Accelerating out of the crisis

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Harnessing advanced technology to create new opportunities is more about programmatic, disciplined effort, carried out over time, than it is about inspiration.

COVER FEATURE

The spirit of innovation and decades of pushing technological boundaries have led to the creation of every one of the communication services that is taken for granted today. Whether it is connecting people with fast, reliable broadband so they can work, shop and socialize at home and on the move – or the increasingly diverse range of ways high quality broadcast content can be watched – technology advances have made what just decades ago would be considered unthinkable, everyday reality.

But these technologies have deep historical roots. The wireless and fiber networks used today depend on physical principles first established by James Clark Maxwell in 1861, and on mathematical limits developed by Claude Shannon in 1948. And it took another 48 years for Claude Berrou to show how engineers could reach those limits using turbo coding.

And with wireless and wired capacity doubling every 18 months from the 1970s into the 21st century, and computing power growing at a similar rate, there is phenomenal growth in data used on mobile, fixed, and broadcast systems. Without these advances, the services that are relied on today to communicate and get news and entertainment, simply would not have been possible.

 

 

COVID-19

The emergence of the novel  coronavirus  (COVID-19)  brought a series of black swan events to the entire telecom industry. People and businesses shifted to digital means to manage their work loads, which led to an unexpected surge in fixed and mobile network traffic and access demands. Telecom network operators have had to address this unprecedented situation to fulfill the increased networking requirements  of their subscribers. As high-speed internet connectivity and broadband connectivity became crucial, be it for medical facilities, educational institutions, or businesses, networks were taxed to their limit and operators and platforms reported demand spikes as high as 800 percent.

Dramatic changes were seen.  The operators were  expected to  ensure  resilient  connectivity  24x7.  With   demand for video conferencing services and SaaS applications continuously rising, cloud computing increased amidst the lockdown. With payments with pin and chip becoming the new normal, cyber security engineers needed to act on developing strategies to strengthen remote connectivity with proper authorization procedures.

Telcos responded by an increase in network transport capacity, partnering with technology companies to understand customer behavior using technologies like AI/ ML and data analytics and providing tailoring solutions accordingly, and even for some period not terminating the service if a customer could not afford to pay bills due to the pandemic or waiving late fees and expanding the availability of their Wi-Fi hotspots.
The pandemic accelerated structural challenges and trends that have long faced the telecommunications industry.

Mobile and wireless technologies

In the last 5 years, both mobile (4G/5G) and local area  (Wi-Fi) networks have seen major changes in how they are designed, deployed and owned; and in how they are used. Both mobile and Wi-Fi systems have been using    an increased number of antenna elements. More than 25 years since the seminal work on multiple input, multiple output (MIMO), and 10 years since the first proposal of massive MIMO, multiple antenna systems have continued to evolve and are finally well-understood. They have led  to substantial increases in spectrum efficiency, coverage, and service consistency, with massive MIMO offering up to 5x the practical capacity of more traditional MIMO techniques, although there is still a significant gap between theoretical and real-world gains. A flexible baseband and radio frequency design has allowed the aggregation of different frequency bands and supported different types of deployments, from large macro cells to outdoor and indoor small cells. Both mobile and local area networks have been supporting increasingly high frequencies and wider bandwidths, up to 70 GHz.
At both radio and network level, there is a move from vertically- to horizontally-integrated network elements (referred to as disaggregation). For example, Open Radio or Open RAN aims to disaggregate mobile base  stations by standardizing open interoperable interfaces between the radio and signal processing elements, with the aim of increasing supply chain diversity, lowering costs, and increasing innovation. Similar disaggregated architectures have been proposed  for  Wi-Fi.  This  trend is reminiscent of the shift from vertical to horizontal integration of products for personal computers during the early 1980s. Disaggregated radio or network solutions also facilitate building network elements as software functions running on virtual machines or containers which themselves run on top of general-purpose hardware. While for core networks software-based solutions are already becoming mainstream, for radios there is still some work to do for software-based products to provide solutions that are able to fully replace vertically integrated base stations. But things are moving and commercial virtual radio solutions have recently become a reality.

Related to the trends above, the boundaries between radio, network, and IT infrastructure are dissolving, with some of the radio functions being pushed more towards the center and some network and cloud platform functions being pushed toward the edge – underpinned by distributed processing, storage, and software infrastructure. This trend is referred to as mobile edge computing. For example, recently Rakuten (a  Japanese  marketplace  and IT giant) deployed its own mobile network in Japan. And Amazon, Google and Microsoft have all leveraged their cloud infrastructure and skills and expanded their offerings (either via organic growth or acquisitions) to provide cloud-based network solutions.

