5G in Bulgaria – economic and technological challenges and national security implications

Yasen Guev

The development of mobile communications and the creation of wireless networks has led to the availability of devices with access to all the information for each of us. The applications on our mobile phones, tablets and cameras, public and private databases contain information about our health, financial status, habits, interests.

National security threats are increasing with the advent of fifth generation networks. Bulgaria does not pay much attention to the fact that some countries have banned Chinese telecommunication equipment suppliers from their market. US Secretary of State Mike Pompeo’s article on the topic was published in 24 Hours daily and Capital weekly.

https://www.24chasa.bg/mnenia/article/7942265

https://www.politico.eu/article/europe-must-put-security-first-with-5g-mike-pompeo-eu-us-china/

However, neither the Ministry of Transport, Information Technologies and Communications, nor political parties or mobile operators have commented on the topic.

Meanwhile in Romania

Romania’s president Klaus Iohannis has backed the government’s decision to postpone a 5G spectrum auction originally planned for late 2019.According to the President said it was not appropriate to stage an auction at the present time, as China’s Huawei is the only equipment supplier capable of implementing the network at present.

Romania have signed a security memorandum with the US the terms of which have not been disclosed. The Romanian authorities are also awaiting the release of a new set of security specifications being formulated by the European Commission.

Probably the Bulgarian government will wait for the EU guidance too.

https://www.commsupdate.com/articles/2020/01/03/romanias-president-supports-delay-in-5g-implementation/?utm_source=CommsUpdate&utm_campaign=a5a9b50e72-CommsUpdate+03+January+2020&utm_medium=email&utm_term=0_0688983330-a5a9b50e72-8832369

Frequencies

Currently, Bulgarian mobile operators use frequencies in the 900, 1 800 and 2 100 megahertz bands to operate second, third and fourth generation networks.

In recent years, operators have repeatedly discussed with the state the release of 800 megahertz band. This, however, is unlikely to happen anytime soon – only two bands of 10 megahertz are currently available, which is enough for two operators. The Ministry of Defense’s current policy shows that Russian MIG-28 aircrafts will continue to be used for many years to come, despite the upcoming purchase of American F-16s. The Russian aircrafts use the 800 megahertz band.

The state and the operators have found another option that solves the problem of the development of fifth generation networks. Bulgarian Air Traffic Service Authority (BULATSA) is in the process of releasing the 3 500 megahertz band and the state has committed to release frequencies in the 700 megahertz range.

All major mobile operators allover the world are building their fifth generation networks at both low and high frequencies.

The reason for this is that the low frequency gives great coverage but can support a relatively small number of active users. Another plus is the ability of the signal to cross walls and provide coverage in residential and commercial buildings.

When used at high frequency, the 5G signal can be stopped not only from the walls of buildings, but even from the leaves of trees. High frequency is used to achieve coverage in densely populated urban areas with large numbers of users.

The investment

According to various publications, the cost of building a fifth generation network is 3-5 times higher than that of a fourth generation. The Communications Regulation Commission has asked the three mobile operators and their preliminary estimate is for a total investment of nearly BGN 800 million (around 400 million euro), which includes the cost of network equipment and the payment of new frequency spectrum.

Българските телекоми планират 5G инвестиции за 800 млн. лева

These estimates are preliminary and depend on many things. Vivacom is in the best position to build a good network. In cities, each base station will need to be connected to a large number of antennas, which will require the use of a fiber optic network. A1 also has a fixed network, but its coverage is less than that of Vivacom. And A1’s fixed network is, for the most part, placed on the Vivacom ducts.

The most expensive will be the construction of the new network for the mobile operator of the Czech billionaire Peter Kellner.The company will have to rent fiber, which will increase the cost. It is possible that some operators decide to share their costs by building a shared network. This will require the approval of such an initiative by the Commission for Protection of Competition.

Selection of equipment suppliers

The Bulgarian government still has no position on whether to allow the use of Chinese companies as suppliers of equipment for fifth-generation networks. This will not be a problem for A1 because the company uses Nokia. Huawei, however, are the main suppliers of Vivacom and Telenor.

