standard outdoor model which works by partnering with MNOs and looking at what their coverage needs are, especially in 4G where they have a rooftop site that needs to be removed and require an alternative coverage solution. Small cells are becoming a popular alternative to this in urban environments.

Seeing the demand for alternative connectivity solutions we decided that our approach has been slightly different to the traditional model. By taking advantage of the UK’s JOTS model and the future needs of technology we created a virtualised Open-RAN that circuits to the operator networks from our data centres. We then deploy picocells at the site which significantly lowers cost.

The JOTS model involves three parties; the retailer, the neutral host and the MNO. Retailers we supply through wholesale agreements and are often IT companies who then rollout the inbuilding solutions , making it far more cost-effective than a traditional DAS model. All UK MNOs are in full support because it complies with JOTS. The key difference is in the process; MNOs will call up to request coverage in indoor cellular, particularly for voice, and we send in teams to survey and measure the environment.

Picocells are approximately the size of a Wi-Fi access point and run over ethernet cables and IP, with a simple technical design approved by the MNO and deployed by the IT company. This is then connected via a firewall to our data centre. IT companies traditionally avoided DAS because it’s too complicated, so we have simplified the market in an O-RAN type deployment.

Our Picocell network solution is very new and exploding in demand as the time to market is significantly lower than a standard DAS system. If you want a multi-operator indoor DAS in a typical building you can expect to be waiting 3 to 6 months just to order all the circuits and then a further 9 to 12 months in installation time.

The only delay that we face is the paperwork and approvals with the JOTS process as the picocell boxes are pre-provisioned, cutting our time-to-market down to as little as 30 days. We use the existing building internet connection where possible, and MNO circuits come already installed in our data centre, which is enabled by what we are doing with O-RAN architecture.

I see significantly less demand for 5G infrastructure solutions due to the overwhelming demand for indoor voice; this is the one business case that drives everything. VoLTE already provides the 4G bit, but 5G demands are only really coming from specialist environments and private networks in campus-type environments. The 5G world has been challenged by the availability of small cells which, despite seeing deployments over the last two years, have been very slow to be marketed by major vendors due to the focus on the macro 5G layer.

Our multi-operator RAN allows us to migrate potentially into neutral host outdoor small cells as well as indoor. 5G is a smaller market and doesn’t yet have volume, evidenced by the recent Small Cell Forum report showing that a peak of 38-39% of small cell deployments were 5G, meaning the market is still significantly weighted towards 4G.

Upgrading from 4G to 5G does require changing the picocell, but one of our vendors has a modular picocell solution so you only need to swap out the radios from 4G to 5G.

There is also a growing market demand for green credentials. A DAS system, which is traditionally a base station inside a building, requires a large amount of power consumption to run. Our radio point consumes around 40Kw, significantly less than a DAS system by anything between 800%-2500% depending on the type of installation, which is significant with today’s typical power costs.

If we take a 10-floor building with 60 radio locations, a typical DAS solution will cost approx. £167K per year in power. Ontix’s solution will cost approximately £15.5K per year – a substantial saving in OPEX (Based on a typical charge of 30p/KWh). New regulation is coming in for property developers around building energy efficiency which is remodelling companies to demonstrate their green credentials.

We work with a varied mix of customers from building owners, both commercial and residential, municipalities, enterprises as well as healthcare facilities. Most of the inbuilding solutions we deliver are through an IT services retailer who already have a working relationship with our customers, making life much easier. Why go direct when someone else is already providing all the cabling, switching and backhaul services that we would need? After all, we are a telecoms company and not an IT provider.

We manage the relationship with the MNO because we hold the service agreement with them. Through the JOTS system we act as a neutral host rather than our retailer. While we are responsible for the SLA as the owners and managers of the network, our retailers then do the installation on site and may also supply the switches and router.

Through this arrangement, we will bill the retailer which is then passed on as a cost to the landlord, because they are the one who has demand for the solution. Companies such as Wiredscore rank buildings and some of the larger developments are very aggressive in earning a top platinum rating of connectivity and will do almost anything to maintain it. MNOs may also buy the equipment themselves and ask us to install it. We have very healthy relationships with our IT companies by supporting each other's business.

