Millicom is embarking on a $135 million network upgrade in Latin America, tapping Ericsson for 5G-ready gear as the operator embraces a market-by-market vendor strategy and expands 4G coverage.
It represents a slight shift in radio supplier strategy, according to Millicom CTIO Xavier Rocoplan, compared to the previous hybrid of dual vendors. Now Ericsson is the sole radio access network (RAN) supplier for upgrades and expansion in Bolivia, Honduras, and Paraguay.
“It makes things easier at a market level, at a country level, that seems to be the recipe for us,” Rocoplan said in an interview with Fierce. “That way you have scale by market directly. So these markets are going 100% to Ericsson now.”
In addition to RAN gear, Ericsson is replacing Tigo’s current 4G packet core with a dual-mode 5G Core.
Millicom offers fixed cable and mobile broadband services through its main brand Tigo. Around 95% of its business is in Latin America, where Millicom ended the first quarter with 42.8 million mobile customers. In Africa it counts about 13.5 million mobile subscribers.
Adding tricks from the 4G playbook
While much attention is paid to 5G, increasing 4G adoption is still the primary focus in areas Millcom serves, with Voice over LTE (VoLTE) also very much on the agenda over the next two years.
Ericsson also is helping transition to IMS for VoLTE so users don’t have to stay on 3G for voice.
At the end of Q1, 4G users accounted for around 18.8 million of the operator’s 42.8 million Latin America mobile customers – an increase of 26.6% year over year.
With 4G comes more data, and handling increased traffic is one of the main reasons for the upgrade with Ericsson. Utilizing the Ericsson radio portfolio, Rocoplan said Millicom now gets to play with capabilities in the latest 4G evolution, such as MIMO and carrier aggregation, to become more efficient and make the most out of spectrum resources.
“Organically our traffic is increasing like 40-50% per year, so it’s very natural for us to top off the existing footprint with extra capacity,” he said, with 4G driving the usage as 3G traffic is pretty stable.
Spectrum availability varies slightly by market, but typically Millicom is using a combination of lower bands such as 700 MHz and 850 MHz, as well as and 1900 MHz where available, with carrier aggregation.
Another aim is pushing coverage to reach more people. Ericsson is helping the operator to cover 2.5 million additional people across the three markets, with 712 more municipalities
“Both from procurement and project standpoint, it’s more efficient to do capacity and coverage increments at the same time,” Rocoplan said, noting some older gear gets redeployed in more remote locations while more dense or critical areas are upgraded with new features.
And taking the lead on coverage is one of Millicom’s key ambitions. As of March, Tigo 4G networks covered approximately 77% of the population or about 120 million people in its Latin American markets.
In Paraguay, for example, the operator is aiming to match its 2G footprint with 4G. Its similar for 2G and 3G footprint in other markets, he added, with new 4G sites added to complement and densify.
Millicom also wants to get more customers to get onto 4G so it can decommission older technologies like 2G and 3G (hopefully within three years), and to modernize the network.
“Every roughly seven years you have to tackle that, and the great news is that this time we’re bringing the latest platform from Ericsson and essentially it’s a 5G platform that we put directly in the sites,” he said. All of the equipment is 5G-ready, but that’s not on the current agenda for the operator.
“We’re still in the 4G adoption game,” Rocoplan noted, which Millicom sees it as a great opportunity, though he acknowledged constraints with 4G handset penetration.
The operator wants to bring new technology changes to its markets and in Colombia, Millicom is deploying open RAN for 4G with partner Parallel Wireless as part of an early initiative.
Rocoplan was enthusiastic in Millicom’s support and interest in pushing the O-RAN standard. Initially it’s not necessarily for the economics, according to the technology chief, who said the idea of virtualized software for the access side is a very important and promising platform conceptually.
“The nature of the technology change is what we’re after here,” he said, adding it doesn’t mean the carrier is unhappy with partners it’s had historically.
O-RAN is bringing newer entrants into the RAN fold, while traditional players like Nokia have gotten on board for gear that complies with open interfaces defined by the O-RAN Alliance. Suppliers like Samsung and Ericsson have respective vRAN and cloud RAN 5G platforms.
As to whether Millicom would consider virtualization that isn’t O-RAN-compliant – he said the jury is still out.
“Virtualizing for the sake of it, that’s not our mantra. We’d really love to understand the why behind the technology change,” Rocoplan said. “At this stage it's about getting the knowledge and skills from within.”
From sourcing to operations, there is a reskilling of the organization as well that will be happening, he noted, referring to a process that can bring clarity around the “why” for O-RAN “if it’s economics, or capabilities, or specific use cases we’re willing to address.”
And O-RAN in some markets doesn’t mean cutting Ericsson out, he said, emphasizing that Millicom is focused on having a few solid partnerships for the long term.
“We don’t want too many partnerships, we want the right partnerships, but we don’t want only one,” Rocoplan said, adding it’s worked well for the company historically. “We’ve always been able to bring the latest technology in the more appropriate commercial conditions in the market where we operate, and it’s not an easy equation.”