Author: Alan Weissberger
SNS Telecom & IT: Shared Spectrum to Boost 5G NR & LTE Small Cell RAN Market
SNS Telecom & IT‘s latest research report indicates that annual spending on (3GPP specified) 5G NR and LTE small cell RAN (Radio Access Network) infrastructure operating in shared spectrum [1.] will reach nearly $4 Billion by 2024 to support a variety of uses including private cellular networks for enterprises and vertical industries, densification of mobile operator networks, FWA (Fixed Wireless Access), and neutral host connectivity.
Note 1. Spectrum sharing is the simultaneous usage of a specific radio frequency band, in a specific geographical area, by a number of independent entities (usually wireless telcos). In other words, it is the “cooperative use of common spectrum” by multiple users. Spectrum sharing also can take many forms, coordinated and uncoordinated.
Release Date: January 2021 Number of Pages: 592 Number of Tables and Figures: 94
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As the 5G era advances, the cellular communications industry is undergoing a revolutionary paradigm shift, driven by technological innovations, liberal regulatory policies and disruptive business models. One important aspect of this radical transformation is the growing adoption of shared and unlicensed spectrum – frequencies that are not exclusively licensed to a single mobile operator.
Telecommunications regulatory authorities across the globe have launched innovative frameworks to facilitate the coordinated sharing of licensed spectrum, most notably the United States’ three-tiered CBRS scheme for dynamic sharing of 3.5 GHz spectrum, Germany’s 3.7-3.8 GHz licenses for private 5G networks, the United Kingdom’s shared and local access licensing model, France’s 2.6 GHz licenses for industrial LTE/5G networks, the Netherlands’ local mid-band spectrum permits, Japan’s local 5G network licenses, Hong Kong’s geographically-shared licenses, and Australia’s 26/28 GHz area-wide apparatus licenses. Collectively, these ground-breaking initiatives are catalyzing the rollout of shared spectrum LTE and 5G NR networks for a diverse array of use cases ranging from private cellular networks for enterprises and vertical industries to mobile network densification, FWA and neutral host infrastructure.
In addition, the 3GPP cellular wireless ecosystem is also accelerating its foray into vast swaths of globally and regionally harmonized unlicensed spectrum bands. Although existing commercial activity is largely centered around LTE-based LAA (Licensed Assisted Access) technology whereby license-exempt frequencies are used in tandem with licensed anchors to expand mobile network capacity and deliver higher data rates, the introduction of 5G NR-U in 3GPP’s Release 16 specifications paves the way for 5G NR deployments in unlicensed spectrum for both licensed assisted and standalone modes of operation.
Even with ongoing challenges such as the COVID-19 pandemic-induced economic slowdown, SNS Telecom & IT estimates that global investments in 5G NR and LTE small cell RAN infrastructure operating in shared and unlicensed spectrum will account for more than $1.3 Billion by the end of 2021. The market is expected to continue its upward trajectory beyond 2021, growing at CAGR of approximately 44% between 2021 and 2024 to reach nearly $4 Billion in annual spending by 2024.
The “Shared & Unlicensed Spectrum LTE/5G Network Ecosystem: 2021 – 2030 – Opportunities, Challenges, Strategies & Forecasts” report presents a detailed assessment of the shared and unlicensed spectrum LTE/5G network ecosystem including the value chain, market drivers, barriers to uptake, enabling technologies, key trends, future roadmap, business models, use cases, application scenarios, standardization, spectrum availability/allocation, regulatory landscape, case studies, ecosystem player profiles and strategies. The report also provides global and regional forecasts for shared and unlicensed spectrum LTE/5G RAN infrastructure from 2021 till 2030. The forecasts cover two air interface technologies, two cell type categories, two spectrum licensing models, 12 frequency band ranges, seven use cases and five regional markets.
Important research findings from the report include the following:
- Even with ongoing challenges such as the COVID-19 pandemic-induced economic slowdown, SNS Telecom & IT estimates that global investments in LTE and 5G NR RAN infrastructure operating in shared and unlicensed spectrum will account for more than $1.3 Billion by the end of 2021. The market is expected to continue its upward trajectory beyond 2021, growing at CAGR of approximately 44% between 2021 and 2024 to reach nearly $4 Billion in annual spending by 2024.
- Breaking away from traditional practices of spectrum assignment for mobile services that predominantly focused on exclusive-use national licenses, telecommunications regulatory authorities across the globe have launched innovative frameworks to facilitate the coordinated sharing of licensed spectrum.
- Notable examples include the United States’ three-tiered CBRS scheme for dynamic sharing of 3.5 GHz spectrum, Germany’s 3.7-3.8 GHz licenses for private 5G networks, the United Kingdom’s shared and local access licensing model, France’s 2.6 GHz licenses for industrial LTE/5G networks, the Netherlands’ local mid-band spectrum permits, Japan’s local 5G network licenses, Hong Kong’s geographically-shared licenses, and Australia’s 26/28 GHz area-wide apparatus licenses.
- Collectively, these ground-breaking initiatives are catalyzing the rollout of shared spectrum LTE and 5G NR networks for a diverse array of use cases ranging from private cellular networks for enterprises and vertical industries to mobile network densification, FWA and neutral host infrastructure.
- In particular, private LTE and 5G networks operating in shared spectrum are becoming an increasingly common theme. For example, Germany’s national telecommunications regulator BNetzA (Federal Network Agency) has received more than a hundred applications for private 5G licenses in 2020 alone. Dozens of purpose-built 5G networks are already in operational use by the likes of aircraft maintenance specialist Lufthansa Technik, industrial conglomerate Bosch, automakers and other manufacturing giants.
- Since the commencement of its local 5G spectrum licensing scheme, Japan has been showing a similar appetite for industrial-grade 5G networks, with initial field trials and deployments being spearheaded by many of the country’s largest industrial players including Fujitsu, Mitsubishi Electric, Sumitomo Corporation and Kawasaki Heavy Industries.
- Among other examples, the 3.5 GHz CBRS shared spectrum band is being utilized to set up private LTE networks across the United States for applications as diverse as remote learning and COVID-19 response efforts in healthcare facilities. 5G NR-based CBRS implementations are also expected to emerge between 2021 and 2022 to better support industrial IoT requirements. Multiple companies including agriculture and construction equipment manufacturer John Deere have already made commitments to deploy private 5G networks in CBRS spectrum.
- Mobile operators and other cellular ecosystem stakeholders are also seeking to tap into vast swaths of globally and regionally harmonized unlicensed spectrum bands for the operation of 3GPP technologies. Although existing deployments are largely based on LTE-LAA technology whereby license-exempt frequencies are used in tandem with licensed anchors to expand mobile network capacity and deliver higher data rates, standalone cellular networks that can operate solely in unlicensed spectrum – without requiring an anchor carrier in licensed spectrum – are beginning to emerge as well.
