Mobile World Congress Los Angeles 2021 was the first in-person industry event for neXt Curve in 20 months. It felt good to be out of the house. Expectations for the massive turnouts of yesteryear were duly subdued given that the global COVID-19 pandemic is still in effect. Nevertheless, the smaller scale was a welcome introduction back to what we can hope is a return to normal. For the operators in the Americas, it looks like the pandemic has meant back to a pre-pandemic mindset. Back to connectivity.
Smaller scale meant more engaging conversations with some of the companies we wanted to talk to and a much easier time managing what is typically an ever morphing schedule on site. Our interactions were with executives at the newly minted Rakuten Symphony, Qualcomm, Intel, Cognizant, Microsoft, Parallel Wireless, Dell Technologies, and more. We learned as much from the companies that were present as we did from those that decided not to show up.
This year, GSMA Intelligence invited me to sit on their analyst wrap up panel held on the 28th of October. I was joined by Peter Jarich, Head of GSMA Intelligence, Ken Rehbehn of Critical Communications Insights, Emma Mohr-McClure of Global Data, moderated by Ronny Haraldsvik, CMO of Cohere Technologies. We had an engaging discussion on our key impressions of the event and key takeaways and thoughts on trending themes that have floated to the top of industry discourse during the year. Here are my reflections the the 9 questions we were fielded in our panel discussion:
QUESTION 1: What was the ONE big announcement that caught your eye?
For me, the Symware announcement by Rakuten Symphony was the most eye-catching reveal. While Tareq Amin initially introduced Symware as a new edge appliance for the RAN it is much more. He floated the idea of a RAN as a Service which is essentially an infrastructure as a service play. Now that Rakuten Mobile has become somewhat of a customer of Rakuten Symphony, this pioneering internal customer will prove out the hardware and the concept for Rakuten Symphony as it eyes taking this RAN as a Serivce concept globally to operators.
Then there was the announcement of the Verizon and Amazon Kuiper collaboration. Amazon has yet to put its LEO constellation up, so the reveal was largely theatrics but emblematic of the UTB or Under the Bottom trend that we wrote about several years ago as we examined converged IT/CT trends in the ICT industry and cited in our technology futures study for Ofcom.
QUESTION 2: What was the biggest disappointment?
One of the glaring issues is that the industry continues to grapple with a broad absence of substantial ideas on how to monetize the 5G network. The industry is still at a very hypothetical level in treating this essential question. It could very well be the case that there isn’t a huge monetization opportunity given that American operators seem to be throttling back their 5G aspirations and returning to their traditional stomping ground of providing and managing pipes. This trend is concerning and represents a significant backtracking of ambition in the Americas at the least.
QUESTION 3: Has the industry done enough to convince consumers that 5G provides them with new and compelling services?
No. Despite much marketing fanfare, the 5G networks have not yet achieved the compelling level of maturity or quality coverage for consumers to really experience more value. The reality is that 5G will not inspire the killer consumer app. The killer app will compel operators to expand the network much like the iPhone data plan did for AT&T in the 4G era.
In my assessment, the killer capability for operators is uplink. It will enable new innovations that were not possible before. We need it now anyway if critical industrial IoT is supposed to be a thing. At the moment, the mindset of the mobile industry is largely fixed on eMBB priorities. While Release 16 introduced some of the first industrial-grade features, the question still stands, how will Release 18 and 5G Advanced priorities line up to drive the focus on the uplink?
In the meantime, investing in anticipation of the 5G killer app will show up if you build the network first is foolhardy at best. For the moment, the 5G killer app for the operator is network and operational modernization. For the time being, operators will have to start and settle with that until the killer app comes along. It will be interesting to see if I change my perspective in Barcelona next year. It is very clear that the industry really needs to do its homework. Pitching abstractions is not going to cut it.
QUESTION 3: Do we believe $600-1000 for new 5G phones will drive or stifle adoption even with trade in offers?
