Omdia
Omdia: China’s 5G network co-sharing + cloud will create growth opportunities for Chinese service providers
After building the world’s largest 5G network with 2.3 million 5G base stations by the end of 2022, China is on track add over 600,000 5G base stations and reach 2.9 million by the end 2023, according to new Omdia market research (owned by Informa). A key milestone in terms of China’s co-building and co-sharing 5G networks recently took place in May 2023, through the 5G network collaboration between all the four service providers in China. Under the organization and guidance of the Ministry of Industry and Information Technology (MIIT), the four major mobile operators in China – China Mobile, China Telecom, China Unicom, and China Broadnet, jointly announced the launch of what they claimed as the world’s first 5G inter-network roaming service trial. The service enables customers to access other telecom operators’ 5G networks and continue using 5G services when outside the range of their original operators’ 5G network.
Ramona Zhao, Research Manager at Omdia said: “Omdia expects inter-network roaming to improve operators’ 5G network coverage particularly in rural areas. Driven by better 5G network coverage, 5G will overtake 4G’s leading position and become the largest technology in China’s mobile market by 2026. By the end of 2028, we anticipate 5G will account for 65.1% of the total mobile subscriptions (including IoT connections).”
An advertisement for 5G mobile service at Shanghai Pudong International Airport. Image Credit: DIGITIMES
Omdia deems China as a 5G pioneer in terms of many areas, including technology innovation, network deployment, and 5G use cases. Driven by the increasing 5G adoption, Chinese service providers’ mobile service revenue and reported mobile (non-IoT) ARPU have all achieved year-on-year (YoY) growth in 2022. China Telecom reported an increase of 3.7% in its mobile service revenue; China Unicom‘s mobile service revenue saw a YoY increase of 3.6%; while China Mobile’s mobile service revenue also increased by 2.5% YoY.
Owing to the digital transformation demand from various state-owned enterprises, cloud services are also considered a growing business for Chinese service providers.
“Omdia recommends that Chinese service providers innovate more applications through the integration of cloud and the 5G network. This will be vital to enable the digital transformation of various industries and the acquisition of new revenue streams,” concludes Zhao.
According to a previous GSMA report, dubbed “The Mobile Economy China 2023”, 5G technology will add $290 billion to the Chinese economy in 2030, with benefits spread across industries.
“Mainland China is the largest 5G market in the world, accounting for more than 60% of global 5G connections at the end of 2022. With strong takeup of 5G among consumers, the focus of operators is now increasingly shifting to 5G for enterprises. This offers opportunities to grow revenues beyond connectivity in adjacent areas such as cloud services – a segment where operators in China have recently made significant progress,” the GSMA report reads.
5G will overtake 4G in 2024 to become the dominant mobile technology in China, according to the report. “4G and 5G dominance in China means legacy networks are now being phased out. While most users have been migrated to 4G and 5G, legacy networks continue to support various IoT services. However, some estimates suggest that legacy networks could be almost entirely shut down in China by 2025,” the study reads.
Chinese vendor Huawei Technologies has secured over half of a major contract to deploy 5G mobile base stations for local carrier China Mobile, according to recent reports by Chinese media.
Huawei obtained over 50% of the total of China Mobile’s centralized procurement program in 2023.
The report also stated that Huawei will provide 5G base stations for different frequency bands. The bands ranging from 2.6 GHz to 4.9 GHz will have around 63,800 stations, divided into two projects, while the number of base stations to operate in the 700 MHz band will be 23,100, divided into three projects. ZTE was the second-biggest winner in terms of base stations, followed by Datang Mobile Communications Equipment, Ericsson and Nokia Shanghai Bell.
References:
Omdia: China Mobile tops 2023 digital strategy benchmark as telcos develop new services
Telecom operators around the world are embracing digital transformation and developing services in new sectors (beyond connectivity) to facilitate that megatrend. Omdia’s Service Provider Digital Strategy Benchmark report, which scores the digital strategies of 12 major global operator, identified the leaders as: China Mobile, SK Telecom, NTT DoCoMo, and Deutsche Telekom. With telecom operators all making a fair amount of noise about digital transformation, it’s useful to have a way of ranking their efforts and cutting through the marketing hype.
China Mobile scored 27.5 points out of a maximum of 35. It scored so highly due to the scale at which it has deployed high-speed broadband and subsequently used that infrastructure as platform to develop new services, Omdia explained.
“East Asian operators account for three of the top-four places in the benchmark, demonstrating that service providers in the region are among the most advanced in the world. China Mobile is showing a particularly impressive speed of change, with digital transformation services now accounting for more than 25% of service revenues,” said Dario Talmesio, Research Director, Service Provider Strategy & Regulation, at Omdia. “China Mobile is rapidly turning itself into a TechCo operator with an array of digital services beyond connectivity,” he added.
China Mobile reported a 30% year-on-year increase in digital transformation revenue for full-year 2022 to 207.6 billion yuan (US$29 billion), while overall telecommunications services revenues came in at CNY812.1 billion ($114 billion), up by 8.1%.
The China state owned telco itself attributed the growth in digital transformation revenue to “the rapid expansion of 5G applications, mobile cloud, digital content, smart home and other businesses,” and talked up its “remarkable results” in that area. “These services have become a key growth driver contributing to a more balanced, stable and healthy overall revenue structure,” it said in its annual results announcement.
SK Telecom’s position at number two in the ranking is based on its drive to reinvest itself as an AI company and its work to develop services in areas including the metaverse and urban air mobility, Omdia said.
When SK Telecom chief executive took the reins just over 18 months ago, he outlined plans to drive a 20% revenue hike between 2020 and 2025 essentially by transforming the telco into an AI and digital infrastructure company. Amongst other things, that meant turning the firm’s ifland metaverse into an open platform, and a year later the telco was able to announce that its metaverse platform had gone global.
It is working with a number of other operators on metaverse content and technology, including Singtel and NTT DoCoMo, the latter also performing well on digital transformation. Fairly generally, Omdia talks up DoCoMo’s strength in technology and digital services.
