Synergy: Q3 Cloud Spending Up Over $11 Billion YoY; Google Cloud gained market share in 3Q-2022
Synergy Research estimates the cloud infrastructure market at $57B in Q3-2022. That was up by well over $11 billion from the third quarter of last year despite two fierce headwinds – historically strong U.S. dollar and a severely restricted Chinese market. The incremental spending represents year-on-year growth of 24%. If exchange rates had remained constant over the last year, the growth rate would have been over 30%. As the market continues on a strong growth trajectory,
Google is alone among the hyper-scaler giants to be gaining market share. Google Cloud increased its market share in Q3 compared to the prior quarter, while Amazon and Microsoft market shares remained relatively unchanged. Compared to a year ago all three have increased their market share by at least a percentage point. Amazon, Microsoft and Google combined had a 66% share of the worldwide market in the quarter, up from 61% a year ago. In aggregate all other cloud providers have tripled their revenues since late 2017, though their collective market share has plunged from 50% to 34% as their growth rates remain far below the market leaders.
Synergy estimates that quarterly cloud infrastructure service revenues (including IaaS, PaaS and hosted private cloud services) were $57.5 billion, with trailing twelve-month revenues reaching $217 billion. Public IaaS and PaaS services account for the bulk of the market and those grew by 26% in Q3. The dominance of the major cloud providers is even more pronounced in public cloud, where the top three control 72% of the market. Geographically, the cloud market continues to grow strongly in all regions of the world.
“It is a strong testament to the benefits of cloud computing that despite two major obstacles to growth the worldwide market still expanded by 24% from last year. Had exchange rates remained stable and had the Chinese market remained on a more normal path then the growth rate percentage would have been well into the thirties,” said John Dinsdale, a Chief Analyst at Synergy Research Group. “The three leading cloud providers all report their financials in US dollars so their growth rates are all beaten down by the historic strength of their home currency. Despite that all three have increased their share of a rapidly growing market over the last year, which is a strong testament to their strategies and performance. Beyond these three, all other cloud providers in aggregate have been losing around three percentage points of market share per year but are still seeing strong double-digit revenue growth. The key for these companies is to focus on specific portions of the market where they can outperform the big three.”
Synergy provides quarterly market tracking and segmentation data on IT and Cloud related markets, including vendor revenues by segment and by region. Market shares and forecasts are provided via Synergy’s uniquely designed online database SIA™, which enables easy access to complex data sets. Synergy’s Competitive Matrix™ and CustomView™ take this research capability one step further, enabling our clients to receive on-going quantitative market research that matches their internal, executive view of the market segments they compete in.
References:
Synergy Research: public cloud service and infrastructure market hit $126B in 1Q-2022
Cloud Computing Giants Growth Slows; Recession Looms, Layoffs Begin
Highlights of ITU-R report: IMT TERRESTRIAL BROADBAND REMOTE COVERAGE
Introduction:
Almost three years in the making (see References below), this ITU-R report on IMT TERRESTRIAL BROADBAND REMOTE COVERAGE provides details on scenarios associated with the provisioning of enhanced mobile broadband services in sparsely populated and underserved remote areas with a discussion on enhancements of user and network equipment. Mobile broadband access in rural and remote areas can be done by various existing user equipment and additionally, broadband can be delivered also by FWA (Fixed Wireless Access) type of consumer premises equipment (CPEs). It offers technical solutions for certain deployment scenarios prevailing in developing countries and is meant to be used in accordance with the existing regulations in those countries.
In many countries, national policymakers have recognized the necessity to introduce polices and solutions to ensure connectivity in underserved and remote areas.
Further challenges that limit the reach of mobile broadband in sparsely populated areas are, for example, infrastructure requirements, backhaul connectivity, operation and maintenance, sparse distribution of population and so on. However, some of the remote areas have industrial plants, excavation units and mining with temporary human occupancy or shelters, which would benefit from broadband connectivity.
Remote coverage might in the future be driven by the need for national security and public safety connectivity, intelligent traffic systems, internet of things, industry automation and end users need for home and commercial broadband services as an alternative to fiber connections. In order to fulfil the needs of remote coverage, it is important to identify viable solutions for mobile and fixed wireless broadband services.
Solutions that support remote sparsely populated areas providing high data rate coverage:
Possible technical solutions to achieve both extended coverage as well as high capacity in remote areas could be to use dual frequency bands at the same time, one lower band for the uplink (UL) and one higher band for the downlink (DL), in aggregated configurations.
Combining spectrum bands in the mid-band range (1-6 GHz) and the low-band range (below 1 GHz) on an existing grid can provide extended capacity compared to a network only using the low-band range.
An alternative technical solution to provide extended coverage in a remote area using existing or reduced number of terrestrial base station (BS) sites requires careful selection of proper locations and technical characteristics compared to configurations of suburban networks. Realizing such extended network configuration for coverage, several considerations need to be taken into account, both at a BS site and at customer premises. Considerations of accommodating BSs on high towers
in sparsely populated areas could be further studied1. Performance limitations usually arise in the uplink, arising from the handset designs : higher noise figure and, (due to regulation) limited transmission power of 23 dBm. Such large cell designs therefore typically rely on the use of external customer premises equipment (CPE) with large gain antennas, and high processing and computation power and stable power supply.