No. Qualcomm and other modem and SOC firms have made 5G smartphones possible at most price points. 5G on a mid-tier or basic-tier handset have been available for consumers for more than a year. Today, Oppo offers several 5G phones below $300. Smartphone pricing is not a barrier. Consumers are more concerned about disappointing service quality and coverage where peak lab results set their expectations for 5G. These early performance and quality deficits threaten to delay the end market innovation that the industry expected to come along with 5G network deployments.
What does adoption mean anyway? Is adoption rate a meaningful metric of “success”? At the moment handset OEMs are trying to offer future-proof devices without charging more for 5G features. We are not seeing notable uplifts in ARPU among operators except in certain markets where the uplift cannot be clearly or fully attributed to 5G upgrades. Furthermore, perceived 5G adoption does not connote that handset users are doing anything more with their 5G phones other than racking up their data usage running SpeedTest to test the speed of their provider’s 5G network. If 5G can’t prove to be more than what LTE Advanced networks can deliver it has no meaning until it does.
QUESTION 4: Are we seeing enough being done by vendors and operators to address growing security concerns?
The security tools that are available are great and only getting better. Operators will always feel that they are not doing enough. They will never be able to ally growing cybersecurity and privacy concerns nor fend off their networks and businesses from a growing range of threats and attacks. Going forward operators need to be cautious about pressing too hard on the Agile pedal. Not everything is conducive or appropriate for Agile.
Operators need to have the “right” criteria for how they develop, configure and integrate applications and functions to deliver a new service. They also need to keep a close eye out on their CI/CD pipelines. DevSecOps without the Sec is just a problem waiting to happen. This is a caution that I have for operators and vendors who are trying to drive telecom cloud-native modernization by going overboard with Agile.
QUESTIONS 5: Operators expect to use 5G as an opportunity to introduce open technologies into their networks, by WHEN do you think this will translate into action?
It’s not about carriers introducing open technologies into their networks. The more important thing is their adoption of Open RAN as an architectural principle or imperative within their operational organization. Without this the technologies cannot follow. Given that operators are at the core of this movement, I think many organizations will adopt O-RAN for the primary purpose of interoperability. Interoperability will bring the benefit of making integration easier across what might be a multi-vendor network.
For this reason, Open RAN players have to refine their strategies. Currently, they don’t have a compelling “brown field” strategy. Open networking technologies will likely take a longer time than the adoption of an open network architecture commitment by operators. It’s important for Open RAN vendors to recognize that the open interface specifications of O-RAN are not a technology. They are just software and hardware standards and a library of standard APIs. The standard interfaces solve the operators biggest problem of integration, which GSMA Intelligence survey work verified as presented by Peter Jarich. For this reason, the Open RAN players have a tougher road ahead of them than they currently reckon to prove that they can deliver the products and the support services at scale. This is likely why there is a growing perception that the Open RAN movement has slowed over the past few months. I emphasize, perception.
Vendor diversity is not as important to operators as the Open RAN vendor community appears to believe. We are already seeing Nokia and Ericsson making their cloud RAN offerings more interoperable with compliance with O-RAN interface specifications. The things that operators care about are cross-network, cross-portfolio interoperability and integration. At the end of the day, the integrated and optimized stack will be competitively viable whether it is a single vendor, multi-vendor, single ecosystem or multi-ecosystem that offers it. It is a game of scale. It has always been.
QUESTION 6: How many operators will openly embrace Open RAN and Edge Compute into their networks by 2025?
The more important question is how will operators embrace or adopt both Open RAN and edge computing. Regarding edge computing, the question is do you partner with the hyperscalers for edge cloud service delivery or do operators embrace the role as a multi-edge cloud broker. In the Americas it seems that operators are taking the former approach which is to allow hyperscalers to UTB (Under the Bottom) them and essentially relegating the operator as a wholesale provider of connectivity for edge cloud providers.
It will likely take a while for competitive Open RAN systems to come to market save a small number of vertically integrated and optimized offerings that are starting to coalesce. Penetrating the market largely held by the Big 3 will continue to be a challenge. Much of this challenge is due to timing which is not good to say the least. The ICT vendor incumbents are set to take advantage of the “in-progress state” of Open RAN and the scaling challenges that most vendors in the ecosystem face. At the moment, Open RAN’s commercialization is largely in the POC and pilot stages with a few exceptions, most notably Rakuten Mobile and the nascent Dish network deployment.