Omdia also picks out e& – the operator formerly known as Etisalat – for particular mention. The United Arab Emirates-based telco group ranks fifth in the benchmark.
“e&’s strong showing is based on its new strategy, unveiled in early 2022, of transforming itself into a global technology and investment group—a strategy that it is pursuing vigorously,” said Matthew Reed, Chief Analyst, Service Provider Markets, at Omdia.
The UAE telco reorganised itself under four pillars. The first covers its existing telecoms operations, but the second and third, E& life and e& enterprise, are responsible for new digital services and experiences in the consumer and business markets respectively. The fourth is about investment. The firm made many headlines with its decision to adopt e& as its new brand; the rebrand arguably overshadowed the strategic shift. But with that ampersand essentially standing for all the new sectors in addition to telecoms – next-gen technologies, digital experiences, financial services, the cloud, IoT, AI and so forth – it does make sense, and clearly e& is doing something right to find itself scoring 22 in the Omdia benchmark.
Bharti Airtel is ranked seventh in the 2023 benchmark, up from ninth place in 2022 following Airtel’s launch of 5G in India in late 2022 and as Airtel continues to develop its sizeable portfolio of digital services.
ABOUT OMDIA:
Omdia, part of Informa Tech, is a technology research and advisory group. Our deep knowledge of tech markets combined with our actionable insights empower organizations to make smart growth decisions.
References:
https://telecoms.com/522182/east-asian-telcos-ahead-on-digital-transformation/
Omdia: Consumer Telco Opportunity Challenged by Global Tech Giants
Omdia Surveys: PON will be a key part of network operator energy reduction strategies
Omdia forecasts weaker 5G market growth in near term, 4G to remain dominant
Omdia and Ericsson on telco transitioning to cloud native network functions (CNFs) and 5G SA core networks
Big 5 Event: wireless connectivity use cases for healthcare, network slicing, security and private networks
Emerging use cases for wireless telecommunications technology was discussed at the Big 5G event in Austin, TX last week in a panel session titled, “Future connectivity use cases and the Holy Grail: Private networks, metaverse, 6G and beyond.” The questions addressed included:
- Who is monetizing private networks and what are we learning from their experiences?
- Should telcos move past targeting only large enterprise customers for 5G services?
- When will the metaverse take off?
- How are telcos gearing up for 6G and what are the expectations?
Jodi Baxter, vice president for 5G and IoT connectivity at Telus, described the numerous emerging applications of 5G in healthcare. One example is a connected ambulance project carried out with Alberta Health Services, where, thanks to 5G, doctors can remotely issue authorizations necessary for stroke medication, which needs to be administered within a narrow time window.
Some of the applications developed for the healthcare sector can also be included in telcos’ offerings to corporate customers. Baxter said Telus has included remote doctor and nurse consultations in 5G bundles for small businesses, which can help their staff retention rates. Healthcare companies are also looking at more specific applications, with Baxter citing the example of a healthcare company that would wish to track hip and knee replacements with 5G.
While sustainability is often seen as an unprofitable endeavor, Baxter argued technology can help customers see a return on investment. One of Telus’s projects in this area uses drones and 5G for reforestation.
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Omdia’s research has shown that about a fifth of midsized to large enterprises “want to invest in 5G network slicing in the next two years, but most people cannot find a commercial offer,” said Camille Mendler, chief analyst of enterprise services at Omdia. “[It’s] not there yet, which is a problem, right?” she added. Note that 5G network slicing requires a 5G SA core network, which most 5G service providers have yet to deploy.
Baxter noted that network slicing will be a game changer for security and transportation of critical data. The panel pointed to autonomous vehicles as another potential application that will require its own slice. She also said slicing will be important for ensuring applications from private 5G networks also have a macro capability.
Lori Thomas, senior vice president for strategic engagement and transformation at MetTel, pointed out that a lot of government agencies are currently looking to bring specific functionalities from the private network onto the public network, and make them accessible in edge devices such as laptops and tablets.
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William Britton, vice president for information technology and CIO at California Polytechnic State University, said it is not always easy to figure out how products offered by telecom companies apply to specific use cases. The university has been told to “go elsewhere” by providers when it has approached them about possible 5G applications, as the solutions on offer did not meet requirements, he said.
Speaking about the particular needs of his university, he highlighted the significant demand for bandwidth during limited events, such as course registration, as well as ad hoc scenarios like high data throughput during online gaming events.
A big concern for universities in general is cybersecurity. Britton points out that the education sector has become a massive target for cyberattacks, such as malware and ransomware. Indeed, research suggests that attacks on educational organizations grew by 44% in 2022, while data from endpoint protection firm Emsisoft suggests that the number of individual schools impacted by ransomware attacks also grew.
Security is a major priority for organizations everywhere, not just in the education sector. Thomas points to IoT, where vast amounts of data travel at high speeds, which is particularly attractive for bad actors. Once 5G can be coupled with blockchain, she noted, data security will improve.
One way to look at specific use cases is through innovation labs, with Thomas saying in the short term these can accelerate the time to revenue. She pointed to MetTel’s partnership with SpaceX and VMware, which saw the latter company’s software-defined wide area network deployed over Starlink to bring high-bandwidth communications to remote areas.
Thomas also said demand for more bandwidth was one of the key trends in the public sector. Customers are, according to her, looking at technologies including 5G fixed wireless access (FWA) and satellites to secure it.
A lot of innovation has focused on private networks, but the “real money” lies outside of them, said Mendler. No further details were provided.
Omdia’s Camille Mendler says companies cannot find commercial network slicing.
Source: JLeitner Photography
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References:
Omdia Surveys: PON will be a key part of network operator energy reduction strategies
Omdia (owned by Informa) surveys have found a “very high” number of telcos regarded PON as a key part of their energy savings programs. Omdia’s chief analyst Julie Kunstler said PON technology is fiber-asset efficient, easy to upgrade, and highly secure.