In order to extend broadband services to remote areas, IMT systems can benefit by employing high gain antennas.. One proposed solution is to use a few high-gain (up to 29.5 dBi), narrow beam x-pole antennas on a strategically placed high ground tower, where power and backhaul exist. Each of the very high gain antennas (VEGA) can cover a 15 to 35 km range, depending on deployment parameters like frequency, antenna height, ground surface and vegetation. See also in ITU-D 2021 final Report ‘Telecommunications/ICTs for rural and remote areas). The directive antennas improve the quality of service by increasing the signal-to-noise ratio (SNR) and Eb/N0 of the downlink (DL) and uplink (UL) signals.
Note 1. Such opportunities rest with traditionally high tower used for analogue or digital television with an average inter-site distance (ISD) of the order of 60 km to 80 km designed to provide blanket coverage of national terrestrial television services.
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Such very high gain multi-beam antennas provide gain, wider combined beamwidth, as well as broadband with a three-fold capacity, wherever needed. One tower implementing several high-gain beam-antennas, each providing high quality service to its dedicated target area, saves the necessity of additional building, maintaining (and guarding) several towers, each with a full BS and microwave backhaul or a fiber link. For these reasons, these antennas operate in remote sites, to cover those distant underserved communities at a shorter time.
With potential enhancements of base station (BS), user equipment (UE), and customer premises broadband configurations, it is deemed feasible to deploy a standalone network in the bands identified for IMT within the in 1-6 GHz range (see revision 6. of Recommendation ITU-R M.1036 -not yet completed/agreed) providing high capacity and coverage over tens of kilometres in remote sites. This could potentially be a promising solution for bringing IMT broadband (e.g., IMT‑2020/5G) in remote sites.
Aggregation of carriers from existing 4G LTE in low-band with 5G New Radio (NR) in the bands identified for IMT within the mid-range (~1-6 GHz) can provide such extended coverage along with capacity enhancement.
Generally, at a BS site, the antenna height, the radio frequency output power and antenna gain impact the coverage and capacity performance. Effective performance solutions are also represented by a high level of antenna sectorization, high antenna beamforming gain, and the use of Multiple Input Multiple Output (MIMO) antennas, as well as the use of carrier-aggregation. Furthermore, additional spectrum bands and bandwidth, and usage of redundant signalling protocol will improve performance.
Extending cell-coverage is limited by the uplink performance. Enhancing UE transmission capabilities is key to enabling extended coverage along with the Downlink coverage. For a fixed wireless broadband deployment in a “wireless fibre” configuration, using an outdoor directional antenna mounted line-of-sight (LOS) to the BS antenna site extends the coverage range significantly by avoiding building penetration losses. Conventional, mobile devices are UEs with power class of maximum 23 dBm transmit power. At higher carrier frequencies in the mid-band (between 1-6 GHz), a standalone network will be limited by uplink coverage than the downlink when deployed for extended coverage in remote areas. Hence, it is important to provide adequate extended coverage in the UL direction for the users located at the cell edge along with DL enhancements by using the dual band carriers in the deployment.
It is assumed that conventional IMT antenna arrangements are used for the UL system. For the DL, IMT-2020/5G bands identified for IMT within the in 1-6 GHz range, an antenna array is assumed to have 64 dual-polarized antenna elements installed on very high television towers. The considered ISD is regarded to be representative for a conventional 2G network grid. For extended coverage, adding a new band from bands identified for IMT within the 1-6 GHz range for mobile and fixed wireless broadband connectivity, networks can clearly deliver on the promise to increase on the coverage requirements for IMT-2020/5G services, but only adequately in the DL direction. This additional band also helps distribute the UL traffic through the 4G low-band at the cell-edge.
With dual bands, a very high gain antenna covering all lower bands as well as bands in 1-6 GHz enables easy implementation of the carrier aggregation, as well as strong DL on the higher bands (and good UL using the lower bands). The solutions employing a higher BS or UE power or other parameters/values different than typical deployments, should be used in accordance with the existing regulations of those countries.
Figure 1. Remote Coverage using High Gain Multi Beam Antenna
References:
ITU-R Report: Terrestrial IMT for remote sparsely populated areas providing high data rate coverage
Telecom Infra Project introduces Open FAN to promote multi-vendor interoperability
The Telecom Infra Project (TIP) has announced a new initiative for “open fixed access networks (FAN)” at the FYUZ conference in in Madrid, Spain. The Open FAN initiative is being led by Telefónica, Telecom Italia, and Vodafone. As in the mobile radio access network, the goal is to ensure products from competing vendors can be combined in the same fixed access network. That is the essence of true interoperability.
The work will focus on improving interoperability and diversity in the access network, accelerating innovation and boosting capacity in the last mile through the transition from GPON to XGS-PON. Specifically, Open FAN is targeting the link between optical line terminals (OLTs) and optical network terminals (ONTs), the boxes that sit at either end of a fiber connection. Integration with SDN controllers, the traffic cops of the network, is another priority. Open FAN has just become the latest TIP sub-group, part of the fixed access project group.