- In the coming years, with the commercial maturity of 5G NR-U technology, we also anticipate to see 5G NR deployments in unlicensed spectrum for both licensed assisted and standalone modes of operation using the 5 GHz and 6 GHz bands as well as higher frequencies in the millimeter wave range – for example, Australia’s 24.25-25.1 GHz band that is being made available for uncoordinated deployments of private 5G networks servicing locations such as factories, mining sites, hospitals and educational institutions.
The report will be of value to current and future potential investors into the shared and unlicensed spectrum LTE/5G network market, as well as LTE/5G equipment suppliers, mobile operators, MVNOs, fixed-line service providers, neutral hosts, private network operators, vertical domain specialists and other ecosystem players who wish to broaden their knowledge of the ecosystem.
For further information concerning the SNS Telecom & IT publication “The Shared & Unlicensed Spectrum LTE/5G Network Ecosystem: 2021 – 2030 – Opportunities, Challenges, Strategies & Forecasts” please visit: https://www.snstelecom.com/shared-spectrum
For a sample please contact: [email protected]
About SNS Telecom & IT:
Part of the SNS Worldwide group, SNS Telecom & IT is a global market intelligence and consulting firm with a primary focus on the telecommunications and information technology industries. Developed by in-house subject matter experts, our market intelligence and research reports provide unique insights on both established and emerging technologies. Our areas of coverage include but are not limited to wireless networks, 5G, LTE, SDN (Software Defined Networking), NFV (Network Functions Virtualization), IoT (Internet of Things), critical communications, big data, smart cities, smart homes, consumer electronics, wearable technologies, and vertical applications.
References:
Verizon realizes operational efficiencies as massive cost cutting continues; 4G-LTE Home (Fixed Wireless Access)
Speaking at the Citi 2021 Global TMT investor conference on January 5, 2021, Verizon executive Ronan Dunne said the telco’s operational efficiency has continued to increase, largely due to cutting $10 billion in costs, which was first announced four years ago by then CEO Lowell McAdam.
Dunne said Verizon has been reaping billions of dollars every year in operational efficiencies from the core of how it builds network to the efficient way it carries traffic on that network with its One Fiber strategies. Verizon’s One Fiber project, which has been underway for five years, combined all of the telco’s fiber needs and planning into one project. It also allows Verizon to plot out its fiber uses cases and purchasing plans across all of its sectors.
“But as regards (to) the focus of operational efficiency, it’s a ruthless, consistent focus inside the business in exactly the same way as balance sheet strength has always been a watchword of Verizon. And so rest assured those will continue to be as important in ’21 and ’22 as they have been in the last few years.”
Regarding cost cutting, Dunne had this to say: “So yes, Matt (Verizon CFO Matt Ellis) has talked about our commitment to a $10 billion cost program, and we’ve made excellent progress on that. But in my time in the wireless business originally and then consumer, we’ve made significant strides. We’re talking about billions of dollars every year in operational efficiencies. From — right from the core of how we build the network, to be highly, highly efficient, how we carry traffic on the network with our One Fiber strategies to how we serve customers and deliver experiences. And across all of those vectors, we see continued opportunity.”
In addition to densification of the wireless network, backhaul and fronthaul, and enabling wireline access, having fiber deep is key for supporting radio access networks (RAN) as well as provisioning an increasing number of small cells. Verizon CTO Kyle Malady built the telco’s Intelligent Edge Network, which has allowed Verizon to lower its operational costs by benefiting “from efficiencies within the core and right through the business.”
“The particular area that I’m focused on in my part of the business is really AI at scale,” Dunne said. “That really allows us to improve our CRM (Customer Relationship Management) efficiency. So the efficiency of every dollar invested in acquisition and retention. Also the efficiency of every dollar invested in those elements that are customer service elements, and distribution elements,” he added.
Dunne opined that when you think about Verizon you recognize its network as a platform, it’s distribution as a platform and it’s billing and services platforms. He believes the opportunity to improve the efficiency of those platforms through investment in technology.
He also talked about the relationships with Microsoft and AWS for edge computing as a new platform capability that’s available both to us internally but also available to customers and partners. “So that’s the strategy. So we see the opportunity to grow highly efficiently as well as serve the existing base more efficiently and lots more to come there.”
“I’m not building a fixed wireless access network,” said Dunne, expressing a bit of frustration regarding a question of whether the company is on target to hit that 30 million homes passed goal. “I’m building a 5G mobility network with a second use case where it’s appropriate, where it covers 5G Office and 5G Home, so we just shouldn’t lose sight of that.”
Dunne says that he believes they are still on track, but the reality on the ground has Verizon constantly updating its 5G mobility strategy of where and how the service gets deployed. That reality impacts the ramp up of 5G Home, potentially slowing its deployment. The service is currently in 12 markets, with very limited footprints in those markets.
Verizon’s recently launched 4G LTE Home fixed wireless service (intended for rural subscribers) should also be included in a discussion of the company’s overall fixed wireless goals. The carrier’s 5G Home service and the goals associated with it pre-date the launch of the new 4G LTE based fixed wireless service, that Verizon initially said would target smaller markets.
Image Credit: Getty
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“One of the other things that I think is important for people to think about is that as we build out the 5G network, we’ve also built 4G Home and we’ve seen significant response to that,” said Dunne. “My addressable market for Home, for me, has always been not limited to the specific of a 5G fixed wireless, but a broader ambition to be able to participate in the home.”
4G LTE fixed wireless access offers peak speeds of 50 Mbps for now, compared to its 5G Home service which claims average speeds of 300 Mbps. Nevertheless, Dunne sees this broader footprint of 4G and 5G fixed wireless combined with mobility, as a formidable competitor to cable broadband, and its fixed wireless homes passed goal attainment should be agnostic to the underlying wireless technology.
Can 5G fixed wireless access be an alternative to cable?
“Well, then my strong view is, yes, it can. But to be clear, we only build where there’s a mobility case to build. We’re not building a stand-alone 5G fixed wireless network. So sometimes when respectfully, people get frustrated with us and say, well, hold on a second. What about — I want to see all your discrete reporting of 5G fixed wireless or why aren’t you there or there or there? The answer, which — forgive me, but I keep repeating is because I’m not building a fixed wireless access network. I’m building a 5G mobility network with a second use case, where it’s appropriate, where it covers 5G office and 5G home. So we shouldn’t lose sight of that.