Speaking at a Light Reading webinar Thursday, Kunstler said another large cohort of network operator execs said they believed PON would play some role in their energy reduction strategies. “PON is energy efficient and this is definitely gaining attention.” Kunstler said “a very strong movement” by operators was underway toward next gen PON, in particular XGS PON. “But perhaps more importantly, PONs are also supporting other types of customers and applications.” She also noted PON technology was fiber-asset efficient, easy to upgrade, highly secure and allowed operators to choose when to upgrade. But she cautioned that in many telcos PON faced organizational obstacles because of the belief that it was for consumer services only and because of the silos between residential and business.
Anuradha Udunuwara, a senior enterprise solutions architect at Sri Lanka Telecom, said energy costs had become a bigger concern in the past 12 months following sharp hikes in power tariffs. He agreed that PON “definitely has an advantage… it is passive, so there is no energy consumption there.”
Udunuwara described PON as an “architectural option” that could support FTTX deployment. He said it was a myth about PON that it was for FTTH only. “It’s not confined to any of the variations of FTTX.” He expected that in the long run services would converge on to a single access technology.
“Oftentimes, sales and marketing teams don’t feel comfortable about PON, simply because they don’t understand it,” Kunstler said. “Many believe its point to multipoint topology is for residential only and that it’s simply best effort and there’s no technical ability to support enterprise services.”
“A lot of education is needed within some operators to explain to the sales and marketing team that PON is not just best effort and that you can actually commit to rates,” she pointed out.
“Not all enterprises need point to point. They don’t all need their own dedicated fiber, and many of them really don’t want to have to pay for dedicated fiber.”
Kunstler said selling business services over PON increased the ROI over that access infrastructure. “With 10G PON, you can easily support one gig symmetrical, two gig symmetrical five gig symmetrical and so forth, and 50 GPON, which will be here within a couple of years, can even support more bandwidth.
By using that optical distribution network for more than just residential, operators were already moving to a converged access approach. “You have more revenues over a single access network. You have a single network to upgrade. You have improved optics and you have improved energy savings.”
References:
Dell’Oro: XGS, 25G, and Early 50G PON Rollouts to Fuel Broadband Spending
AT&T to deploy FTTP network based on XGS-PON in Amarillo, TX
ZTE PON ONT obtains EasyMesh R3 certification from WiFi Alliance
Dell’Oro: PONs boost Broadband Access; Total Telecom & Enterprise Network Equipment Markets
Omdia forecasts weaker 5G market growth in near term, 4G to remain dominant
Multiple factors have slowed down the transition to 5G such as lower handset sales driven by cost-of-living crisis and inflation, poor network coverage, low performance gain perception, and lack of 5G specific applications. Furthermore, an increasing portion of mobile connections – approximately 30% – are not handsets and will be slower to convert to 5G (e.g., IoT, connected tablets/laptops, wearables).
Omdia Senior Market Forecaster, Garinder Shankrowalia, said: “5G subscription reporting in 2022 has led us to reduce our 2023 forecast by 7.2% -approximately 150 million subscriptions. We anticipate the industry will regain this loss from 2025, once global market conditions are improved.”
Omdia believes it is important for mobile operators to continue investing in next generation mobile networks to enable the application emergence and the overall digital economy to grow. However, having multiple cellular technologies running concurrently on mobile networks is having an adverse effect on operators whereby launching 5G increases complexity and cost for little return in the short term.
Omdia Research Director Ronan de Renesse said: “There needs to be a ‘net-zero’ approach to network development, removing the old as the new gets deployed. Operators are already starting to move capital from next generation network deployment to 3G decommission projects and digital transformation. Key stakeholders should remain realistic about the prospects for 5G and re-evaluate the business case before moving on to the next step.”
Omdia forecasts 5G will account for 5.9 billion subscriptions in 2027 equivalent to a population penetration of 70.9%.
Another Opinion: 5G Fails to Deliver on Promises and Potential
5G is a big letdown and took a “back seat” at CES 2023; U.S. national spectrum policy in the works
Omdia and Ericsson on telco transitioning to cloud native network functions (CNFs) and 5G SA core networks
Introduction:
Telco cloud has evolved from the much hyped (but commercially failed) NFV/Virtual Network Functions or VNFs and classical SDN architectures, to today’s more robust platforms for managing virtualized and cloud-native network functions that are tailored to the needs of telecom network workloads. This shift is bringing many new participants to the rapidly evolving telco cloud [1.] landscape.
Note 1. In this instance, “telco cloud” means running telco network functions, including 5G SA Core network on a public, private, or hybrid cloud platform. It does NOT imply that telcos are going to be cloud service providers (CSPs) and compete with Amazon AWS, Microsoft Azure, Google Cloud, Oracle Cloud, IBM, Alibaba and other established CSPs. Telcos gave up on that years ago and sold most of their own data centers which they intended to make cloud resident.
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In its recent Telco Cloud Evolution Survey 2022, Omdia (owned by Informa) found that both public and private cloud technology specialists are shaping this evolution. In July 2022, Omdia surveyed 49 senior operations and IT decision makers among telecom operator. Their report reveals their top-of-mind priorities, optimism, and strategies for migrating network workloads to private and public cloud.
Transitioning from VNFs to CNFs:
The existing implementations of telco cloud mostly take the virtualization technologies used in datacenter environments and apply them to telco networks. Because telcos always demand “telco-grade” network infrastructure, this virtualization of network functions is supported through a standard reference architecture for management and network orchestration (MANO) defined by ETSI. The traditional framework was defined for virtual machines (VMs) and network functions which were to be packaged as software equivalents (called network appliances) to run as instances of VMs. Therefore, a network function can be visualized as a vertically integrated stack consisting of proprietary virtualization infrastructure management (often based on OpenStack) and software packages for network functions delivered as monolithic applications on top. No one likes to admit, but the reality is that NFV has been a colossal commercial failure.