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TIPs Fixed Broadband Project Group is developing a new generation of open and disaggregated technologies that help operators increase the availability of fast and reliable broadband services across the world. The goal of the TIP fixed access sub-group is to build access networks capable of delivering high speed connectivity over the last mile. The primary objective for this group is to achieve a high degree of interoperability in the access domain, including:
- East-west interworking and integration between network elements
- Northbound integrations to OSS and network management systems
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Participants are currently drawing up technical requirements for a so-called “pizza box” OLT that can be delivered to the local telco. They will issue a request for information later this year as they assess the technical capabilities of vendors and their “readiness” for open FAN.
“The disaggregation of OLTs represents a valuable opportunity to broaden the telecom supply chain, which we’ve seen has become more important than ever during recent times,” said Paolo Pellegrini, TIM’s access innovation project manager, in telling remarks. “TIM is excited about the opportunities to work with a new generation of hardware and software suppliers who can bring innovative solutions that will help us build more cost-effective and efficient networks.”
Data from Omdia, owned by Informa, shows that just three vendors controlled 85% of the market for OLTs last year. Two of them, Huawei and ZTE, are Chinese, leaving Nokia as the only other supplier. The lack of alternatives explains why the UK government was less restrictive in fixed than it was in mobile when clamping down on Chinese vendors.
TIP probably hopes interoperability will boost competition in a market for passive optical network (PON) products worth about $8 billion in sales last year. If operators could more easily buy OLTs separately from ONTs, developers could focus resources on one area. An OLT specialist would not require an ONT capability to compete.
Today, mixing FAN products from different vendors is problematic, said a source at TIP, and Nokia seems to agree.
“It is not easy to do, but it is something that we do,” said Federico Guillén, the head of Nokia’s network infrastructure business group, during an interview at the recent Network X event in Amsterdam. “If you do this, you have to put in some rules for how the OLT and the ONT communicate and set a lower denominator, which means you are missing some features. Interoperability doesn’t come for free.”
Telecom already has an interface for connecting OLTs to ONTs, called OMCI (for ONT management control interface). But when it comes to multi-vendor interoperability, this does not seem to have delivered. “It was perfectly standardized, and everyone was implementing and following, but they were choosing different options,” said Stefaan Vanhastel, the chief technology officer for Nokia’s fixed network unit.
Nokia served about 24% of the global PON market last year, according to Omdia’s data, but has increased its presence in OLTs, according to Guillén. A backlash against Huawei in many countries outside China has probably helped. “Our market share is growing, especially where we want it to grow, which is the OLT side,” he told Light Reading. “The ONT side is a very crowded space.”
Specialists may find that challenging Nokia in the FAN is just as hard as it is in the RAN. Last year it pumped €4.2 billion (US$4.2 billion) into research and development, including investments in the silicon platforms that support higher-speed broadband services. At Network X, it announced a new OLT, branded Lightspan MF-14, that provides an upgrade path to 100G-capable networks. “Operators have a solution that will be reusable as line cards are upgraded over time,” said Julie Kunstler, chief analyst with Omdia. “This has lots of capacity and ONTs will be upgraded as needed.”
The new TIP Open FAN subgroup expects to issue an RFI to establish the technical capabilities and readiness of suppliers to deliver such a solution later in the year, with test and validation to follow.However, there was no mention of network equipment vendor support for open FAN in the TIP’s statement and without that it could struggle. If enough operators urge change, those vendors may have to budge – but the wariness of Ericsson and Nokia about open RAN illustrates just how difficult that could be. Open FAN also appears to lack an equivalent of the O-RAN Alliance, the group developing open RAN specifications. TIP has previously distanced itself from specifications development. If an alternative to OMCI is needed, who takes the lead?
Whether open FAN becomes as big a deal as open RAN is doubtful. For one thing, operators spent about $37 billion less on FAN products last year than on RAN kit, according to Omdia’s numbers. Most of their fixed-line capex goes into civil engineering, and no amount of interoperability or virtualization will save money there.
Despite the muscle of Huawei, Nokia and ZTE, the market was also growing more competitive before open FAN was a thing, according to Omdia’s Kunstler. Ciena, an optical equipment vendor based in the US, and Sterlite, an Indian firm that sells fiber-optic cable, are just two examples of companies moving into a PON market forecast to generate nearly $16 billion in annual sales by 2027.
References:
https://telecominfraproject.com/wp-content/uploads/Fixed-Access-UCD_v1.0_20220628.pdf
CableLabs to bring mobility to WiFi for a better user experience
Introduction:
CableLabs said it has developed a new technology that brings mobile, cellular-like capabilities to Wi-Fi networks. That, of course goes beyond the charter of IEEE 802.11 Working Group[1.]. CableLabs also believes its technology will enable cable operators to cut down on MVNO costs by offloading even more data to their Wi-Fi networks (this author frequently uses Xfinity WiFi when away from home for mobile Internet access).
The cable networks research organization is focusing the technology on home networks that are comprised of multiple Wi-Fi access points (APs) and extenders, but also believes the pieces are in place to support other use-cases, such as Wi-Fi network deployments in commercial buildings and the Cable Wi-Fi roaming initiative that now comprises about 4 million hotspots.