We have done deployments in both residential and commercial buildings, although the residential side is always challenged by the price-point. DAS is great for multiple locations of low and high volume, but not great for the in-between. We hit this gap, but it depends on how much people are prepared to pay for it. High-end residential properties and high-value properties in London come with an expectation of having both Wi-Fi and cellular connectivity.

Assuming an office space of around 70-80 people, you would expect to deploy 4 picocells, or the same amount of wifi access points, as well as cabling going to an ethernet switch that connects to a standard commercial router, or firewall. That’s all you have on-site, so it’s fairly easy to install and deploy. This connects over the internet through an IP secure tunnel to our data centre on an O-RAN type deployment. As you can see, the list of billing goods is quite simplistic, and the router Ontix installs for security reasons is mandated by the operators that we represent.

All of the equipment is owned by us and provided as a service, but we trust our retailers to do the installation; we just fit the routers ourselves. In terms of costs, picocells are lower-cost items so it’s less relevant who owns them, we can easily transfer ownership over to the MNOs but it’s much easier for us to own everything and do the operations and maintenance in-house.

In the past landlords have acquired buildings and wanted to bring in a 4G network, but usually don’t fully understand demand for indoor connectivity. By simplifying the ownership and servicing of indoor solutions, we offer an easy package for whatever the building owner needs. DAS is where you face more complexity; there are definitely cases where a DAS system is the right solution but for an office space of 70 people it’s really overkill and we see the market swinging in a different direction, especially after the pandemic.

We’ve spoken to a lot of property owners in London and a common piece of feedback is their challenge in the shifting dynamics of enterprises shrinking their office space but demanding much better connectivity due to hot-desking. So landlords need inbuilding cellular, and now big property developers say it's critical to maintaining their competitiveness in the market. They recognise the fact that they need this done in a cost-effective manner, which is exactly where we fit in.

We have the rights to use all the street furniture in, for example Westminster which only required one permitting process with the municipality. But we do have to get strict works permission from the people who maintain all the infra to make sure our equipment meets their structural, power and appearance requirements. Permitting is all done through the local authority, but we already have the permit to do this. You may need to have a different permit to bring the fibre to each site.

It’s a complicated environment but we have a cookie-cutter solution and have deployed hundreds so far. All local authorities have a different way of looking at this so it can be complicated to navigate. All are also very competitive with each other. It’s more complicated if you are deploying on building because you are dealing with a different owner, so you would have to have different contracts per owner and wayleave agreements. We try to avoid buildings because of the complexity.

I don’t see a trend of consolidation around inbuilding, people don’t have an appetite for buying an existing environment and technology in traditional DAS, but the market is moving rapidly. Some vendor solutions need replacing, particularly Huawei, so why would anyone buy them only to replace them all?

The industry is going to move on from traditional DAS so it’s a new world of thinking about inbuilding deployments. It’s a much larger market than we anticipated, and we were shocked to discover the huge cellular inbuilding gap in key buildings in London because of the cost of installation.

Landlords need to be offered a more flexible and customized inbuilding solution, and this is going to be an awakening for the MNOs. During the pandemic the enterprise teams would sign large corporate SIM deals, but some of their employees didn’t even have good coverage in their homes, so enterprises didn’t see the point in renewing their contracts. Now the MNOs are facing the pressure of a shrinking enterprise market, so they need to bulk up their corporate packages to their customers, part of which could be inbuilding coverage.

That’s not to say all MNOs will offer this, many won’t due to the cost, but there is a big need to retain their corporate customers and a cost-effective solution with an ROI of around 2 years is ideal for them. This is facilitated by our retailers but we provide the offering and technical solution. The trend driving all of this is cost reduction and time to market, as some people lose an appetite if the solution takes too long to deploy.

Capacity needs are dependent on the market. Capacity can mean two things; volume or users or volume of data. Each picocell can support between 32-64 users, so it’s not a solution for high-density areas. This is where a DAS solution is ideal, but we are working with a particular vendor to make a DAS deployment O-RAN capable as well.

For much of the enterprise market picocells are sufficient, while in most large venues such as stadiums it’s DAS. Capacity is usually a limitation on spectrum rather than on the product in regard to bandwidth, so as long as the number of people remains constant the amount of data each person consumes won’t create a bottleneck for the network.