The VNFs were “lift & shift” so were hard to configure, update, test, and scale. Despite AT&T’s much publicized work, VNFs did not help telcos to completely decouple applications from specific hardware requirements. The presence of highly specific infrastructure components makes resource pooling quite difficult. In essence, the efficiencies telcos expected from virtualization have not yet been delivered.
The move to cloud native network functions (CNFs) aims to solve this problem. The softwardized network functions are delivered as modern software applications that adhere to cloud native principles. What this means is applications are designed independent of the underlying hardware and platforms. Secondly, each functionality within an application is delivered as a separate microservice that can be patched independently. Kubernetes manages the deployment, scaling, and operations of these microservices that are hosted in containers.
5G Core leads telcos’ network workload containerization efforts:
The benefits of cloud-native are driving telcos to implement network functions as containerized workloads. This has been realized in cloud native 5G SA core networks (5G Core), the architecture of which is specified in 3GPP Release 16. A key finding from the Telco Cloud Evolution Survey 2022, was that over 60% of the survey respondents picked 5G core to be run as containerized workloads. The vendor ecosystem is maturing fast to support the expectations of telecom operators. Most leading network equipment providers (NEPs) have built 5G core as cloud-native applications.
Which network functions do/will you require to be packaged in containers? (Select all that apply):
This overwhelming response from the Omnia survey respondents is indicative of their growing interest in hosting network functions in cloud environments. However, there remain several important issues and questions telcos need to think about which we now examine:
The most challenging and frequent question is whether telcos should run 5G core functions and workloads in public cloud (Dish Network and AT&T) or in their own private cloud infrastructure (T-Mobile)? The choice is influenced by multiple factors including understanding the total cost of running network functions in public vs private cloud, complying with data regulatory requirements, resilience and scalability of infrastructure, maturity of cloud platforms and tools, as well as ease of management and orchestration of resources across distributed environments.
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Ericsson says the adoption of cloud-native technology and the new 5G SA Core network architecture will impact six strategic domains of a telco network, each of which must be addressed and resolved during the telco’s cloud native transformation journey: Cloud infrastructure, 5G Core, 5G voice, automation and orchestration, operations and life cycle management, and security.
In the latest version of Ericsson’s cloud-native 5G Core network guide (published December 6, 2022), the vendor has identified five key insights for service providers transitioning to a cloud native 5G SA core network:
- Cloud-native transformation is a catalyst for business transformation. Leading service providers make it clear they view the transformation to cloud-native as a driver for the modernization of the rest of their business. The company’s ability to bring new products and solutions to market faster should be regarded as being of equal importance to the network investment.
- Clear strategy and planning for cloud-native transformation is paramount. Each individual service provider’s cloud-native transformation journey is different and should be planned accordingly. The common theme is that the complexity of transforming at this scale needs to be recognized, and must not be underestimated. For maximum short-and-long-term impact tailored, effective migration strategies need to be in place in advance. This ensures that investment and execution in this area forms a valuable element of an overall transformation strategy and plan.
- Frontrunners will establish first-mover advantage. Time should be a key factor in driving the plans and strategies for change. Those who start this journey early will be leading the field when they’re able to deploy new functionalities and services. A common frontrunner approach is to start with a greenfield 5G Core deployment to try out ideas and concepts without disrupting the existing network. Additionally, evolving the network will be a dynamic process, and it is crucial to bring application developers and solution vendors into the ecosystem as early as possible to start seeing faster, smoother innovation.
- Major potential for architecture simplifications. The standardization of 5G Core has been based on architecture and learnings from IT. The telecom stack should be simplified by incorporating cloud native principles into it – for example separating the lifecycle management of the network functions from that of the underlying Kubernetes infrastructure. While any transformation needs to balance both new and legacy technologies, there are clear opportunities to simplify the network and operations further by smart investment decisions in three major areas. These are: simplified core application architecture (through dual-mode 5G Core architecture); simplified cloud-native infrastructure stack (through Kubernetes over bare-metal cloud infrastructure architecture); and Automation stack.
- Readiness to automate, operate and lifecycle manage the new platform must be accelerated. Processes requiring manual intervention will not be sufficient for the levels of service expected of cloud-native 5G Core. Network automation and continuous integration and deployment (CI/CD) of software will be crucial to launch services with agility or to add new networks capabilities in line with advancing business needs. Ericsson’s customer project experience repeatedly shows us another important aspect of this area of change, telling us that the evolution to cloud-native is more than a knowledge jump or a technological upgrade – it is also a mindset change. The best platform components will not deliver their full potential if teams are not ready to use them.
Monica Zethzon, Head of Solution Area Core Networks, Ericsson said: “The time is now. Service providers need to get ready for the cloud-native transformation that will enable them to reach the full potential of 5G and drive innovation, shaping the future of industries and society. We are proud to be at the forefront of this transformation together with our leading 5G service providers partners. With this guide series we want to share our knowledge and experiences with every service provider in the world to help them preparing for their successful journeys into 5G.”
Ericsson concludes, “The real winners of the 5G era will be the service providers who can transform their core networks to take full advantage of what 5G Standalone (SA) and cloud-native technologies can offer.”
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Omdia says another big challenge telcos need to manage is the fragmentation in cloud-native tools and approaches adopted by various technology providers. Again, this is nothing new as telcos have faced and lived through similar situations while evolving to the NFV era. However, the scale and complexity are much bigger as network functions will be distributed, multi-vendor, and deployed across multiple clouds. The need for addressing these gaps by adopting clearly defined specifications (there are no standards for cloud native 5G core) and open-source projects is of utmost importance.