So as I build over that sort of 7-, 8-year horizon, one of the realities is that I will be updating my mobility deployment patterns all the time. So we’re not really — we’re not saying that, that sort of 7, 8 years for the 30 million homes time line is shifting. But what I am saying is we continue to optimize the mobility 5G deployment strategy. And as a result, we continue to finesse and update the practicalities of that relative to the homes past. But one of the other things that I think is important for people to think about is that as we build out the 5G network, we’ve also built 4G home, and we’ve seen significant response to that. And yes, that’s a maybe a 50 meg product rather than a 500 meg product. But for a lot of people, that’s important. And that also affords us this opportunity that as we build out 5G, as we put more nodes in place, but also as we put more carriers out there, deploy more spectrum, et cetera, we have this ability to build a home portfolio, which is carrier — basically bearer-agnostic. And I think the thing for us is that we see the opportunities to participate in tens of millions of homes across the U.S. as really attractive.
What I want to do is have toolkit that says, in my Fios footprint, if fiber is the right thing to do, great. If anywhere in the U.S. 5G ultra-wideband is available to me, I have that. And in other places, I have my 4G increasingly enhanced performance in that network, which may ultimately be a 5G nationwide solution. So my addressable market for home for me has always been not limited to the specific of a 5G fixed wireless but a broader ambition to be able to participate in the home and to bring the scale benefits of that to my customers who see Verizon as the partner of choice.”
We think we have a very strong growth opportunity, which is stimulate the base, spread through our network and distribution as
a platform, our access to the market across all of the available segments and really execute on a very strong, high performance, both network, but also a set of experiences….
References:
https://www.verizon.com/about/investors/citi-2021-global-tmt-west-virtual-conference
https://www.verizon.com/about/sites/default/files/2021-01/Citi-Conf-Transcript-01052021.pdf
https://www.fiercetelecom.com/telecom/verizon-closes-its-10-billion-cost-cutting-goal
https://www.pcmag.com/news/verizon-launches-unlimited-4g-home-internet-for-rural-users-here-are-the
5G in South Korea at 15.5% of mobile subscribers vs 30% expected by end of 2020
South Korea has racked up a considerable 5G user base since the networks’ commercialization in April 2019 — 10.9 million subscribers as of end-November, accounting for around 15.5 percent of the total 70 million mobile subscriptions. SK Telecom had the most 5G subscriptions in November at 5.1 million, followed by KT at 3.3 million and LG Uplus at 2.5 million.
The average 5G user consumed 26 gigabytes of data in November, according to government data. A recent South Korea ministry report found that the country’s 5G networks had an average 5G download speed reaching 690.47 Mbps, just over four times faster than current 4G LTE speeds.
Graph Credit: RootMetrics
Median download speeds shown above reflect combined 4G and 5G speeds; pure 5G connections are faster.
RootMetrics’ says South Korean “blueprint” for rapid 5G success is based on several factors. Two of the three South Korean carriers are using 100MHz of 5G bandwidth, and the third uses 80MHz, all around the “mid band” 3.5GHz frequency. Contrast that with U.S. carriers which have struggled for regulatory reasons to get access to both mid band spectrum and similarly large spectrum blocks.
The South Korean carriers have also been able to deploy plenty of network hardware across South Korean cities and have seen relatively little performance degradation indoors compared with outdoors, unlike early U.S. 5G millimeter wave deployments. In other words, the key to performant 5G is widely deployed mid band networking gear, which a major domestic vendor and government coordination can make considerably easier.
South Korea has benefited significantly from the availability of Samsung 5G networking hardware and devices. RootMetrics expects that the belated launches of 5G-compatible iPhones could encourage other countries and carriers to achieve parity with the current 5G leader, as global demand for 5G will be driven at least as much by consumer devices as industrial applications. The report suggests that the one-year pace of the performance uptick “suggest[s] that networks in other countries could follow suit, which would level the worldwide 5G playing field” despite the “commanding lead” South Korea currently holds.
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User migration from 4G LTE to 5G has fallen short of expectations, prompting competitive pay plans by the three carriers. The companies had initially shot for 5G subscriptions to account for up to 30 percent of their mobile users by the end of last year. A recent Korea ministry report found that the country’s 5G networks had an average 5G download speed reaching 690.47 megabits per second (Mbps), just over four times faster than current 4G LTE speeds.
Carriers are still betting on the lower prices to give the shove the local 5G market needs for faster migration. LG Uplus Corp. said Tuesday it will release a new monthly data plan, offering 6 gigabytes of data at 5G speeds for 47,000 won (US$43), following rival carrier KT Corp., which also launched late last year a monthly 5G plan at 45,000 won for 5 gigabytes of data. The new data plans are relatively more affordable than most existing 5G data plans that cost over 50,000 won a month.
“By creating low-to-mid priced plans, we hope to both reduce telecommunication costs and expand the 5G market,” an LG Uplus official said.
SK Telecom Co., the country’s largest carrier, has also lowered the price of its 5G data plans, pending government review.
SK Telecom, KT Corp. and LG Uplus are currently preparing to commercialize 5G stand alone networks and 5G millimeter wave.
In July of 2020, the big three Korean mobile operators agreed to invest a total of KRW 25.7 trillion ($22 billion) through 2022 to boost 5G infrastructure across the country. That investment primarily focuses on enhancing 5G quality in Seoul and six other metropolitan cities. The investment plan also stipulates the deployment of 5G in 2,000 multi-purpose facilities, on Seoul Metro lines 2 and 9 and along major highways. In 2021, the carriers committed to expand 5G connectivity to an additional 85 districts, including 4,000 multi-purpose facilities, subways and all train stations, as well as 20 additional highways.
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Samsung Electronics Co. is expected to remain the world’s top smartphone producer this year, according to a report by according to market researcher TrendForce. However, the company’s market share is likely to decrease as other brands will ramp up production with the recovery of mobile demand.
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Trendforce: Global Smartphone Market to Reach 1.36 Billion Units in 2021 as Samsung regains #1 position
Samsung Electronics Co. is expected to remain the world’s top smartphone producer this year, according to a report by according to market researcher TrendForce. However, the company’s market share is likely to decrease as other brands will ramp up production with the recovery of mobile demand.
The top six smartphone brands ranked by production volume for 2020, in order, are Samsung, Apple, Huawei, Xiaomi, OPPO, and Vivo. The most glaring change from the previous year is Huawei’s market share.
Thanks to the Chinese government’s aggressive push for 5G commercialization in 2020, global 5G smartphone production for the year reached about 240 million units, a 19% penetration rate, with Chinese brands accounting for almost a 60% market share. While 5G will remain a major topic in the smartphone market this year, various countries will also resume their 5G infrastructure build-out, and mobile processor manufacturers will continue to release entry-level and mid-range 5G chips. As such, the penetration rate of 5G smartphones is expected to undergo a rapid increase to 37% in 2021, for a yearly production of about 500 million units.
Global smartphone production was projected to increase 9 percent on-year to 1.36 billion units in 2021. Trendforce predicted that device replacement demand and growth in emerging markets will lead to gradual recovery of the smartphone market.
