Train and track talk without human interference. Wayside equipment recognizes the movement and the speed of a train. We would need to succeed in aligning everybody on one single standard. We need to be coaches in the corner. Those of us in aviation. Our aerospace industry is strong, is resilient. Some of the fastest-growing segments with the USM will be expensive to overhaul parts such as.. We're looking at domestic markets recovering faster. For aerospace defense companies to view this as an opportunity to build.
Kristina Gerteiser
Hello, everyone, and welcome back to the Velocity Podcast brought to you by management consulting firm, Oliver Wyman. I am Kristina Gerteiser, a transportation expert and partner based in Munich. And today I'm joined by Philip Deibert from Frankfurt, a partner in Oliver Wyman’s telecommunications practice and an expert in 5G. Welcome Philip, how are you doing today?
Philip Deibert
Yeah, doing well, thank you and delighted to be on the show today. I’m looking forward to the discussion.
Kristina
Thank you, Philip. This episode will focus on the impact of 5G. We will deliberate how the 5G network will affect and transform the rail industry. What does that mean for the rail operators but also for the passengers, how do mobile network operators support the launch of 5G networks and where may opportunities for collaboration set. Philip, over to you, would you be able to share an overview of the 5G network and infrastructure?
Philip
Yeah. Thanks Christina, sure. So roughly, forty years ago, the first communication of commercially successful mobile devices came to market and since then, we saw a rapid technology evolution in mobile communication networks and devices with roughly every 10 years a new generation being introduced. So, 2G in the 90s, 3G, 4G and now 5G coming up in 2019. While the focus of the first mobile phone was on voice, the mobile service portfolio got broader and broader over the years, starting with email on the BlackBerry, initial web browsing and introduction of App Store on the iPhone. 5G technology is now a revolutionary technological enhancement that pushes the performance compared to 4G by factor of roughly 10 or even 100 in many dimensions. This technology is not only about delivering extremely high data rates of up to 11 gigabits per second, but it will also enable very low latency applications. Meaning requesting information, and receiving the reply, and less than 1 millisecond. And it will be based on highly reliable connections. This opens up a broad range of use cases, requiring mobile broadband or low latency connections on machine-to-machine type communications. And as you can imagine 5G will be of interest for the consumer. However, the biggest target market are enterprise customers with very complex services and processes currently many use cases are being tested and deployed in this area like remote robot operations, predictive maintenance supply chain monitoring, etc and you can find those in the utility space industry 4.0, agriculture mining industries and the railroad industry. It is clear that 5G will be based on many innovative new technology building blocks and will come with many demanding deployment requirements in all parts of the networks. Christina, what does 5G mean for the railway industry? Which role will it play?
Kristina
Thank you, Philip, and let me take you down another history lane here. Signaling is certainly one of the most interesting, yet least visible developments in rail technology. Let's just think 100 years back, a lot less than many instances actually. So, you would see a person manually adjusting a wayside signal to stop position. Upon approach, train driver would spot the signal, then again manually pull the brakes. So, a very human to human way to stop the train in the right place. If you fast forward to today, train and track talk without human interference. Wayside equipment recognizes the movement that the speed of a train and any train that is moving too fast, or it’s entering a block were its not supposed to be will receive an automatic brake action. We've all been there. Think about the last time when the train was breaking hard enough to notice with no apparent reason, but not quite hard enough to send luggage flying. Of course, this expense of technology are mostly deployed in highly frequented, higher speed main line train tracks. It is a safety feature, stopping a train about to enter block where another train is still hanging out or where infrastructure will not support speed, maybe, because couple of points or curves ahead. But it also improves efficiency as trains can be spaced more closely without compromising safety. So, signaling systems have developed over the last century where railways were state owned and run. And that's because all the patchwork of non-interoperable systems. Therefore, look as in train crossing the border equipped with separate onboard units for each country they touch and that's making cross-border travel rather cumbersome and expensive. ERTMS is a signaling system which aims at a pan-European solution, but is not yet very widely deployed due to the difficulty and the cost of lifting countries to a signaling system to new solution. At this point, this technology is mostly about ATP, Automatic Train Protection which translates into stopping a train before it risks running into another one or other of the track. As greater automation increase to ATO, Automatic Train Operation, more features, coming into focus such as accelerating or decelerating to specific speed, stopping a train at exactly the right spot. So, like doors aligned with platforms, opening and closing door, etc. In addition, infrastructuralization can be significantly improved by developing moving blocks, where block is no longer a physical length of track between two signals, but it could be broadly described as an invisible safety buffer before and after the train depending on its position and speed. So, this is where 5G comes in, to increase train automation and improve infrastructure management just a new level of signaling technologies is required. Very close to Philip what he said earlier about the advantages of 5G, in terms of speed and latency. So, there are certainly opportunities for 5G to have a great impact on automation and infrastructure, but also for rail OEMs or rail manufacturers, rail operators, and then of course the passenger experience. When we look at how the rail system and the 5G system come together, Philip, what do you think of the most important pieces that the network providers need to do together with the rail operators, to get to that new system that has both the safety feature and the efficiency and improvement in cost feature?