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References:
Overcoming the challenges telcos face on their journey to containerized network functions
https://omdia.tech.informa.com/OM023495/Telco-Cloud-Evolution-Survey–2022
https://www.ericsson.com/en/news/2022/10/ericsson-publishes-the-cloud-native
https://www.t-mobile.com/news/network/t-mobile-lights-up-standalone-ultra-capacity-5g-nationwide
Dell’Oro: Secure Access Service Edge (SASE) market to hit $13B by 2026; Gartner forecasts $14.7B by 2025; Omdia bullish on security
The secure access service edge (SASE) market is expected to triple by 2026, exceeding $13 billion, representing a very healthy CAGR, according to a new forecast by Mauricio Sanchez, Research Director at the Dell’Oro Group. The report further divides the total SASE market into its two technology components, Security Service Edge (SSE) and SD-WAN with SSE expected to double the SD-WAN revenue for SASE. The report further breaks down the SSE market into FWaaS, SWG, CASB, and ZTNA.
Sanchez wrote in a blog post:
“Today, enterprises are thinking differently about networking and security. Instead of considering them as separate toolsets to be deployed once and infrequently changed, the problem and solution space is conceptualized along a continuum in the emerging view. The vendor community has responded with a service-centric, cloud-based technology solution that provides network connectivity and enforces security between users, devices, and applications.
SASE utilizes centrally-controlled, Internet-based networks with built-in advanced networking and security-processing capabilities. By addressing the shortcomings of past network and security architectures and improving recent solutions—in particular, SD-WAN and cloud-based network security—SASE aims to bring networking and security into a unified service offering.
While the networking technologies underpinning SASE are understood to be synonymous with well-known SD-WAN, the security facet of SASE consists of numerous security technologies, such as secure web gateway (SWG), cloud access security broker (CASB), zero-trust network access (ZTNA), and firewall-as-a-service (FWaaS). Recently, a new term, security services edge (SSE), emerged to describe this constellation of cloud-delivered network security services that is foundational in SASE.”
As noted above, Dell’Oro divides the total SASE market into two technology components: Security Service Edge (SSE) and SD-WAN with SSE. Security features such as Firewall-as-a-Service (FWaaS), Secure Web Gateway (SWG), Cloud Access Security Broker (CASB) and Zero Trust Network Access (ZTNA) fall under the umbrella of SSE, according to Dell’Oro. In addition, Dell’Oro predicts that the security component to SASE “will increasingly be the driver and lead SASE’s SSE to exhibit over twice the growth of SASE’s SD-WAN.”
Dell’Oro’s Sanchez wrote, “We see SASE continuing to thrive independent of the ongoing macro-economic uncertainty as enterprises strategically invest for the new age of distributed applications and hybrid work that need a different approach to connectivity and security. We anticipate that security will increasingly be the driver and lead SASE’s SSE to exhibit over twice the growth of SASE’s SD-WAN.”
Additional highlights from SASE and SD-WAN 5-Year Forecast Report:
- Within SSE, Secure Web Gateway (SWG) and Cloud Access Security Broker (CASB) are expected to remain the most significant revenue components over the five-year forecast horizon, but Zero Trust Network Access (ZTNA) and Firewall-as-a-Service (FaaS) are estimated to flourish at a faster rate.
- Unified SASE is expected to exceed disaggregated SASE by almost 6X.
- Enterprise access router revenue is expected to decline at over 5 percent CAGR over the forecast horizon.
Dell’Oro expects that under the umbrella of SSE, Secure Web Gateway and Cloud Access Security Broker will continue as the most significant revenue components over the five-year forecast horizon. However, Zero Trust Network Access and Firewall-as-a-Service are expected to grow at a faster rate.
Unified SASE, which Dell’Oro qualifies as the portion of the market that delivers SASE as an integrated platform, is expected to exceed disaggregated SASE by almost a factor of six over the next five years. The disaggregated type is defined as a multi-vendor or multi-product implementation with less integration than unified type. Dell’Oro also predicts that enterprise access router revenue could decline at over 5% CAGR by 2026.
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Gartner has a more optimistic forecast of SASE revenue, predicting the market to reach $14.7 billion as early as 2025. “Gartner predicts that global spending on SASE will grow at a 36% CAGR between 2020 and 2025, far outpacing global spending on information security and risk management,” reported VentureBeat last month. According to Gartner, top SASE vendors include Cato Networks, Fortinet, Palo Alto Networks, Versa Networks, VMware and Zscaler.
These disparate predictions could be a result of the nascent nature of the SASE market, a convergence of networking and security services coined by Gartner in 2019. To address the varying definitions for SASE and resulting confusion on the part of enterprise customers, industry forum MEF plans to release SASE (MEF W117) standards this year. MEF started developing its SASE framework in 2020 to clarify service attributes and definitions. (See MEF adds application, security updates to SD-WAN standard and MEF’s Stan Hubbard on accelerating automation with APIs.)
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Omdia’s [1.]research also shows security is a major driver for SASE adoption, according to Fernando Montenegro, senior principal analyst with Omdia. “Our own research indicates that end-user organizations value secure web browsing use cases (SWG, CASB, browsing isolation) particularly as they go further into their deployments of SASE projects,” said Montenegro in an email to Light Reading.
Note 1. Omdia and Light Reading are owned by Informa in the UK
Security is critical for organizations in what Omdia calls the age of “digital dominance” and by how the “demands on security teams – both in terms of time and expertise – make the delivery of security functionality via a services model particularly attractive,” Montenegro said.
SASE services also provide “good performance characteristics” when compared to enterprises utilizing their own VPN headends, and especially when hybrid work continues to be popular, added Montenegro.
References:
Total SASE Market to Nearly Triple by 2026, According to Dell’Oro Group
https://start.paloaltonetworks.com/gartner-2022-report-roadmap-for-sase-convergence.html
Omdia: Enterprise edge services market to hit $214 billion by 2026
According to a new report by Informa’s Omdia, revenue from edge services (where EXACTLY is the edge?) will reach $214 billion by 2026. That’s more than double the current size of the enterprise edge services market, which will reach $97.0 billion in 2022, says Omdia. With a compound annual growth rate (CAGR) of 20.4%, North America is predicted to dominate with 41% of global revenue share between 2021 and 2026.