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TrendForce indicates that smartphone brands’ recent bullish outlook towards the 2021 market and their attempt to secure more semiconductor supplies by increasing their smartphone production targets can potentially lead these brands to overbook certain components at foundries. However, smartphone brands may adjust their component inventories from 2Q21 to 3Q21 and reduce their semiconductor procurement activities if actual sales performances fall short of expectations, or if component bottlenecks remain unresolved, leading to a widening inventory gap between bottlenecked and non-bottlenecked parts. Even so, TrendForce still forecasts an above-90% capacity utilization rate for foundries in 2021.
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References:
http://www.trendforce.com/presscenter/news/20210105-10630.html
Assessment of COVID-19 impact on telecom industry; C-Band Spectrum Update
COVID-19 Impact on Telcos:
Source: Analysys Mason
The telecommunications industry has suffered limited damage as a result of the COVID-19 pandemic. Revenue figures for most network operators have fallen slightly, but few have encountered anything that is particularly severe or long-lasting. As a result, few telcos have made significant changes to their strategy.
However, some aspects of the telecoms sector have been significantly affected by the pandemic. The most obvious is business services; revenue in this segment declined sharply for most operators in 2020 and prospects for 2021 are uncertain. Operators may have to rethink important parts of their strategies related to these aspects.
The telecoms industry has been affected by the pandemic in many different ways, and have been grouped these into three main categories depicted in the figure below:
Summary of the impact of the COVID-19 pandemic on the telecoms industry
Assumptions of a stable economy and a continuation of existing service and technology trends often underpin an operator’s strategic plan. For some of the services offered by operators, business services in particular, these assumptions look outdated and may need a rethink.
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C-Band Auction Update:
Source: MoffettNathanson Research
Heading into the FCC’s C-Band auction, Wall Street analysts saw Verizon as the leading bidder for 5G wireless radio spectrum. Bidding for licensed spectrum in the telecom industry’s most expensive auction ever reached more than $75 billion on Monday amid speculation over how much each of the big wireless telcos and cable companies have paid.
In a note to clients, analyst/colleague Craig Moffett of MoffettNathanson is assuming that Verizon will end up being the largest buyer at the ongoing auction of mid-band spectrum targeted for new 5G deployments. As a result, Verizon’s balance sheet will be more heavily burdened and more of their future cash flows will be diverted to debt service so their future profits will be lower.
AT&T, on the other hand, will “be disadvantaged for a generation” if they don’t get a significant chunk of the mid-band spectrum being auctioned. Craig believes that AT&T was probably “one of the two big bidders that more or less backed away after round 24 or round 38.”
An important issue is “whether “winners” in this auction acquired reasonably uniform contiguous blocks, or whether they instead (worst case scenario) ended up with a patchwork of licenses and a hefty bill to burden the balance sheet. If so, will their footprints be largely erased by subsequent topping bids from others.”
With respect to using the purchased mid-band spectrum for accelerated 5G deployments, Craig wrote: “At best, the huge sums paid here for spectrum risk displacing the capital investment needed to put the acquired spectrum to use. At worst, they risk financially destabilizing one or more players.”
In conclusion, Craig asks if the large amounts of money being spent for an asset (licensed mid-band spectrum) that is best thought of as simply maintaining the status quo will be worth the price paid? “Again, the most important question is this: is anyone going to change their revenue forecast just because the industry had to spend twice as much as expected to buy spectrum for 5G.”
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References:
Mid-band Spectrum for 5G: FCC C-Band Auction at $70B Shattering Records
India ramps up supply chain for 5G service launch in 2021 pending spectrum auction
There is excitement about the anticipated launch of 5G telecom services in India, but the government’s spectrum pricing strategy may be a damper. While the evolving ancillary segments are working on the backbone infrastructure for the 5G roll-out following Reliance Industries Ltd chairman Mukesh Ambani’s assurance that Reliance Jio Infocomm Ltd will launch 5G wireless service in the second half of 2021, experts, however, said that India is not 100% ready.
India telecom equipment company Sterlite Technologies Ltd (STL) said India has been developing 5G infrastructure, but a pan-India roll out will require improving the device, spectrum, wireless and fiber optic ecosystem. “India has the capability of rolling out 5G as we have been building the infrastructure for years now. However, for a countrywide end-to-end deployment, India is not 100% ready… At STL, we will start commercial deployment of open-RAN (open radio access) that is required for 5G by second half of 2021,” said Anand Agarwal, group chief executive at STL. The primary impact of 5G roll-out will be on the commercial ecosystem. According to Agarwal, global supply chains have already matured and are 5G-ready, which makes it easier to import raw material (this author finds that very difficult to believe).
Experts said stressed financials of Bharti Airtel Ltd and Vodafone Idea Ltd (Vi) could discourage them to participate in the 5G launch, in view of the costs involving fiberization and the pricing of spectrum. Airtel and Vi are sitting on massive debts but continue to offer among the lowest tariffs in the world. The telcos have also called for affordable spectrum.
Analysts said the spectrum auction in March may see limited participation from Airtel and Vi due to high reserve prices. Jio, however, is likely to buy spectrum in the 700 megahertz (MHz) band, which is best suited for 5G.
Meanwhile, phone makers have also started producing 5G devices too. Faisal Kawoosa, the founder of techARC, said that India imported nearly two million 5G smartphones in 2020. “While most of these were in ultra-premium range, this year, any new smartphone priced above ₹30,000 should support 5G,” Kawoosa said, adding that 7-9% of all smartphones sold in India in 2021 are likely to support 5G, making it nearly four times the imports. However, will those so called “5G” users actually get 5G service, especially when roaming?
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The big 3 Indian telcos are likely to voice their concerns to the Department of Telecommunications (DoT) as the National Frequency Allocation Plan (NFAP-2018) has not been updated by the department’s wireless planning cell (WPC) more than a year after several new airwave bands, including the 26 Ghz spectrum, were identified by the ITU-R WRC 19 for 5G deployments worldwide, including in India.
The NFAP is a central policy roadmap that defines future spectrum usage by all bodies in the country, including DoT, the Department of Space and the defence ministry. Telcos want it revised quickly as any further delay could potentially hinder the auctioning of the premium millimetre-wave 5G bands.
“The NFAP-2018 needs to be revised expeditiously by the WPC to align different stakeholders if a meaningful 5G auction is to happen later this year, and the industry will take up the matter with DoT,” a senior industry executive told ET.
In November 2019, WRC-19 identified a set of new airwaves, including the 24.25-27.5 Ghz (popularly known as the 26 Ghz band), 37-43.5 Ghz, 45.5-47 Ghz, 47.2-48.2 Ghz and 66-71 Ghz bands for 5G services. However, none of these bands (primarily the mm waves) have been included in India’s NFAP. Note also that ITU-R WP5D has not yet agreed on a revision of ITU-R M.1036 which would include the new frequency arrangements agreed during WRC 19 for terrestrial IMT deployments.