Philip
This clearly depends on the use case you’re looking at. If we talk, for example, about autonomous driving automated driving, which you just mentioned and the related train control system. They will be very strict requirements on the availability and reliability of the infrastructure. So, on the network side, you need to ensure double infrastructure notes and connections resilience systems redundant power supply on distributed architecture. The other extreme use case is where you have a high data volume to send via the uplink channel meaning from the train to the tracks sites unit. This could be the case for video daytime in a surveillance case. Mobile network communication technology is very doweling focus. So enabling this kind of special use case will be a challenge and it would mean for example that you will have to ensure sufficient capacity and to build additional masks. Worst case in areas where there is no power supply and snow backhaul connectivity infrastructure. So, in summary in order to assess the network, and the related investment needs it is important to evaluate the use cases both in terms of performance requirements and in terms of timeline, that means when do I need the respective case to be deployed. In general, a highly relevant point for all railway operators will be to evaluate to what extent telecom operators might be able and willing to share passive and or active infrastructure for future railway operational, use cases. And in this case, how can I pull fill the regulatory requirements and how does the business and operating model for such corporation finally look like.
Kristina
That’s very interesting, brings me to another thought here. The number of trains running across the country or Europe, if were all equipped with a 5G technology would the networks be able to support that.
Philip
For mobile infrastructure, you can provide more capacity based on the equipment you put on the towers, you would need more densification in the network. Meaning, you must build masks and antennas more closely together, which is then certainly linked to heavy investment in the infrastructure. So, this all comes at a cost, depending on how much traffic and how much trains do you need to serve.
Kristina
In current technology, there’s still sufficient hardware to be relatively safe. With 5G, we're entering into another era of communication. So, there question becomes, what is the cyber security concerns and how could they be addressed?
Philip
Yeah, this is a very good point and security has always been a very important point in communication infrastructure. But as you say, when the use cases’ now changing and getting more and more complex, there will be very strict requirements on the security such a system has to provide. 5G in itself, the technology has very strict security mechanisms. So, there is something in place, but for sure, the operator, the railway operator or the telecom operator, they need to ensure from a architecture perspective and from the deployment perspective, that these systems are really safe and there will be tough regulatory requirements on that then.
Kristina
Yeah, well, the railway industry won’t be too surprised next to the aviation industry one of the most heavily regulated industries. They’re very used to those regulations and there is a lot of debate obviously going on about the whole railway infrastructure being strategic assets. I'm sure a lot of the regulation will come in with respect to both the way that technology structured, the question of security features and systems as you described. But also the question of vendors and who will be allowed to deploy their systems, in which country.
Philip
Yeah, absolutely, which leads me to another point, Kristina, how do you think the passenger experience would be impacted by 5G? Now getting to another point, the passenger connectivity and experience, so not only the operational services of the train operators.
Kristina
Well, the whole passenger experience and passenger connectivity will enter an entirely new era with 5G. Right now, it's a bit of kid in the candy store. We can imagine all those great things that will happen. Once 5G’s online and is available, the reality will likely exceed, even that. So, in between the new systems that are available for information systems and the payment systems, just the fact that you might be able to ride a train without being disrupted and whatever you're doing because of your train enters a black hole of no activity at all or too many people in your carriage decide to stream a movie at the same time. All those annoyances will go away. Also, there will be a whole new set of experience and as I said its based information and entertainment that will be affected by this.
Philip
Absolutely and this again will put some restrictions on the network, will put some additional requirements on the network operators or the railway operator, depending who will provide these kinds of services.
Kristina
We talked about earlier the ERTMS topic which has been a couple of decades already that the railway industry has been trying to get to a unified signaling system for efficiency for cost's reasons, but the deployment is lagging a little behind for various reasons. Mostly cost of deployment and the solutions now with 5G, would you see individual solutions that gradually grow into one solution or would you see a great necessity for a European solution to be defined and deployed and rolled out like as one solution.
Philip
Yeah. I think we need to distinguish between the technology architecture or the standard fee we’ll be deploying and the individual solutions the regional operators will use. So, I think the overall ambition needs to be there. Meaning we need to aim for a European Standard for this communication technology, and not only on the railway side, but also on the telecom side, all of these players are working together to get to a really standardized solution from the connectivity level to the service level, which will then enable to handover of trains from one country to the other. And then when it comes to the deployment and the architecture and the real equipment, it is up to each individual railway operator to deploy those systems, but I think it's anywhere given to these standards, I’ve have mentioned that those systems will be fully interoperable in the end.
Kristina
That would be a great situation, great improvement to today, where cross-border traffic is still cumbersome and expensive, given the different systems and the various onboard units that a locomotive or passenger train have to carry to go across a border within Europe.