On the spectrum side, the emergence of new regulatory regimes allowing shared and local access licenses, has broken the traditional dichotomy between nationwide license models (as usually used for deployment of cellular systems) and unlicensed/license-exempt spectrum (usually used for deployment of local area network technologies like Wi-Fi). For example, in the UK shared access licenses are currently available in four spectrum bands, including the 3.8–4.2 GHz band and the 24.25–25.5 GHz band. In the US, a dynamic spectrum sharing mechanism is available for the 3.550–3.7 GHz Citizens Broadband Radio Service (CBRS) band. Other shared access license mechanisms are available in other countries.

 While traditionally mobile and local area networks provided solutions for connecting people to each other or to the internet, recently new use cases have emerged including the trend to connect things (such as sensors and actuators) and to use wireless networks for control rather than communication. The former trend drove the emergence of new low-power wide-area (LPWA) network technologies, either using unlicensed bands (like long range (LoRA) or Sigfox) or mobile bands (like LTE-M or NB-IoT).
The latter trend led to 5G being designed to natively support much lower latencies and more reliable connections, leading to the so called 5G ultra-reliable low- latency communication (URLLC) standard features. So, in the last few years mobile and Wi-Fi standards (together with non-standardized proprietary solutions) have started to be used to provide connectivity solutions for so called vertical sectors, including logistics, manufacturing, transportation, automotive, and utilities.

AI is being used to solve a different set of problems in  networks and devices. These applications include network optimization (such as 5G-aware traffic management, dynamic spectrum management, predictive resource allocation, and cell-sleep optimization), service operation (predictive maintenance, security management, and automated issue resolution), customer engagement (via identification and prediction of customer satisfaction), and customer care (chatbots, real-time analytics to monitor quality of experience), among others. Gains can be quite substantial. For example, Ericsson claims a 14 percent saving in site energy consumption by using machine learning for sleep mode management and the ability to increase 5G coverage up to 25 percent, by directing 5G devices to the best 5G capable cells. In devices, it has been used in cameras, to provide extended reality services and to enable virtual assistants. To make in-device AI faster, mobile processors integrate neural processing units and use optimized deep learning software.

 Remote connectivity transforms telecom networks

To help reduce the spread of COVID-19, everything went remote. Complying with social distancing regulations and lockdown restrictions, many sectors shifted online and
workforces across the world started working from their own homes. With the sudden shift of so many people accessing digital platforms at one time, the telecom industry had to react to demands of seamless connectivity. And it did.
The changing patterns in peak network traffic and the substantial movement of traffic from central business districts to residential areas require a fundamental rethink in network traffic management. In addition, many businesses continue to ramp up digital transformation efforts to conduct business online as physical channels will remain limited. Consumer onboarding will also be fervent, as organizations look at business recovery – resulting in increase in bandwidth requirements.

Telecom operators are facing increasing demands for cutting-edge services and top-notch customer experience (CX). The global pandemic has caused  revenue  loss,  due to struggling economies and many operators will aim to reduce OpEx to circumvent these financial pressures, raise the quality of CX and retain existing customers. To realize this, there will be more focus on improvement in efficiencies, better operations management as well as improving the IT stack. These digital transformation efforts will enable rapid and flexible services provisioning, which will be better prepared for the tailored services customers now demand.
Many operators are increasingly incorporating cloudification alongside the 5G network deployment. Operators are moving toward transforming their operations and business support systems to a more virtualized and software-defined infrastructure. 5G will operate across a range of frequencies and bands – with significantly more devices and connections becoming software-defined with computing power at the edge. Operators will also harness the power of AI to analyze  massive volumes of data from the networks accessed by millions of devices in order to improve CX, ramp up operational efficiencies as well as introduce new services tailored to customer needs to increase revenue.
Going into next year and beyond, telecommunication networks need to ensure optimum speeds and low latency for their customers. This is only going to increase as more users access online technologies.

The increasing remote working trend is amplifying the need for greater cybersecurity. Cybersecurity has catapulted in importance as the pandemic has seen a worrying increase in attacks on banks, cloud servers and mobile devices, among others. Cyber-attack incidents specifically due to remote working, has seen a rise. A telecom operator’s compromised security can have country-wide, and even global consequences.

Open RAN

Open Radio Access Networks (O-RAN) is  disrupting the market, enabling vendor mixing and matching, greater competition, and introducing new entrants via standardization, separation of software and hardware, and by turning certain elements into independent applications. It is an emerging trend that is set to shake   up the roughly USD 40 billion 4G/5G infrastructure market. This trend is a continuation of ongoing forces in the broader IT  and  telecom  hardware  markets,  such as the shift to virtualized software, whitebox hardware, merchant silicon, and general software disruption of the proprietary hardware markets.
Similar efforts have been witnessed to open and standardize other networking markets such as ethernet switching and IP routing, however the complexity, performance demands, and tight vendor controls in the mobile infrastructure market have left the RAN proprietary thus far. 5G deployments represent an entry point and a catalyst for O-RAN.

Currently, O-RAN development is supported by a wide range of semiconductor, hardware, testing, systems integration, and software companies, helping foster innovation in each domain and cooperation toward a more hyperscale-like network. As it has been seen in other areas of cloud networking and technology, open ecosystems often foster greater innovation.