Analysis and Implications: China’s 3 Major Telecom Operators to be delisted by NYSE
The New York Stock Exchange (NYSE) said it will delist China’s three large state owned telecom carriers. The move was expected after a November U.S. government order barring Americans from investing in companies it says help the Chinese military.
- China Mobile, which is among the most valuable of China’s listed state-owned enterprises, will be removed from the Big Board after more than two decades.
- China Unicom Hong Kong will also be delisted along with China Telecom.
The NYSE said it would suspend trading in securities issued by China Mobile, China Telecom and China Unicom by January 11th. The big board also said it would also halt trading in closed-end funds and in exchange-traded products listed on its NYSE Arca exchange if they hold banned China stocks.
The U.S. Defense Department (DoD) had previously listed the three companies as having significant connections to Chinese military and security forces. The delisting highlights the faltering of long-established business ties between the United States and China, which were set up over decades as China sought to internationalize and reform its state-run corporate behemoths (see China-U.S. Cold War backgrounder below).
The NYSE decision is the latest setback for these companies, which rank among the largest global telecommunications providers. The exchange’s decision is unlikely to seriously harm the Chinese telecom giants in the near term. Mounting pressure from Washington has already stymied their ability to operate in the U.S., a country that makes up a negligible amount of their international business.
China’s top three network providers still benefit from hundreds of millions of customers in their home country. That has attracted investors to their Chinese-listed shares. The cellphone carriers have spent billions of dollars on new fifth-generation wireless networks over the past two years with support from officials in Beijing, who have called 5G upgrades a national priority.
All three telecoms companies operate under Beijing’s firm control. They are ultimately owned by a government agency, the State-owned Assets Supervision and Administration Commission, and are often ordered to pursue Beijing’s goals. China’s ruling Communist Party sometimes shuffles executives among the three companies.
They are the only three companies in China that are permitted to provide broad telecommunications network services, which Beijing regards as a strategic industry that must remain under state control.
Xi Jinping, China’s top leader (President of the People’s Republic of China 中华人民共和国主席), has talked about making state companies bigger and stronger rather than more streamlined. That has led to concerns among some economists and entrepreneurs that the Chinese government is taking a greater role in private enterprise.
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Impact of the Delisting:
At the same time, the imminent delisting of several major Chinese companies will get the attention of portfolio managers, after a year long push to ensure Chinese firms’ compliance with U.S. audit rules. While the final outcome of that effort is unclear, the NYSE decision underscores the fraught politics of the U.S.-China relationship as the Trump administration comes to a close.
“The delisting issue is a live one with financial clients,” said Leland Miller, chief executive of China Beige Book International, which provides data on China’s economy to international investors. “There are some jittery people out there.”
On Friday, China Unicom said it would release a statement in due course. Neither China Telecom or China Mobile responded to WSJ requests for comment.
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China Telecoms Shares Greatly Underperform:
China Mobile’s U.S. stock is thinly traded compared with its Hong Kong securities, FactSet data shows. About 2.1 million American depositary receipts traded daily on average over the past three months, compared with 34 million Hong Kong shares a day. Each ADR is equivalent to five ordinary shares in Hong Kong.
U.S. shares in China Mobile, the largest of the three companies by market value, declined 29% over the past year, according to FactSet, while China Telecom dropped 30% and China Unicom fell 39%. Over the same span, the S&P 500 index returned 18% and the communications-services sector of the MSCI World Index rose 22%. All figures reflect total returns, including dividends.
Over the past decade, China Mobile shares have declined 15% including dividend payments, FactSet data show, while China Telecom has dropped 32% and China Unicom has fallen 54%. The S&P 500 has gained 267% on the same basis and the MSCI World communications sector has gained 165%.
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Backgrounder: China vs U.S. Cold War:
An executive order signed by President Trump in November will block Americans from investing in a list of companies the U.S. government says supply and support China’s military, intelligence and security services. The ban starts on Jan. 11 and investors have until November to divest themselves of their holdings.
The list currently includes 35 companies—including China’s largest chip maker—as well as surveillance, aerospace, shipbuilding, construction and technology companies.
It wasn’t initially clear whether the order covered subsidiaries as well as parent companies, and U.S. government leaders clashed over how broad the blacklist should be, The Wall Street Journal reported in December.
The Chinese government has accused Washington of misusing national security as an excuse to hamper competition and has warned that Trump’s order would hurt U.S. and other investors worldwide.
Political analysts expect little change in policy under President-elect Joe Biden due to widespread frustration with China’s trade and human rights records and accusations of spying and technology theft.
U.S. officials have complained that China’s ruling Communist Party (CCP) takes advantage of access to American technology and investment to expand its military, already one of the world’s biggest and most heavily armed.
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References:
https://www.wsj.com/articles/nyse-to-delist-chinas-major-telecommunications-operators-11609498750
https://www.nytimes.com/2021/01/01/business/nyse-delist-china-mobile.html
https://apnews.com/article/donald-trump-business-hong-kong-china-08e71111b26c119048c523c5ba3ebde5
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January 5, 2021 UPDATE:
The New York Stock Exchange reversed its decision to delist China Mobile, China Telecom, and China Unicom before it becomes effective.
NYSE said that “in light of further consultation with relevant regulatory authorities in connection with Office of Foreign Assets Control FAQ 857, available here, the New York Stock Exchange LLC (“NYSE”) announced today that NYSE Regulation no longer intends to move forward with the delisting action in relation to the three issuers enumerated below (the “Issuers”) which was announced on December 31, 2020.”
Meanwhile, the reversal is not yet final, as the NYSE maintained that it would “continue to evaluate the applicability of Executive Order 13959 to these Issuers and their continued listing status.” There is no substantiated evidence that pressure from China or intervention from the incoming Biden administration has played a role in the change of mind by NYSE.
Technically all the three Chinese state-owned telcos are listed on the Stock Exchange of Hong Kong (HKEX), and what’s traded in New York is an instrument called American depositary receipts (ADRs), which enables American investors to trade on foreign companies listed elsewhere.
On Monday, as a response to NYSE’s delisting announcement, the three telcos updated the market that ADRs represent between 3.3% and 8% of their total tradable shares. According to an earlier response by China Securities Regulatory Commission (CSRC) to NYSE’s original decision, the three operators’ ADRs only account for less than 2.2% of the equity shares of these companies, with “a total market capitalization of less than 20 billion RMB yuan” ($3.1 billion). China Mobile is the heaviest user of this instrument, accounting for 90% of the total value.