There have been many attempts to do this over the years, typically relying on coercing the device to reconnect to the new AP, but this frequently seems not to work quite right. Sometimes, there’s a lag before a device switches APs, and sometimes the device never switches APs. Or sometimes, the device insists that an AP is still present, even though it no longer is—for example, when you leave your house in your car and your phone insists it’s still connected to your home Wi-Fi.
Note 1. The IEEE 802.11™ Working Group (WG) is responsible for developing Wireless Local Area Network (WLAN) standards under the authority of the IEEE® Project 802 LAN/MAN Standards Committee (802 LMSC). The 802.11 WG is one of several WGs that comprise the Project 802 LAN/MAN Standards Committee (such as IEEE 802.3 Ethernet).
How Does CableLabs Mobile Wi-Fi Work?
CableLabs Mobile Wi-Fi uses a central controller to group multiple access points or APs (WiFi routers) into one continuous network. The central controller detects which AP your device is closest to and connects your device to that AP. If you move—for example, getting up and walking to a different room—then the controller evaluates whether you would get the best experience by staying connected to the old AP or if your experience would be better by switching to a new one. If it’s the latter, the controller moves your device to the new AP without you even noticing.
Instead of asking the phone to reconnect to a different AP, CableLabs Mobile Wi-Fi moves the network itself to the new AP. It does this using a virtual Basic Service Set, or VBSS. A VBSS is a network set up exclusively for use by one device and can be moved from AP to AP without the device disconnecting and reconnecting. This makes the transitions between APs seamless and transparent to the phone.
So now, as you walk around your house with your device, the CableLabs Mobile Wi-Fi controller is moving your VBSS such that it follows along with you, hopping from one AP to another as you go. If you wander too far and go outside the range of all your APs (like when you drive away in your car), the CableLabs Mobile Wi-Fi controller detects this, closes your connection and tears down your VBSS so that your phone immediately knows there is no longer a Wi-Fi connection. The phone will then immediately switch to cellular data.
The result is that your device will be consistently connected to the best available AP in your space. Gone will be the days of being connected to an AP across the house instead of the one right next to you. Your Wi-Fi will be better and faster.
When Can I Get It?
CableLabs Mobile Wi-Fi is not yet available to end consumers. For the next step toward a commercial implementation of CableLabs Mobile Wi-Fi, CableLabs has joined and is working with the prpl Foundation to include Mobile Wi-Fi in the open-source prplMesh implementation of Wi-Fi Alliance EasyMesh™️. Go to the prpl website for more information about prplMesh and access to the prplMesh codebase. CableLabs is also working in Wi-Fi Alliance to support Wi-Fi CERTIFIED EasyMesh.
For more information on CableLabs Mobile Wi-Fi, reach out to Steve Arendt, Principal Architect & Director, Advanced Technology Group, CableLabs.
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Steve Glennon, a distinguished technologist at CableLabs, told Light Reading that Wi-Fi has done well in new iterations to beef up physical data rates as home broadband speeds continue to climb to 1 Gbit/s and beyond. But he argues that Wi-Fi has fallen short of the mark in attempts to seamlessly connect smartphones to the best link in multiple-AP environments after the initial Wi-Fi connection is established.
“In general, phones go down the path of saying, ‘I’m connected, life is good.’ And they spend a bunch of battery and compute trying to scan and work out what’s around and when should I switch,” Glennon said. “You might be sitting right next to a Wi-Fi extender and your phone is still getting cruddy throughput. The problem is it’s associated with the main AP back in the living room of the house and in fact you’re upstairs in the bedroom sitting right next to the extender.”
Glennon said Wi-Fi roaming work around 802.11k, 802.11r, and 802.11v help to recognize this issue, but suggests they’ve not been super-successful at fixing it by giving the phone more information to help select the best AP.
Instead of putting a bunch of focus on the smartphone and requiring that device to be constantly scanning, CableLabs wants to flip things around by treating multiple APs like a mobile network. And instead of having the phone associate with a physical AP, the approach proposed by CableLabs is to create a virtual access point that moves from AP to AP without requiring the phone to know what’s going on.
CableLabs says it accomplishes that through a Virtual Basic Service Set (VBSS), which aims to virtualize the concept of an access point being a piece of hardware. The VBSS effectively is a network that is set up exclusively for use by one device and can be moved from AP to AP without the device (the smartphone, in this case) disconnecting and reconnecting.
“It’s like the binary version of the SSID [service set identifier],” Glennon explained. “It’s kind of like the magic, unique identifier for the access point. And rather than having physical access points, we virtualized the access point. You’re no longer associating with a physical access point; you’re associating with a virtual one. And because it’s virtual, we can move that virtualized access point between different pieces of hardware, without the phone even knowing … We can take the virtual access point and move it around between different physical access points.”
Glennon said the new Mobile Wi-Fi tech also has the smarts to automatically kick the phone off the Wi-Fi link if performance on the closest AP is degrading and to shift the phone to the cellular network. And when the Wi-Fi environment improves, the system will flip the phone back to Wi-Fi.