Philip
Yeah, no absolutely. But, maybe this is also one explanation why things take so long and the whole implementation life cycle is quite long. Its not an easy task, I fully agree. In particular, if you look at this scope of the technology that the stakeholders are, now looking at is not limited to a few use cases, and they are looking really at the whole range of use cases and need to work together with a lot of other institutions like Etsy, which is in charge of the telecommunication standards and so on. So, this is, I think a very challenging project, they need to tackle here.
Kristina
What is the time rise you expect for 5G solutions to gradually make their way into the rail industry, given what you have to say about the deployment, the different use cases, the need to define solutions on a more than country level, so a European level or even further field, the cyber security concerns and regulations that need to be addressed. Is that something we are going to see tomorrow? Or we’re talking a decade.
Philip
The commercial 5G systems for the consumer, as we said, they are basically ready and now the deployment is ongoing and we expecting full coverage in a few years. The operational use cases and the 5G networks of the railway operators, this will still take some time and we expect parallel deployment meaning parallel to the existing communications systems in around four years or 2025 and then gradually deploying this 5G infrastructure. So, this is still some years out, nevertheless planning has to start today. The standardization efforts, as I said are huge and people are working on this and the planning for this overall operating model, how the business case looks like, how the corporation model with other parties looks like, the vendor selection and the different use cases evaluation.
Kristina
So, the over-action planning to understand common standardized infrastructure should look like and the regulations topics, the cybersecurity topics, they all need to be figured out rather quickly. And then it's a matter of railway operators and rail equipment manufacturers to implement them, and develop, build and deploy the trains on the networks that are 5G interoperable side-by-side with others first as you said. The gradually taking over to morph in to 5G network in the medium-to-long-term.
Philip
The interesting part is that given the complexity of the system and the number of use cases. This is a really challenging exercise for this planning where you really have to look at all the use cases and need to set up a timeline and investment plan. What is needed at what timeframe? Are these use cases all applicable on all railways, or are they just on certain tracks? And you need to think about which kind of suppliers are the right ones and so on?
Kristina
Definitely a lot to be put together here. I’m thinking about the technologies in this context, especially the climate change discussions, and the future of mobility of mass transit and public transit. The whole 5G topic may get a push from just the necessity to make rails transit more efficient. And coming back to an earlier comment about 5G technology from a purely infrastructure managers perspective will be able to put more trains on an existing network is no longer if you have certain fixed blocks that a train will be in and no other train may enter. But you'll have those flexible blocks where a train basically has a safety buffer in front or behind it, depending on the speed and position of the train, and you can space a lot more trains on this part of the network, increase the efficiency, increase the number of trains a track can carry. Given the new technologies to the mega trends, together this may become quite a powerful pull-on deployment. Maybe a little faster than otherwise would.
Philip
Yeah. That's an interesting aspect. It comes together with the overall change in the transportation industry and this comes together with the uplift of the new technologies as such. So, if we see further development in 5G technologies and we see deployments in the, say public networks, maybe this will also speed up the deployment of this railway operational systems. From your perspective Christina, do you see any front runners where the whole movement will go in a few years?
Kristina
I could see how to utilize main line tracks to be the first ones to deploy this. And this could be within Europe, probably, and let me venture a guess here, probably some of the very high speed, dedicated very high speed corridors that have their own systems, anyway. And can more easily than others deploy a new signaling system just because there's no other trains running on that particular system and their train are not necessarily running on the systems. So I can see those very specific corridors and their premium that tend to be high-priced. They tend to be high investment. So, I can see those being amongst the first to try this. I can also see some countries that move into the intercity, especially the high-speed markets to then adopt that technology just from the start rather than having to upgrade existing systems. And then there may be, and that goes back to what we said earlier about the whole regulation point that maybe areas that are a little easier to get to a regulation, may be in context with the local provider, a local rail manufacturing or signaling equipment manufacturer can see areas which are more likely to benefit from the technology than others.
Philip
Thanks for this outlook. In general, what advice would you give to OEM or rail operators and mobile network operators going forward?
Kristina
There’s a lot of research development already going into this direction. On the signaling side, that’s both wayside signaling and on board, of course, understand the need for a unified solution for standardized solution and develop it and seek and enhance any collaborations, cooperations between rail and telecommunications. And that when the times there, the ability to work together to calibrate and take this very complicated, but very interesting, very promising, topic with a lot of angles forward in a successful way.
Philip
Very good summary and wrap up of our discussion here.
Kristina
Thank you for joining me here today. It’s been an enjoyable discussion. Also bringing together the transportation and telecommunications perspective and expertise here. It has been quite fun. It’s going to be interesting to see how the industry or industries evolve on that. Maybe we can explore this a little further together in the future episode. Thank you to our listeners for joining as well. If you do have a view that you would like to share, or have any questions around what we discussed today, please write us on Twitter or LinkedIn.
Thank you for joining us with the Velocity podcast. We invite you to subscribe so you'll be notified when the next episode goes live.