According to the Treasury Department, if NYSE’s original decision to delist were to go ahead, these companies would also need to be eliminated from other financial instruments, including derivatives, depositary receipts, exchange-traded funds, index funds, and mutual funds. The reversal of decision may have taken away the requirement for traders to make immediate changes in their products, some measures may still be needed as a precaution, and the actions may not be limited to the three telcos.
In December two index providers, FTSE Russell and S&P Dow Jones have both removed a number of Chinese companies from some of their indexes following the executive order. There are 35 companies on the Treasury Department’s list compiled for this particular executive order, including, in additions to the three operators, the usual suspects like Huawei and SMIC.
January 6, 2021 Update:
New York Stock Exchange Reverses Course Again, Will Delist 3 Chinese Telecom Firms After All!
MTN Consulting: Network operator capex forecast at $520B in 2025
Executive Summary:
Telco, webscale and carrier-neutral capex will total $520 billion by 2025 according to a report from MTN Consulting.. That’s compared with $420 billion in 2019.
- Telecom operators (telco) will account for 53% of industry Capex by 2025 vs 9% in 2019;
- Webscale operators will grow from 25% to 39%;
- Carrier-neutral [1.] providers will add 8% of total Capex in 2025 from 6% in 2019.
Note 1. A Carrier-neutral data center is a data center (or carrier hotel) which allows interconnection between multiple telecommunication carriers and/or colocation providers. It is not owned and operated by a single ISP, but instead offers a wide variety of connection options to its colocation customers.
Adequate power density, efficient use of server space, physical and digital security, and cooling system are some of the key attributes organizations look for in a colocation center. Some facilities distinguish themselves from others by offering additional benefits like smart monitoring, scalability, and additional on-site security.
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The number of telco employees will decrease from 5.1 million in 2019 to 4.5 million in 2025 as telcos deploy automation more widely and spin off parts of their network to the carrier-neutral sector.
By 2025, the webscale sector will dominate with revenues of approximately $2.51 trillion, followed by $1.88 trillion for the telco sector and $108 billion for carrier-neutral operators (CNNOs).
KEY FINDINGS from the report:
Revenue growth for telco, webscale and carrier-neutral sector will average 1, 10, and 7% through 2025
Telecom network operator (TNO, or telco) revenues are on track for a significant decline in 2020, with the industry hit by COVID-19 even as webscale operators (WNOs) experienced yet another growth surge as much of the world was forced to work and study from home. For 2020, telco, webscale, and carrier-neutral revenues are likely to reach $1.75 trillion (T), $1.63T, and $71 billion (B), amounting to YoY growth of -3.7%, +12.2%, and 5.0%, respectively. Telcos will recover and webscale will slow down, but this range of growth rates will persist for several years. By 2025, the webscale sector will dominate with revenues of approximately $2.51 trillion, followed by $1.88 trillion for the telco sector and $108 billion for carrier-neutral operators (CNNOs).
Network operator capex will grow to $520B by 2025
In 2019, telco, webscale and carrier-neutral capex totaled $420 billion, a total which is set to grow to $520 billion by 2025. The composition will change starkly though: telcos will account for 53% of industry capex by 2025, from 9% in 2019; webscale operators will grow from 25% to 39% in the same timeframe; and, carrier-neutral providers will add 8% of total capex in 2025 from their 2019 level of 6%.
By 2025, the webscale sector will employ more than the telecom industry
As telcos deploy automation more widely and cast off parts of their network to the carrier-neutral sector, their employee base should decline from 5.1 million in 2019 to 4.5 million in 2025. The cost of the average telco employee will rise significantly in the same timeframe, as they will require many of the same software and IT skills currently prevalent in the webscale workforce. For their part, webscale operators have already grown from 1.3 million staff in 2011 to 2.8 million in 2019, but continued rapid growth in the sector (especially its ecommerce arms) will spur further growth in employment to reach roughly 4.8 million by 2025. The carrier-neutral sector’s headcount will grow far more modestly, rising from 90 million in 2019 to about 119 million in 2025. Managing physical assets like towers tends to involve a far lighter human touch than managing network equipment and software.
Example of a Carrier Neutral Colo Data Center
RECOMMENDATIONS:
Telcos: embrace collaboration with the webscale sector
Telcos remain constrained at the top line and will remain in the “running to stand still” mode that has characterized their last decade. They will continue to shift towards more software-centric operations and automation of networks and customer touch points. What will become far more important is for telcos to actively collaborate with webscale operators and the carrier-neutral sector in order to operate profitable businesses. The webscale sector is now targeting the telecom sector actively as a vertical market. Successful telcos will embrace the new webscale offerings to lower their network costs, digitally transform their internal operations, and develop new services more rapidly. Using the carrier-neutral sector to minimize the money and time spent on building and operating physical assets not viewed as strategic will be another key to success through 2025.
Vendors: to survive you must improve your partnership and integration capabilities
Collaboration across the telco/webscale/carrier-neutral segments has implications for how vendors serve their customers. Some of the biggest telcos will source much of their physical infrastructure from carrier-neutral providers and lean heavily on webscale partners to manage their clouds and support new enterprise and 5G services. Yet telcos spend next to nothing on R&D, especially when compared to the 10% or more of revenues spent on R&D by their vendors and the webscale sector. Vendors who develop customized offerings for telcos in partnership with either their internal cloud divisions (e.g. Oracle, HPE, IBM) or AWS/GCP/Azure/Alibaba will have a leg up. This is not just good for growing telco business, but also for helping webscale operators pursue 5G-based opportunities. One of the earliest examples of a traditional telco vendor aligning with a cloud player for the telco market is NEC’s 2019 development of a mobile core solution for the cloud that can be operated on the AWS network; there will be many more such partnerships going forward.
All sectors: M&A is often not the answer, despite what the bankers urge
M&A will be an important part of the network infrastructure sector’s evolution over the next 5 years. However, the difficulty of successfully executing and integrating a large transaction is almost always underappreciated. There is incredible pressure from bankers to choose M&A, and the best ones are persuasive in arguing that M&A is the best way to improve your competitiveness, enter a new market, or lower your cost base. Many chief executives love to make the big announcements and take credit for bringing the parties together. But making the deal actually work in practice falls to staff way down the chain of command, and to customers’ willingness to cope with the inevitable hiccups and delays brought about by the transaction. And the bankers are long gone by then, busy spending their bonuses and working on their next deal pitch. Be extremely skeptical about M&A. Few big tech companies have a history of doing it well.
Webscale: stop abusing privacy rights and trampling on rules and norms of fair competition
The big tech companies that make up the webscale sector tracked by MTN Consulting have been rightly abused in the press recently for their disregard for consumer privacy rights, and overly aggressive, anti-competitive practices. After years of avoiding increased regulatory oversight through aggressive lobbying and careful brand management, the chickens are coming home to roost in 2021. Public concerns about abuses of privacy, facilitation of fake news, and monopolistic or (at the least) oligopolistic behavior will make it nearly impossible for these companies to stem the increased oversight likely to come soon from policymakers.