The broad aim here is to improve the customer experience when the phone connects to Wi-Fi as the user moves about. But Glennon notes there’s also some big, potential benefits to cable operators that are now in the mobile game: offloading more data on Wi-Fi and lowering MVNO costs.
“Offloading your mobile connection to Wi-Fi as frequently and as completely as possible is the best financial outcome for the cable operator who’s offering mobile service,” he said. “The whole point here is make the Wi-Fi experience be really good, because then you’ll do more Wi-Fi offload and there’s more financial benefit to our [members].”
Glennon said the project started about five years ago. The initial use case is for multiple APs in the home, but the pieces are there to extend the capability to commercial businesses and other venues where cable operators have set up Wi-Fi networks, he said.
References:
CableLabs Brings Mobile Wi-Fi’s Power to Wi-Fi Industry for a Better User Experience
https://www.lightreading.com/broadband/cablelabs-aims-to-bring-mobility-to-wi-fi-/d/d-id/781328?
https://www.ieee802.org/11/QuickGuide_IEEE_802_WG_and_Activities.htm
Juniper Research: 5G Fixed Wireless Access to Generate $2.5 Billion in Operator Revenue by 2023
Global telco revenues from 5G Fixed Wireless Access (FWA) will rise from $515 million in 2022 to $2.5 billion next year, according to a new report from Juniper Research. FWA includes services that provide high-speed Internet connectivity through cellular‑enabled CPE (Customer Premises Equipment) for uses including broadband and IoT networks.
The research predicts that operators’ 5G FWA revenue will reach $24 billion globally by 2027. It identified the consumer market as the sector generating the highest revenue for network operators, representing 96% of global 5G FWA revenue. However, it warns that operators must provide a compelling user proposition for FWA solutions through the bundling of services such as video streaming, gaming and smart home security to enrich user experience and gain competitive advantage against incumbent high‑speed connectivity technologies, such as FTTP (Fibre‑to‑the‑Premises).
| Key Market Statistics | |
| Market size in 2022: | $515m |
| Market size in 2023: | $2.5bn |
| 2022 – 2027 Market Growth: | 480% |
Juniper Research author Elisha Sudlow-Poole remarked: “The benefits of FWA are now comparable with services using fibre-based networks. Operators have an immediate opportunity to generate revenue from broadband subscriptions directly to end users by providing last-mile solutions underpinned by their existing 5G infrastructure.”
Juniper Research notes that the increase in 5G subscribers will be driven mainly by “the accelerating migration of cellular subscriptions to 5G networks, owing to operator strategies that minimize or remove any premium over existing 4G subscription offerings,” and that 600 million additional 5G subscriptions are expected be created next year, “despite the anticipated economic downturn in 2023.”
The report predicts that the growth of 5G networks will continue, and over 80% of global operator‑billed revenue will be attributable to 5G connections by 2027. The telecommunications industry demonstrated its robustness against the impact of the COVID-19 pandemic, and the report forecasts that the growth of 5G will also be resilient against this economic downturn due to the vital importance of mobile Internet connectivity today.
Juniper Research co-author Olivia Williams noted: “Despite the growth of the Internet of Things, revenue from consumer connections will continue to be the cornerstone of 5G operator revenue increase. Over 95% of global 5G connections in 2027 will be connected personal devices such as smartphones, tablets and mobile broadband routers.”
Private 5G Networks Represent a Key Opportunity for Operators:
In addition, the report predicts that the ability of standalone 5G networks to offer ‘network slicing’ will act as the ideal platform for the growth of 5G private network revenue. 5G Standalone (SA) uses 5G core networks supporting network slicing technology, which can be used to take a ‘slice’ of public 5G infrastructure and provide it to private network users. In turn, this helps mitigate the cost of private 5G network hardware and increase its overall value proposition, all against a background of deteriorating macro-economic conditions.
The report recommends that operators use 5G FWA to facilitate the last mile-solution by treating the relationship between FWA and fibre networks as wholly collaborative to maximize network performance and return on investment.
References:
https://www.juniperresearch.com/whitepapers/how-operators-will-capitalise-on-5g-fixed-wireless
5G Service Revenue to Reach $315 Billion Globally in 2023 | TelecomTV
Chile’s Entel to sell fiber optic assets for $358 million to ON*NET Fibra
Chilean telecoms giant Entel (which this author consulted for in 2002 and 2005) said on Saturday it would sell the assets of its fiber optic business, which provides services to homes, to local company ON*NET Fibra (?) in a deal worth $358 million.
The sale, led by investment banks BNP Paribas, Santander and financial adviser Scotiabank, is subject to approval by Chile’s economic regulator, expected in the first half of 2023.
Entel and ON*NET Fibra signed an agreement as part of the deal that will enable Entel to continue offering internet services for residences on ON*NET’s network, Entel said in a statement.
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“By selling our network, rather than leaving the fixed market, we are increasing coverage rapidly to offer our internet services to the home at efficient costs and without the need to invest the sums required for a fiber deployment with this coverage,” the statement added.
Following the closing of this transaction, ON*NET Fibra is expected to reach more than 4.3 million homes in 2024. Entel has operations in Chile and Peru and has more than 20 million mobile subscribers.