Furthermore, little progress (not enough) has been made into tier 1 “brownfield” networks beyond limited rural deployments. Case in point, AT&T recently selected Ericsson for it’s C-band deployment which takes “pure play” Open RAN vendors out of the picture for that opportunity. It is important that Open RAN vendors figure out brown field relevance and integration as soon as possible. Part of that process is reckoning with the realities on the ground.
QUESTION 7: Will established vendors work for or against the adoption of ORAN?
Incumbent vendors are going with the flow, even the one standout, Huawei. It’s important to note that ORAN or Open RAN is a carrier-driven movement. It is also a global initiative sponsored by operators across the globe including China. Though multi-vendor has a nice ring to it, O-RAN is really an architectural framework. openRAN is about cloud-native infrastructure on COTS hardware. Interoperability is a general Open RAN objective which connotes vendor diversity but it does not mandate it.
It is apparent that Nokia and Ericsson are taking an O-RAN compliant approach with the evolution of their proprietary cloud-native RAN. They will likely ease into openRAN if and when they lose their hardware differentiation. They seem comfortable supporting the interoperability objectives of operators by opening their systems to O-RAN interfaces. This approach has not precluded Nokia, in particular, from participating in multi-vendor Open RAN collaborations. For the moment, the vast majority of large 5G network modernization projects are going to the Big 3. As long as the solutions of the Big 3 are cloud-native, they are future-proof investments for operators today even if the industry is expecting an Open RAN future.
There is a danger for the Open RAN movement, especially the vendor community, to assume that the incumbent or “legacy” vendors are not innovating. They are. They continue to have successes in winning 5G contracts across the board, putting out industry-leading products, and adopting cloud-native architectures to modernize their product and service portfolios. It is important for Open RAN vendors to recognize that interoperability is an outcome of architecture, not technology. The fact is that interfaces can be independent of the technologies, application services and infrastructure they abstract.
QUESTION 8: There is a lot of talk about mobile networks and the potential use of public cloud… your take?
For front office and BSS applications, the move to public cloud sort of makes sense. I’m not sure it makes a ton of sense. After all, Cloud is not cheap. If you are in the infrastructure game, the value proposition of putting everything in the public cloud is questionable? That is likely not the best strategy and a mistake that many cloud amateurs made in the early days of “cloud”. Operators should have the scale to realize elasticity and economic scale through their own infrastructure. That is not to say that there is no value going with the public cloud, but the use should be carefully evaluated. Unfortunately, this analysis is becoming more difficult given the way that hyperscalers cost and price their services.
QUESTION 9: GSMA reported that 87% of operators expect that 6G R&D efforts will be used to improve the performance of 5G. Will the industry need a new waveform?
It’s probably too early to tell what is a 5G or 6G project to be honest. There are certainly many candidate technologies being investigated and developed. While alternative waveforms such as Non-Orthogonal Waveform or NOW appear to be pretty early in the academic research stage, many of the motivations driving the research on new waveforms are focused on improving the power-performance efficiency especially of higher frequency bands such as mmWave and terahertz.
While it is fun to talk about 6G it is a bit too early preoccupy ourselves with it. We have much work to do with 5G and 5G Advanced. Fewer distractions the better is what I say. It’s time to focus on helping operators work their way out of the trough of disillusionment.
The Wrap Up
I appreciated the efforts and the boldness of John Hoffman, CEO of GSMA, his team, and the CTIA organization for putting on a live event during a continuing pandemic. Putting safety first, the event was a welcome change for many of us stuck working from home. As I expressed to John, I hope that the American operators’ agenda picks back up where we left off in 2019 when the GSMA and CTIA created a forum for the communications and entertainment media industries to get together to work synergies that might give birth to that “5G killer application”. We will see what MWC LA 2022 will bring. Hopefully we will be in a post-pandemic era when the operators will once again aspire beyond connectivity. Until then, see you in Barcelona!