Australia’s pending law, the “News Media and Digital Platforms Bargaining Code,” could foreshadow things to come for the webscale sector, as do recent antitrust lawsuits against Facebook and Alphabet. Given that webscale companies are supposed to be fast moving and innovative, they should get out ahead of these problems. They need to implement wholesale, transparent changes to how they treat consumer privacy and commit to (and actually follow) a code of conduct that is conducive to innovation and competition. The billionaires leading the companies may even consider encouraging fairer tax codes so that some of their excessive wealth can be spread across the countries that actually fostered their growth.
ABOUT THIS REPORT:
This report presents MTN Consulting’s first annual forecast of network operator capex. The scope includes telecommunications, webscale and carrier-neutral network operators. The forecast presents revenue, capex and employee figures for each market, both historical and projected, and discusses the likely evolution of the three sectors through 2025. In the discussion of the individual sectors, some additional data series are projected and analyzed; for example, network operations opex in the telco sector. The forecast report presents a baseline, most likely case of industry growth, taking into account the significant upheaval in communication markets experienced during 2020. Based on our analysis, we project that total network operator capex will grow from $420 billion in 2020 to $520 billion in 2025, driven by substantial gains in the webscale and (much less so) carrier-neutral segments. The primary audience for the report is technology vendors, with telcos and webscale/cloud operators a secondary audience.
References:
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January 8, 2021 Update:
Analysys Mason: Cloud technology will pervade the 5G mobile network, from the core to the RAN and edge
“Communications Service Providers (CSPs) spending on multi-cloud network infrastructure software, hardware and professional services will grow from USD4.3 billion in 2019 to USD32 billion by 2025, at a CAGR of 40%.”
5G and edge computing are spurring CSPs to build multi-cloud, cloud-native mobile network infrastructure
Many CSPs acknowledge the need to use cloud-native technology to transform their networks into multi-cloud platforms in order to maximise the benefits of rolling out 5G. Traditional network function virtualisation (NFV) has only partly enabled the software-isation and disaggregation of the network, and as such, limited progress has been made on cloudifying the network to date. Indeed, Analysys Mason estimates that network virtualisation reached only 6% of its total addressable market for mobile networks in 2019.
The telecoms industry is now entering a new phase of network cloudification because 5G calls for ‘true’ clouds that are defined by cloud-native technologies. This will require radical changes to the way in which networks are designed, deployed and operated, and we expect that investments will shift to support this new paradigm. The digital infrastructure used for 5G will be increasingly built as horizontal, open network platforms comprising multiple cloud domains such as mobile core cloud, vRAN cloud and network and enterprise edge clouds. As a result, we have split the spending on network cloud into spending on multiple cloud domains (Figure 1) for the first time in our new network cloud infrastructure report. We forecast that CSP spending on multi-cloud network infrastructure software, hardware and professional services will grow from USD4.3 billion in 2019 to USD32 billion by 2025, at a CAGR of 40%.
https://www.analysysmason.com/research/content/comments/network-cloud-forecast-comment-rma16/
Omdia: Telco AI investment starts to pick up and effect automation of network activities
According to Omdia (owned by Informa), service providers face intense pressure to transform their IT systems, operations, and processes. Telco AI investment is expected to ramp up in 2021, but there is not as much clarity as there should be around best practices and business outcomes.
Omdia’s research indicates that early 80% of service providers see the use of AI and analytics, when it comes to the automation of network activities, as an “important” or “very important” IT project for 2021. Nearly 60% of them are planning to increase investment in AI tools.
Top AI use cases are expected to include network fault prediction and prevention, automation of end-to-end life-cycle management, and the management of network slicing. AI will also support a variety of non-network use cases, including using AI to support new
business models such as contextual offer management as well as automating and personalizing customer engagement and delivering customer insights.
Let’s take automation as an example. As networks become more complex and services more difficult to manage (e.g. 5G core networks, edge computing and network slicing), Omdia emphasized that automation was becoming critical. Automation of service fulfillment and assurance and creating highly prized “closed loops” – where the need for human intervention is minimal – are usually seen as some of the main drivers for AI investment, as a way to improve operational efficiencies.
It is often said that it is crucial to consider the potential ROI (Return On Investment) before initiating an automation project. ROI is certainly a good starting point for sorting out “must have” from the “nice to have” automation project, whether looking at it from the perspective of five-year cost savings, annual operating cost, time to value, or some other indicator. However, measuring automation outcomes is more complex than it may at first seem. It is of course useful to directly compare operations costs before and after adoption of an AI-based solution, but it is not the full story. It is also important to consider the business outcomes that require prioritization. These can include improving the accuracy of a process, increasing consistency and predictability, including ensuring compliance with specific SLAs, delivering greater reliability, boosting productivity, or reducing turnaround times. The list is extensive, but to make a success of an automation project it is important not to lose sight of the end goal, and to identify those KPIs (Key Performance Indicators) which specifically support the business outcomes an organization is seeking to achieve.
An AI-driven automation also needs to be sustainable. It’s not just about having the capabilities in place to address incidents as they occur. A process automation also needs to continue to be relevant even when a network/IT element is upgraded, or a vendor swapped out.
Visibility is also essential, because to improve anything you need to be able to measure it. But how does a service provider know if they are automating more successfully than their peers? There are plenty of sources of AI-linked training and support, as well as best practice guidance and models provided by industry bodies like the TM Forum. But there is not as yet a commonly agreed methodology to assess automation in the telco space. Some vendors have internal measures, such as internal process automation indexes, but this is not the same as having an industry-wide measure.
“Cloud-native and distributed cloud architectures and the growing importance of the network edge are adding to the complexity. AI is increasingly needed because existing operations are too reactive and rely heavily on human operators to execute functions,” said Kris Szaniawski, Omdia’s practice leader of service provider transformation.
“In current stressful circumstances, service providers that provide a fragmented customer experience will be quickly punished,” warned Szaniawski, who noted that progress toward enabling omnichannel customer engagement “has not always been as advanced as it should be.”
The Omdia report concluded by by suggesting service providers should make “targeted use of AI to better orchestrate customer journeys, as well as invest in well integrated central data repositories and robust data management capabilities.”
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Separately, Liam Churchill writes that forward-thinking CSPs have focused their AI investments on four main areas:
- Network optimization
- Preventive maintenance
- Virtual Assistants
- Robotic process automation (RPA)
In these areas, AI has already begun to deliver tangible business results. AI applications in the telecommunications industry are increasingly helping CSPs manage, optimize and maintain not only infrastructure, but also customer support operations. Network optimization, predictive maintenance, virtual assistants and RPA are all examples of use cases where AI has impacted the telecom industry, delivering enhanced CX and added value for enterprises.