Source: ON*NET Fibra
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References:
A Tale of two Telcos: AT&T up (fiber & mid-band 5G); VZ down (net income falls; cost-cutting coming)
AT&T said on Thursday that it added 708,000 postpaid cellular end point connections, a metric investors use to measure the strength of a cellular carrier’s main profit center. For the third consecutive quarter, the tally easily topped forecasts of Wall Street analysts, who had been expecting 552,300 connections in the third quarter. AT&T executives said their core wireless business overshot their expectations during the third quarter, driving higher revenue and profits despite lingering worries about inflation.
“We’re in a much better place than the broader economy,” finance chief Pascal Desroches said in an interview. The company raised its targets for profit and core wireless revenue this year.
AT&T said that it has added more than 2.2 million wireless subscribers through three quarters, which it said it expected to top rivals.
Wireless-service revenue climbed 5.6%, an improvement the company attributed to rate increases, roaming fees and customer upgrades to premium plans. AT&T now expects full-year wireless service revenue to reach the high end of its previously forecast 4.5% to 5% growth range.
AT&T also added 338,000 customers to its fiber-optic network in the third quarter up from year ago additions of 289,000. That left AT&T with a fiber base of 6.93 million.. Chief Executive John Stankey said building new fiber optic lines remains a priority for the company.
Source: AT&T Q3 2022 earnings presentation
AT&T’s fiber strategy is driving average revenue per user (ARPU) upward. AT&T’s fiber ARPU for Q3 clocked in at $62.62, up from $58.17 in the year-ago period. Its general broadband ARPU in Q3 hit $58.63, up from $55.16 a year ago.
AT&T added another 500,000 fiber locations in Q3, extending its total to 18.5 million. Though the analysts at New Street Research thought that build cadence was a bit weak (they’ve been expecting AT&T to pass a fiber build rate exceeding 1 million per quarter this year), AT&T CEO John Stankey said on today’s earnings call that the company remains on track to achieve a target of 30 million-plus fiber locations by the end of 2025.
AT&T’s fiber penetration in Q3, at 37%, was unchanged even as the company continues to build out and light up more fiber locations. Stankey stressed that AT&T has been able to hit penetration rates of 30% “relatively quickly” with fiber, but acknowledged that the “next 20% takes a little bit longer.”
“I think the biggest change that’s occurred and penetration is how quickly we’re getting to the 20% level, versus historic numbers,” Stankey said. “But we’ve not made any assumption that once you hit that 30% level that the back end is going to go any faster.”
AT&T said it expects an adjusted full-year per-share profit of at least $2.50 from its continuing operations, a few cents higher than previously expected. And the company said its free cash flow, projected around $14 billion this year, should grow in 2023.
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In sharp contrast, Verizon (the largest U.S. cellular carrier in terms of subscribers) reported a net gain of 8,000 phone connections under postpaid billing plans during the September quarter, a sign that recent rate increases had prompted many of its most reliable customers to leave the service.
Verizon’s overall net income, excluding profits from interests in non-controlling entities, fell nearly 24% to $4.9 billion in the September quarter. Higher overhead costs and interest expenses contributed to the weaker earnings, though the company’s adjusted profit still topped Wall Street analysts’ expectations, according to data from FactSet.
Verizon also said its consumer business lost 189,000 wireless retail postpaid connections. That was offset by Verizon’s business unit, which added 197,000 postpaid phone connections, giving the operator a total of 8,000 net new wireless connections.
Finance chief executive Matt Ellis said in an interview that the improving profitability in Verizon’s core wireless business showed that its strategy was pointing it in the right direction. Many subscribers were paying their bills on time and upgrading to more expensive plans over the past quarter despite signs of stress in the broader economy, he added.
“We can continue to bring customers in and step them up to grow revenue” with more full-featured plans, Ellis said. “If there’s opportunities to increase pricing, we obviously won’t be shy about doing that,” he added.
Verizon ended a four-year, $10 billion cost-cutting program last year, but has just started another one. The company revealed a new cost-cutting program on Friday that executives said will save $2 billion to $3 billion a year by 2025. The company didn’t detail how the initiative would trim expenses or how many, if any, jobs the move would affect.
“To further mitigate inflation impacts, we’ve started a new cost-savings program that we expect will provide a reduction in annual costs of $2-3 billion by 2025,” explained Verizon CFO Matt Ellis during the operator’s Q3 2022 conference call Friday. “This program will be focused on several areas in the business, including digitalization efforts to enhance the customer experience and streamlining internal operations with automation and process enhancements.”
Verizon’s headcount has declined from around 155,000 in 2017 to just 118,000 last year.
Verizon said it now covers 160 million people with its speedy C-band network, and expects to expand that number to 200 million in the first quarter of next year.
In contrast, AT&T said it is on track to cover 130 million people with its own midband 5G network by the end of this year, far ahead of the company’s initial projections.
During Verizon’s quarterly earnings call, CEO Hans Vestberg reiterated the company’s broad profit strategy: to gain new customers and to encourage existing customers to spend more money with the carrier. Specifically, he said Verizon is working to “step up” customers into more expensive service plans by offering goodies like streaming video subscriptions and faster 5G services.