This Omdia report discusses the latest global enterprise edge services forecast including edge consulting, integration, network, security, storage/compute and managed edge services considering use cases, verticals and edge deployment models.
Enterprise edge services forecast by region, 2021-26 ($ billions)
Source: Omdia (owned by Informa)
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While hyperscalers build out edge access points and systems integrators (SIs) design consulting and professional services for edge use cases, enterprises are looking to service providers to define business cases, run pilot projects and scope out different approaches to edge computing use cases, according to Omdia.
The Informa owned market research group outlines two main consumption models for edge services.
- In one model, enterprises will need consulting, systems integration and other support services to deploy physical edge infrastructure.
- The second method is a cloud-based, as-a-service and fully managed approach, where services provided by hyperscalers and independent software vendors (ISVs) are extended to the edge using local access points or gateways.
Omdia sees several opportunities for network providers to assist enterprises with the challenges that arise from implementing their edge strategies. The firm notes that telcos can help enterprises navigate data location and management considerations; regulatory compliance; network considerations such as the need for and availability of 5G, WAN/LAN and private networks; selecting the right edge setup and location; balancing use of internal skills with managed edge services; defining clear business cases; and more.
Edge consulting services from SIs, telcos, ICT solutions vendors and consulting firms form the largest part of the enterprise edge services market at 39.3% in 2022, says Omdia. While cybersecurity and network management subscriptions from service providers are critical to edge service packages, these subscription-based telco services are declining over time, the research group adds.
However, fully managed, cloud-delivered edge services, including multi-access edge computing (MEC) and workload and database management, are increasing in popularity. Omdia predicts that edge storage and compute services will be the strongest area of growth, with the services emerging as cloud services extensions to the edge provided by major hyperscalers, service providers and data center operators.
“As data volumes continue to grow and enterprises aim to move more workloads to the edge, they require more compute and storage capacity in the form of IaaS and PaaS at edge access points,”Omdia explained.
Edge locations will also shift from customers’ premises (53% in 2022 and 38% in 2026) to PoPs (point of presence) such as cloud access points and to a lesser extent, data centers.
“By 2026, over a third of edge services revenues will be realized as part of PoP deployments, which provides key opportunities and challenges for ICT service providers,” says Omdia.
Emerging edge use cases
Edge use cases initially took flight in industrial applications and IoT use cases for worker safety, automated production lines, mining and logistics, explains Omdia. Over the next five years, the largest vertical forecasted to lead growth in edge services is the financial market, which could use AI-based analytics and cognitive systems for business decisions, market insight, risk assessment and customer service platforms.
Source: Omdia
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Additional edge service use cases, which network operators could deliver as managed services, include smart meters for energy use and environmental monitoring; transport and container tracking; customer behavior analytics in retail; network efficiency; and data protection compliance and cybersecurity.
What applications do enterprises expect to run at the edge?
Omdia recommends several approaches for service providers, SIs, hyperscalers and ICT solutions vendors to consider when working with enterprises on edge services. Suggestions include developing vertical and workload-specific edge services that can be largely replicated to different customers, creating innovation hubs for edge solutions to test edge setups with customers, developing consulting services and creating a partner ecosystem to reduce vendor lock-in for customers.
References:
https://omdia.tech.informa.com/OM024012/Enterprise-Services-at-the-Edge–Forecast-202226
The Amorphous “Edge” as in Edge Computing or Edge Networking?
Multi-access Edge Computing (MEC) Market, Applications and ETSI MEC Standard-Part I
IBM says 5G killer app is connecting industrial robots: edge computing with private 5G
ONF’s Private 5G Connected Edge Platform Aether™ Released to Open Source
Omdia: Big increase in Gig internet subscribers in 2022; Top 25 countries ranked by Cable
Global gigabit internet subscriptions are expected to increase to 50 million in 2022, more than doubling from 24 million at the end of 2020, according to a new report from market research firm Omdia (owned by Informa).
The Omdia report states that accelerated fiber deployments are helping to drive an increase in gigabit connectivity.
“Demand for reliable broadband is set to drive growth in gigabit services, with fiber playing a key role,” said Peter Boyland, principal analyst, broadband at Omdia.
“There were fewer than 620 million fiber subscriptions globally at the end of 2020, but we expect these to grow to 719 million in 2022, or 62% of total subscriptions.” The majority of fiber internet subscribers are expected to be in China.
However, Omdia warns that service providers must “carefully consider market demand” for their gigabit strategies and make targeted investments in fiber.
“Service providers need to carefully plan and execute gigabit network rollout, analyzing a number of factors, including infrastructure challenges, market competition, and expected demand,” writes Omdia. “But this does not stop with network rollout – operators need to continually monitor potential competitors and constantly innovate, refresh, and build service offerings so they stay ahead of rivals.”
The analysts also point out the opportunity for vendors in the market who can help service providers build “future proof” networks. “Vendors can offer long-term solutions such as monitoring and automation tools to extend the operator/vendor relationship beyond network rollouts,” the report recommends.
Of course, what matters most to consumers is reliable service. According to Omdia’s Digital Consumer Insights survey, 36% of respondents said they were more reliant on broadband services during COVID-19, and 55% of respondents said reliability ranked top among the most important home broadband features.
All of this gigabit and fiber growth will impact broadband speeds for years to come. According to Omdia:
“In 2020, just 2% of broadband subscriptions were more than 1Gbps, but this is expected to double to 4% in 2022.”
–>See table below for the 25 countries with the fastest AVERAGE internet speeds, ranked by Cable. Note that none of them is close to 1Gbps.
The report says that subscribers with access to 500 Mbit/s-1 Gbit/s will increase from 15% in 2020 to 21% in 202, with 17% of broadband subscriptions projected to reach speeds over 1 Gbit/s by 2026.
While high-bandwidth entertainment like augmented and virtual reality (AR/VR) and gaming were thought to be the main drivers for ever-faster home broadband speeds in pre-pandemic times, Omdia’s report doesn’t think they are significantly important for gigabit Internet growth, referring to them just once as “other drivers.”