As Big Data tools and applications become more available and sophisticated, AI can be expected to continue to accelerate growth in this highly competitive space.
References:
https://omdia.tech.informa.com/products/service-provider-operations-it-intelligence-service
https://techsee.me/blog/artificial-intelligence-in-telecommunications-industry/
Work from Home Reality Impacts Market for New Networking Technologies
SOURCE: Bigleaf Networks
Introduction:
Hype around next generation wireless standards (e.g. WiFi6/IEEE 802.11ax, 5G: ITU-R IMT 2020.SPECS/3GPP Release 16) has become a distraction, according to Bigleaf Networks founder and CEO, Joel Mulkey. Marketers are promoting these new technologies which sacrifice reliability to push faster speeds that are mostly useless in the new work from home era.
Mulkey and Bigleaf Vice President of Product, Jonathan Petkevich, looked into the reality behind the marketing hype around 5G and WiFi 6, as well as other networking trends such as satellite networks and artificial intelligence, in a wide-ranging panel discussion hosted for the company’s customers, partners, and agents.
As IT leaders look to regain their footing in 2021, many tech conversations that were trending at the beginning of 2020 picked up where they left off, while other trends emerged. Below are selected highlights from Mulkey and Petkevich’s conversation:
The Work From Home Reality:
“If you look at some of the Stay-At-Home mandates that have happened over the course of 2020, we estimate that about 85 million people are working from home, and that’s a big shift towards where we were at the start of 2020,” said Mulkey. “Starting at about the mid-March timeframe, 88% of organizations asked employees or required employees to work from home. About 57% of the US workforce started to work from home on a regular basis. So that was a big shift towards most people working in the office, with a few people working remotely in regional or local areas. And a lot of organizations have been talking about how they’re switching to a more long-term remote work-from-home strategy.”
Adapting to this new work from home reality meant frantically moving technology to the cloud. Part of that shift meant IT and network infrastructure teams needed to revamp their networks to support the connection reliability and application performance required in this kind of new normal.
“You need to have a healthy path between the device you’re using and the cloud server, otherwise you’re not going to have a usable experience,” said Mulkey. “One of the things we’re seeing companies running into is a sudden realization that quality of connectivity is really important.”
The Danger of WiFi 6:
According to Gartner, WiFi (IEEE 802.11) is the primary high performance network technology that companies will use through 2024. Today, roughly 96% of organizations use some form of wireless technology with many of those companies looking to move to faster versions of those networking capabilities in the next couple of years. Mulkey and Petkevich say the hype is hurting companies.
“Ensuring that you have technology that’s built on the latest standards makes sense,” said Petkevich. “I don’t know that 5G or WiFi 6 are drastically changing how a business operates day-to-day. There’s a little bit of over-hype around the speed and performance and some of the promise that’s with both of these.”
“WiFi 6 is a bit misplaced in our industry’s priorities and 5G is a marketing mess,” said Mulkey. “WiFi 6 is good for really dense, high bandwidth needs. So if you have an office with 1,000 people in a small area or you’re trying to provide WiFi offload in a stadium, WiFi 6 has technologies that will help you out. But if you’re a normal person and you’ve got a house with a couple of kids and you need to make sure your WiFi doesn’t drop-out when you’re on Zoom calls, I don’t see WiFi 6 moving the needle there. In fact, I think it’s harmful. The WiFi industry has become so focused on a story of faster, faster, faster, that the pace of innovation comes at the sacrifice of reliability. What you really need is stable WiFi connectivity that doesn’t drop out, that deals really well with roaming, that has some more intelligence to the quality of connectivity rather than prioritizing speed.”
5G Hype and Rural America:
“Now, 5G is interesting because there’s some really promising stuff there,” continued Mulkey. “Imagine if you didn’t even need WiFi, you just had always-on connectivity from all your devices at say, 100 megabits a second. That was the vision cast for it. The problem is, it’s almost all hype. What you need for the really high speeds is millimeter wave connectivity, which is really only going to be available in dense urban areas. So the folks that absolutely need good 5G today in rural areas or suburban areas without good landline connectivity, are probably not gonna get that millimeter wave behavior, surely not in rural areas.”
“We really have most of the benefits, if not all of them, with 4G today, so the evolution from a 4G to 5G in these longer distance connections is minimal to nothing,” added Mulkey. “It’s just a marketing term slapped on 4G. Now, 4G has gotten better since your phone first said 4G on it, but you’re not going to magically be able to stream 3D Star Wars style holograms because your phone has a 5G icon on it. That may come some day, but it won’t be 2021.”
Satellites:
Those who have the toughest time with WAN internet connectivity are those in rural areas or suburban areas that have been abandoned by the telecom and cable operators. An area Mulkey and Petkevich see low Earth orbit satellite networks moving beyond hype.
“The issue with traditional satellites is latency,” said Petkevich. “Starlink fixes that. So it’ll be interesting to see that play out in 2021.”
Artificial Intelligence in the Network:
44% of IT decision-makers believe that AI and machine learning can help companies optimize their network performance, and more than 50% identify AI as a priority investment needed to deliver their ideal network and make things work for them.
“There are two main ways that AI is in use today. You have a consumer-facing flavor — Siri on my iPhone, or the way that Google can find me images of apples; and then you have the hidden AI that nobody knows about — the instantaneous response of a Google search, where they’ve built smart technology that would fall under the definitions of AI to make sure that your request for Google gets to the right server from the right path and gets back to you as efficiently and effectively as possible,” said Mulkey. “Those technologies are available today. The challenge is they’re not available to the everyday person. This is an area where we, ourselves, have dedicated people and resources to figure out, ‘How can we make our network behave in an autonomous manner far better than it could if there were just people controlling it?'”
“There’s a kind of a misconception that when we talk about AI, the first thought is all the wonderful movies that have come out over the years,” quipped Petkevich. “Where we are today is there’s a lot of innovation going on to make this more tangible and more practical for businesses to use on the smaller scale, and not reserve it for the large enterprises of the world, and make it more generally available. This is definitely an area where a technology is moving beyond its hype.”
About Bigleaf Networks:
Bigleaf Networks is the intelligent networking service that optimizes Internet and Cloud performance by dynamically choosing the best connection based on real-time usage and diagnostics. Inspired by the natural architecture of leaves, the Bigleaf Cloud-first SD-WAN platform leverages redundant connections for optimal traffic re-routing, failover and load-balancing. The company is dedicated to providing a better Internet experience and ensuring peace of mind with simple implementation, friendly support and powerful technology. Founded in 2012, Bigleaf Networks is investor-backed, with service across North America.
Bigleaf combines a simple on-site installation, intelligent hands-off operations, and redundancy at every level to turn commodity broadband connections into a worry-free, Enterprise-grade connection to your applications.
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