Along those lines, Vestberg said 81% of Verizon’s customer base now subscribes to an unlimited data plan, and that 42% have selected one of its “premium” unlimited plans. He added that 60% of Verizon’s new customers selected a premium unlimited plan.
References:
https://www.wsj.com/articles/verizon-vz-q3-earnings-report-2022-11666355231
TIP launches Metaverse-Ready Networks Project Group
The Telecom Infra Project (TIP) has formed a new project group that, it says “addresses one of the central topics in today’s telecommunications industry, metaverse-ready networks… The TIP Metaverse-Ready Networks Project Group’s primary objective is to accelerate the development of solutions and architectures that improve network readiness to support metaverse experiences.”
Meta Platforms, Microsoft, T-Mobile US, Telefónica and Sparkle will be the initial co-chairs of the project group.
Alex Harmand, head of network platforms at Telefónica and co-chair of the new group, stated: “This new group will enable operators to address the exciting opportunities that the metaverse is creating in both the consumer and enterprise segments. Telefónica is looking forward to collaborating to define the network capabilities and associated APIs needed to enhance metaverse services. The TIP community is the perfect environment for this initiative as it will allow us to leverage multiple current project groups, such as OpenWIFI, OpenRAN, Open Optical and Packet Transport, to deliver end-to-end architectures and solutions that we will then test in Telefónica’s and other TIP Community Labs.”
Ron Marquardt, Vice President of Advanced Technologies & Innovation at T-Mobile said: “As one of the major upcoming revolutions in the telco industry, the metaverse has to be built through industry collaboration. We want to encourage other CSPs, technology makers and content creators to join us in this journey.”
Rashan Jibowu, Product Manager at Meta Platforms and Co-Chair of the MRN Project Group said: “The metaverse is the next chapter of the internet. In the early stages of its development, it’s critical that we work together as an industry to determine what it means for networks to be “metaverse-ready,” and what we need to do collectively to get there. We look forward to collaborating with the TIP community to lay this important groundwork and build toward our common goal of bringing the metaverse to life.”
Fabio Panunzi Capuano, Executive Vice President Business Development at Sparkle and Co-Chair of the MRN Project Group said: “The telecom industry will act as a key enabler for the metaverse by providing the performing network architectures and services that will support growing bandwidth requests and quality of experience generated by new business models. The Metaverse-Ready Networks Project Group, as one voice of the industry, has the challenging task to define new connectivity requirements supporting the end-to-end metaverse experience and Sparkle, with its assets and experience, is at the forefront in cooperating to shape the future.”
Ricardo Villarreal, Director of Product Management at Microsoft, Azure for Operators and Co-Chair of the MRN Project Group said: “The metaverse might be in a nascent state, but it is imperative to start building today the networks needed to realize the promise of a complete convergence of our physical and digital lives. Cross-industry collaboration is the only way to achieve this.”
The Project Group will be hosting its first open doors session at Fyuz in Madrid Oct 25-27th.
TIP Launches Metaverse-Ready Networks Project Group – Telecom Infra Project
Reliance Jio’s “Home Grown” 5G? Ericsson and Nokia in multi-year deals with Jio to build a mega 5G network
What ever happened to “Home Grown 5G” at Reliance Jio? Over two years ago, Jio Chairman Mukesh Ambani said his company had developed its own 5G solution “from scratch.”
“Jio plans to launch “a world-class 5G service in India…using 100% home grown technologies and solutions,” he said in a statement at the Reliance Industries annual shareholders meeting. “Once Jio’s 5G solution is proven at India-scale, Jio Platforms would be well-positioned to be an exporter of 5G solutions to other telecom operators globally, as a complete managed service,” he added.
–>Since then we haven’t heard anything about Jio’s indigenously built 5G network. Jio has not disclosed whose network equipment is being used for its current 5G roll-out in India which started this month.
In stark contrast, telecom equipment vendors Ericsson and Nokia have signed separate multi-year deals with Reliance Jio to build a mega 5G network. The announcements neither divulged the deal sizes or time frames. They came amid large network deployments across India for 5G services.
- Swedish telecom gear maker Ericsson announced a long-term strategic 5G contract with Reliance Jio to roll out a 5G standalone (SA) network in the country.
- Finland headquartered Nokia will supply Reliance Jio, which has more than 420 million customers, with 5G radio access network (RAN) equipment in a multi-year deal, the Finnish company said in a statement.
Announcing the partnership with Ericsson, Akash Ambani, Chairman, Reliance Jio, says: “We are delighted to partner with Ericsson for Jio’s 5G SA rollout. Jio transformed the digital landscape in India with the launch of LTE services in 2016. We are confident that Jio’s 5G network will accelerate India’s digitalization and will serve as the foundation for achieving our nation’s ‘Digital India’ vision.”
Ericsson’s 5G RAN products and solutions from Ericsson Radio System and E-band microwave mobile transport solution will be deployed in the 5G network for Jio, the equipment company said. This is the first partnership between Jio and Ericsson for radio access network deployment in the country, according to the previously referenced press release.