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Internet comparison site Cable has ranked the countries with the fastest broadband internet in the world based on over 1.1 billion speed tests across 224 countries and territories.
“The acceleration of the fastest countries in the world has finally plateaued this year as they reach FTTP pure fibre saturation. Increases in speed among the elite performers, then, can be attributed in greater part to uptake in many cases than to network upgrades. Meanwhile, though the countries occupying the bottom end of the table still suffer from extremely poor speeds, 2021’s figures do indicate that the situation is improving,” said Dan Howdle of Cable.
Here are the 25 countries with the fastest download speeds:
| 1 | Jersey | JE | WESTERN EUROPE | 274.27 |
| 2 | Liechtenstein | LI | WESTERN EUROPE | 211.26 |
| 3 | Iceland | IS | WESTERN EUROPE | 191.83 |
| 4 | Andorra | AD | WESTERN EUROPE | 164.66 |
| 5 | Gibraltar | GI | WESTERN EUROPE | 151.34 |
| 6 | Monaco | MC | WESTERN EUROPE | 144.29 |
| 7 | Macau | MO | ASIA (EX. NEAR EAST) | 128.56 |
| 8 | Luxembourg | LU | WESTERN EUROPE | 107.94 |
| 9 | Netherlands | NL | WESTERN EUROPE | 107.30 |
| 10 | Hungary | HU | EASTERN EUROPE | 104.07 |
| 11 | Singapore | SG | ASIA (EX. NEAR EAST) | 97.61 |
| 12 | Bermuda | BM | NORTHERN AMERICA | 96.54 |
| 13 | Japan | JP | ASIA (EX. NEAR EAST) | 96.36 |
| 14 | United States | US | NORTHERN AMERICA | 92.42 |
| 15 | Hong Kong | HK | ASIA (EX. NEAR EAST) | 91.04 |
| 16 | Spain | ES | WESTERN EUROPE | 89.59 |
| 17 | Sweden | SE | WESTERN EUROPE | 88.98 |
| 18 | Norway | NO | WESTERN EUROPE | 88.67 |
| 19 | France | FR | WESTERN EUROPE | 85.96 |
| 20 | New Zealand | NZ | OCEANIA | 85.95 |
| 21 | Malta | MT | WESTERN EUROPE | 85.20 |
| 22 | Estonia | EE | BALTICS | 84.72 |
| 23 | Aland Islands | AX | WESTERN EUROPE | 81.31 |
| 24 | Canada | CA | NORTHERN AMERICA | 79.96 |
| 25 | Belgium | BE | WESTERN EUROPE | 78.46 |
It is the fourth year of the assessment and the latest ranking uses data collected in the 12 months up to 30th June 2021 to evaluate internet speed by country.
References:
https://www.cable.co.uk/broadband/speed/worldwide-speed-league/
Omdia and IDC: Samsung regains lead in global smartphone market
The global smartphone market climbed 28.1% year on year to reach total shipments of 351.1 million units in the first quarter of 2021, according to preliminary data from Informa owned Omdia. That gain consolidates the smartphone market’s recent recovery after it posted its first annual growth since Q3 2019 in the final quarter of 2020. However, Omdia said 2021 is set to be a year of transition with Huawei’s role continuing to change, LG exiting the market and a severe semiconductor shortage affecting sales.
Samsung took over the top spot from Apple in the first 3 months of 2021, shipping 76.1 million units, up 29.2 percent year on year, to reach 22 percent of the market. The company was able to increase shipments by 22.8 percent from Q4 2020 thanks in part to an early update to the Galaxy S line as well as the launch of its latest range of devices in the A series.
Apple followed its blockbuster Q4 2020 with another significant year on year growth of 46.5% to reach 56.4 million units shipped in the quarter, equivalent to 16% of the market, followed in third place by Xiaomi with 14% after shipping 49.5 million units, up 78.3% year on year.
Two more Chinese smartphone brands – Oppo and Vivo – continue to battle for fourth and fifth place in the global rankings and remain tied on 11 percent of the market. Vivo shipped 38.2 million units, just above the 37.8 million units Oppo shipped in Q1.
Year on year, Vivo grew shipments by 95.9 percent and Oppo by 85.3 percent, as they overtook Huawei, which slipped out of the top 5 global smartphone OEM ranking after shipping 14.7 million units, some 70 percent less than in Q1 2020, not including the 3.6 million units shipped by its sub-brand Honor, which is now an independent entity.
Top 10 Shipments per manufacturer
| Rank | OEM | 1Q21 | 4Q20 | 1Q20 | QoQ | YoY | |||
| Shipment (m) | M/S | Shipment (m) | M/S | Shipment (m) | M/S | ||||
| 1 | Samsung | 76.1 | 22% | 62.0 | 16% | 58.9 | 21% | 22.8% | 29.2% |
| 2 | Apple | 56.4 | 16% | 84.5 | 22% | 38.5 | 14% | -33.3% | 46.5% |
| 3 | Xiaomi | 49.5 | 14% | 47.2 | 12% | 27.8 | 10% | 4.9% | 78.3% |
| 4 | vivo | 38.2 | 11% | 34.5 | 9% | 19.5 | 7% | 10.7% | 95.9% |
| 5 | Oppo | 37.8 | 11% | 34.0 | 9% | 20.4 | 7% | 11.1% | 85.3% |
| 6 | Huawei | 14.7 | 4% | 33.0 | 9% | 49.0 | 18% | -55.5% | -70.0% |
| 7 | Motorola | 12.6 | 4% | 9.8 | 3% | 5.5 | 2% | 28.6% | 128.1% |
| 8 | Realme | 11.4 | 3% | 14.3 | 4% | 6.1 | 2% | -20.3% | 86.9% |
| 9 | Tecno | 8.2 | 2% | 7.7 | 2% | 3.5 | 1% | 6.5% | 133.4% |
| 10 | LG | 6.8 | 2% | 8.4 | 2% | 5.4 | 2% | -18.9% | 26.2% |
| Others | 41.3 | 12% | 46.4 | 12% | 41.1 | 15% | -11.0% | 0.6% | |
| Total | 353.0 | 100% | 381.8 | 100% | 275.7 | 100% | -7.5% | 28.1% | |
Gerrit Schneemann, principal analyst at Omdia commented: “The smartphone market continues to show resiliency in the face of multiple challenges. The global component supply shortage is looming large over the market. On the other hand, two well-known smartphone brands will disappear from the global smartphone market this year, in Huawei and LG, opening the door for other brands to reach new markets and buyers.”