Next year, Vivacom will have a new owner – United Group, whose main shareholder is BC Partners listed in the UK. The British government has decided that Chinese companies will supply equipment for the radio part of the network (RAN), but not for the Core network. This is also likely to be the approach of the new owner of Vivacom.

Peter Kellner will obviously do his best to use Chinese suppliers. His consumer loan company Home Credit has a huge business in China that depends entirely on the local authorities. The purchase of fifth-generation network equipment from Chinese suppliers for the operators in the Czech Republic, Slovakia, Hungary, Serbia, Montenegro and Bulgaria will be something that the Chinese state will like a lot.

Is there a return on investment in 5G

The short answer is- it depends. Returns will come in countries with highly developed economies, where society can afford to invest in connectivity, new devices, powerful data centers and software solutions.

Such countries are the USA, China, Japan and South Korea. Wealthy countries from the EU, Canada and Australia also join this group with little delay.

The fourth generation networks have solved the problem of watching video – in Bulgaria you can watch TV or movies from many platforms such as Voyo (bTV owned), Diema Extra (owned by Nova TV), Netflix, Apple TV and HBO GO. Mobile operators also offer free traffic to some of these platforms as part of their mobile offerings.

Instead of talking about the different services that use fifth generation networks, I decided to put in videos with specific examples, as well as a few articles. The logical question is whether in Bulgaria will soon be used solutions for smart home, smart office, automated production and transmission of live events with three-dimensional images?

The answer is that the vast majority of businesses and the population will never use such services. They will gradually occur in our daily lives, but will not justify the huge investment in fifth generation networks. Bulgarian operators will be able to generate revenue from foreigners who visit our country and decide to use fifth generation networks during their stay in Bulgaria.

It is difficult to predict whether the need for large investments will not lead to higher monthly subscription fees. In some countries this happens, but in other smaller operators keep their current rates and try to steal subscribers from market leaders. This is the case with US operator T-Mobile, which recently launched a fifth-generation network on 600 megahertz without raising prices.

Even if subscriptions do not rise, operators will have to cover the cost investments through higher prices for phones, tablets and any other end devices and related services.

Conclusion

Today many of the devices and applications based on 5G networks make no sense. However, so have many other technologies that are already part of our daily lives. Many economic analysts predict that 5G Networks will drive investment, employment and Gross Domestic Product growth.

In order to take advantage of this, the Bulgarian state and business need an economic transformation plan. New technologies suggest a population with growing incomes and opportunities to use high-tech devices and applications.

The issue of network security is not limited to them, but also includes databases and terminals of all major state institutions and of private structures such as banks, insurance companies, power plants, electricity networks, district heating, water supply and many others.

Our country must conduct a review of all networks, servers and end devices to reduce the risk of attacks similar to the one against the National Revenue Agency (NRA).

The challenge for Bulgaria is extremely serious, and while we are struggling to understand the 5G challenge, several universities and development centers are already working on the standard for sixth generation networks…

https://www.cnbc.com/2019/11/07/china-starts-6g-development-having-just-turned-on-its-5g-mobile-network.html

Examples

Verizon and Sony demonstrate how 5G stands to transform live sports production

Verizon and Sony demonstrate how 5G stands to transform live sports production

Verizon and AWS team up to deliver 5G edge cloud computing

Verizon and AWS team up to deliver 5G edge cloud computing

Verizon and The Chainsmokers create first 5G-powered concert at Chase Center show

Verizon and The Chainsmokers create first 5G-powered concert at Chase Center show

5G real talk – How will 5G change the future of live events?

Inside the first 5G concert

We’re Bringing 5G to Life | AT&T

The Connected Car | AT&T

Connecting Our Lives Through 5G | AT&T

AT&T and Samsung Explore 5G Possibilities in Manufacturing

Sprint and Nokia launch 5G in New York, LA, Washington DC and Phoenix
https://www.youtube.com/watch?v=Hqiz0EwP6W8

KT 5G

KT 5G

SK Telecom Uses 5G AR to Bring Fire-Breathing Dragon to Baseball Park

Introducing SK Telecom’s 5G Smart Office

China: facial recognition and state control | The Economist

Drones, facial recognition and a social credit system: 10 ways China watches its citizens

https://www.scmp.com/news/china/society/article/2157883/drones-facial-recognition-and-social-credit-system-10-ways-china

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