Ericsson recently topped the Frost Radar™: Global 5G Network Infrastructure Market ranking for second year in a row. Ericsson was also named a Leader in the 2022 Magic Quadrant for 5G Network Infrastructure for Communications Service Providers report by Gartner. The Company invests around 18 percent of global revenue in R&D and holds the leading patent portfolio in the industry, with more than 60,000 granted patents worldwide. It is also the holder of the most 5G essential patents.
“Nokia will supply equipment from its AirScale portfolio, including base stations, high-capacity 5G Massive MIMO antennas, and Remote Radio Heads to support different spectrum bands, and self-organizing network software,” the company said. Nokia has a long-standing presence in India. This new deal will mean that Nokia is now supplying India’s three largest mobile operators.
Pekka Lundmark, President and CEO at Nokia stated: “This is a significant win for Nokia in an important market and a new customer with one of the largest RAN footprints in the world. This ambitious project will introduce millions of people across India to premium 5G services, enabled by our industry-leading AirScale portfolio. We are proud that Reliance Jio has placed its trust in our technology and we look forward to a long and productive partnership with them.”
5G data speeds in India are expected to be about 10 times faster than those of 4G, with the network seen as vital for emerging technologies like self-driving cars and artificial intelligence. Reliance snapped up airwaves worth $11 billion in a $19 billion 5G spectrum auction in August and had launched 5G services in select cities. It is also working with Alphabet Inc’s Google to launch a budget 5G smartphone. As India’s telecom service providers roll out 5G services, the government is also pushing top mobile phone manufacturers, like Apple Inc, Samsung and others to prioritise rolling out software upgrades to support 5G, amid concerns that many of their models are not ready for the high-speed service. The Reliance-Nokia deal comes at a time some gover nments, including India, have either banned or discouraged the use of China’s Huawei in national networks.
“Jio is committed to continuously investing in the latest network technologies to enhance the experience of customers,” Akash Ambani, chairman of Reliance Jio, said. Meanwhile, Jio is planning to raise an additional $1.5 billion via external commercial borrowings to fund its 5G capital expenditure plans, reports said. ABP Pvt. Ltd.
Analysts said the 5G rollout in the country would be much slower than 4G or 3G as the main revenue for the service would be generated from enterprise solutions. Indian telco deals with the equipment makers are meant for areas where enterprises would demand the service. Retail consumers will be wary of paying a higher price just for speed, they said.
References:
https://www.jio.com/5g-banner-3.jpg
Reliance Jio claim: Complete 5G solution from scratch with 100% home grown technologies
AT&T Launching a dozen 5G “Edge Zones” across the U.S.; Seeking Federal Funds for Fiber Optic Network Expansion
AT&T is expanding its 5G standalone (SA) core network through “edge zones” that can more quickly connect to cloud service providers including Microsoft Azure, Amazon Web Services (AWS), and Google Cloud Platform (GCP).
AT&T CTO Jeremy Legg noted in a blog post that the carrier currently has 10 of these edge zones up and running across the U.S., with plans to add at least two more of these “localized 5G network capabilities” before the end of the year. Many more will follow in 2023 and beyond.
These edge zones are powered by AT&T’s regional 5G SA network cores and are located near connection points that can quickly access cloud service provider data centers. Legg explained AT&T will explore different options on how to make the edge zones accessible to developers, either through stores operated by hyperscale companies or SDKs.
The edge zones are based on three key elements:
- Local standalone network cores
- Local public cloud or private data center computing resources
- Software-defined network capabilities and virtualized network functions
AT&T commenced work on edge networks in 2021, when it previewed a network in conjunction with Microsoft Azure.
Alongside its SA 5G network, AT&T is employing local public cloud and private data centre resources, and software-defined network elements in its edge zones. It situated the capabilities in data centres close to facilities with connections to nearby cloud providers including Microsoft Azure, Google Cloud and AWS.
An AT&T representative told Mobile World Live that Equinix is providing the cross-connect capabilities. Legg noted the edge zones enable AT&T to offer customised managed services. “It’s an exciting time for us. We’re at the dawn of a new age of killer apps almost everywhere you look,” he concluded.
Jeremy Legg, AT&T CTO
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Separately, Bloomberg reports that AT&T is counting on U.S. government stimulus grants to help fund its fiber optic buildout. The telco wants small towns to use federal economic recovery money to pay it to provide landline high-speed internet to rural and remote areas.
Evansville, Indiana is a showcase for how AT&T is working with local governments to reach people with little or no internet access. While Indiana is part of AT&T’s 21-state telecommunications service region, the company will soon announce a widening expansion into markets outside its traditional territory, according to people familiar with the plan who didn’t want to tip off competitors before the announcement. The first was Mesa, Ariz., where AT&T promised to deliver fiber connections to a market where it had offered only wireless service. That marked the first move in decades outside its existing footprint.
AT&T CEO Stankey’s seven-hour, six-stop tour in Indiana was focused on a public-private partnership, one of several in the region for AT&T. The contract with Vanderburgh County calls for the company to put $29.7 million toward building out fiber networks that will serve superfast broadband to at least 20,000 homes and businesses. An additional $9.9 million will come from the county’s American Rescue Plan money, an injection of federal funds to help with recovery from the Covid-19 pandemic.
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References:
https://www.att.com/es-us/sdabout/blogs/2022/legg-5g-edge-zones.html