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Separately, International Data Corporation (IDC) said that the smartphone market accelerated in the first quarter of 2021 (1Q-2021) with 25.5% year-over-year shipment growth.
According to preliminary data from the (IDC) Worldwide Quarterly Mobile Phone Tracker, smartphone vendors shipped nearly 346 million devices during the quarter. The strong growth came from all regions with the greatest gains coming from China and Asia/Pacific (excluding Japan and China). As the two largest regions globally, accounting for half of all global shipments, these regions experienced 30% and 28% year-over-year growth, respectively.
“The recovery is proceeding faster than we expected, clearly demonstrating a healthy appetite for smartphones globally. But amidst this phenomenal growth, we must remember that we are comparing against one of the worst quarters in smartphone history,1Q20, the start of the pandemic when the bulk of the supply chain was at a halt and China was in full lockdown,” said Nabila Popal, research director with IDC’s Worldwide Mobile Device Trackers. “However, the growth is still very real; when compared to two years ago (1Q19), shipments are 11% higher. The growth is coming from years of repressed refresh cycles with a boost from 5G. But above all, it is a clear illustration of how smartphones are becoming an increasingly important element of our everyday life – a trend that is expected to continue as we head into a post-pandemic world with many consumers carrying forward the new smartphone use cases which emerged from the pandemic.”
As the smartphone market is recovering, a major shift is happening in the competitive landscape. Huawei is finally out of the Top 5 for the first time in many years, after suffering heavy declines under the increased weight of U.S. sanctions. Taking advantage of this are the Chinese vendors Xiaomi, OPPO, and vivo, which all grew share over last quarter landing them in 3rd, 4th, and 5th places globally during the quarter with 14.1%, 10.8%, and 10.1% share, respectively. All three vendors are increasing their focus in international markets where Huawei had grown its share in recent years. In the low- to mid-priced segment, it is these vendors that are gaining the most from Huawei’s decline, while most of the high-end share is going to Apple and Samsung. Samsung regained the top spot in 1Q21 with impressive shipments of 75.3 million and 21.8% share. The new S21 series did well for Samsung, mainly thanks to a successful pricing strategy shaving off $200 from last year’s flagship launch. Apple, with continued success of its iPhone 12 series, lost some share from their very strong holiday quarter but still shipped an impressive 55.2 million iPhones grabbing 16.0% share.
“While Huawei continues its decline in the smartphone market, we’ve also learned that LG is exiting the market altogether,” said Ryan Reith, program vice president with IDC’s Worldwide Mobile Device Trackers. “Most of LG’s volume was in the Americas with North America accounting for over 50% of its volume and Latin America another 30%. Despite the vendor losing ground in recent years, they still had 9% of the North America market and 6% of Latin America. Their exit creates some immediate opportunity for other brands. With competition being more cutthroat than ever, especially at the low-end, it is safe to assume that 6-10 brands are eyeing this share opportunity.”
| Top 5 Smartphone Companies, Worldwide Shipments, Market Share, and Year-Over-Year Growth, Q1 2021 (shipments in millions of units) | |||||
| Company | 1Q21 Shipment Volumes | 1Q21 Market Share | 1Q20 Shipment Volumes | 1Q20 Market Share | Year-Over-Year Change |
| 1. Samsung | 75.3 | 21.8% | 58.4 | 21.2% | 28.8% |
| 2. Apple | 55.2 | 16.0% | 36.7 | 13.3% | 50.4% |
| 3. Xiaomi | 48.6 | 14.1% | 29.5 | 10.7% | 64.8% |
| 4. OPPO | 37.5 | 10.8% | 22.8 | 8.3% | 64.5% |
| 5. vivo | 34.9 | 10.1% | 24.8 | 9.0% | 40.7% |
| Others | 94.1 | 27.2% | 103.0 | 37.4% | -8.7% |
| Total | 345.5 | 100.0% | 275.2 | 100.0% | 25.5% |
| Source: IDC Quarterly Mobile Phone Tracker, April 28, 2021 | |||||
Notes:
- Data are preliminary and subject to change.
- Company shipments are branded device shipments and exclude OEM sales for all vendors.
- The “Company” represents the current parent company (or holding company) for all brands owned and operated as a subsidiary.
- Figures represent new shipments only and exclude refurbished units.
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Closing Comment:
“Globally, the top five vendors combined took a 76% market share in Q1 2021, up from 71% a year ago. Chip shortages and supply side constraints did not have a significant impact in Q1 among the top 5 brands,” said Linda Sui, senior director, Strategy Analytics. Samsung’s newly launched A series 4G and 5G phones, and the earlier launched Galaxy S21 series combined drove solid performance in the quarter. Xiaomi maintained strong momentum in both India and China, and the expansion in Europe, Latin America and Africa region also started to bear fruit.
Note: Strategy Analytics said the global smartphone shipments were 340 million units in Q1 2021, up over 24% (year-on-year) representing the highest growth since 2015. The smartphone market rebound was driven by the healthy demand of consumers with aging devices and a phenomenal 5G push from Chinese smartphone vendors.
References:
https://omdia.tech.informa.com/pr/2021-apr/global-smartphone-market-grows-28
https://www.idc.com/getdoc.jsp?containerId=prUS47646721
https://www.idc.com/tracker/showproductinfo.jsp?containerId=IDC_P8397