One of the key drivers for O-RAN interest is the ability   to avoid vendor lock-in. Following years of vendor consolidation in the mobile infrastructure market, there are only four leading equipment provider choices: Huawei, Nokia, Ericsson, and ZTE to  a  lesser  extent.  On top of limited choice, it is notoriously difficult to switch vendors, requiring expensive and labor-intensive equipment swaps from the radio head to the baseband data center infrastructure. In some cases, the equipment swap cost burden falls on the carrier and, in some cases, vendors provide such services as part of the sales/services strategies. Ultimately, the lack of choice and difficulty in switching vendors create a market rife with equipment vendor lock-in.

Having said this, that  may  change  with  the  movement of Nokia and Samsung announcing Open RAN products. Nokia has become the first major telecom equipment maker to commit to adding open interfaces in its products that will allow mobile operators to build networks that are not tied to a vendor. Its Open RAN aims to reduce reliance on any one vendor by making every part of a wireless 3G/4G/5G base station modular and interoperable, which permits network operators to choose different suppliers for different components. As part of its implementation plan, Nokia plans to deploy Open RAN interfaces in its baseband and radio units. An initial set of Open RAN functionalities became available in 2020, while the full suite of interfaces is expected to be available this year.

As the market has consolidated, political pressures versus Chinese vendors’ role in 5G further limit vendor choice to only 2-3 firms in some regions. Therefore, global pushback against Huawei/ZTE may be one of the largest drivers of O-RAN adoption, pulling forward the timing    of operator decisions on RAN architectures. Huawei has gained significant share in the USD 38 billion  market over the last 7 years, now representing 34 percent of the total market, and government support for removing the vendor from networks has grown in recent months. The UK government recently instituted a policy banning UK carriers from buying new Huawei equipment beginning   in 2021, and all Huawei equipment must be removed from UK networks by 2027. Other regions of Europe such as Belgium, Poland, and Sweden have also recently shied away from Huawei. Importantly, replacing Huawei brings large costs, both from losing Huawei as a competitor and equipment swaps. The move, having been initiated by the US, its government had taken steps to help developing  countries within Africa and the Middle East fund the costly replacement of Huawei/traditional equipment. Specifically, the US Agency for International Development is spearheading the effort, while the US State Department continues to pressure US allies to displace Huawei and ZTE equipment from their  networks.  The  replacement  of Chinese RAN technology could open up a USD 35 billion market to both incumbent and new vendors, and the replacement of network vendors’ architectures offers an attractive opportunity for carries to re-architect the access network utilizing modernization and virtualization, which are both drivers for O-RAN. The US government has also explored investing in O-RAN technologies to help US software/hardware/semi vendors play more of a role  in cellular networks.

Opening the interfaces between the baseband unit (BBU) and remote radio unit (RRU) helps increase competition, lowers the switching costs, and likely saves carrier CapEx to some degree. However, the real benefits related to the O-RAN vision come to fruition when the architecture becomes virtualized or cloud O-RAN (often referred to    as Open vRAN). In Open vRAN, carriers first save on equipment CapEx as the  baseband  unit  software  runs  on commodity off the shelf (COTS) hardware (i.e., x86 servers) rather than proprietary integrated hardware. Software can be purchased from new vendors and the equipment can be provided by vendors such as Quanta Computer. High degree of competition for the RRU component and the hardware commoditization for the BBU component could result in potential CapEx savings of 40-50 percent. Installation and  integration  services  can also potentially be brought in house or outsourced to a longer list of competitors, adding RAN installation savings that are typically part of CapEx. The second area of carrier total cost of ownership (TCO) savings is related to the maintenance and operating expense. By copying the efficient cloud models of hyperscalers and centralizing/ standardizing the foundation of the RAN, carriers stand to run more efficient data center operations. The software-defined approach also adds to network agility and automation. Through better agility and automation, carriers save on the management, maintenance, and upgrades for the network. Early reports suggest potential 31 percent operating expense savings as a result.

On the vendor side, O-RAN represents new opportunities for software-only vendors, hardware providers, and leading semi vendors. Nokia and Ericsson partially support O-RAN, given its disruptive nature, focusing instead on proprietary software-based solutions, like virtualized (vRAN) or Cloud RAN. However, as momentum grows, all leading vendors are expected to support O-RAN, similar to trends seen in switching and routing. The legacy radio vendors are expected to offset the negative implications of O-RAN via a growing focus on software, applications and expansion into adjacent markets.

O-RAN is still in its early days, representing ~1 percent of the total RAN market in 2020 and ~6 percent projected by 2024. In 2020 O-RAN was portrayed as a miracle technology. Many believe it will increase innovation, reduce operators’ costs, and help rid Chinese equipment in telecom networks. Other O-RAN boosters want more nations to become manufactures of telecom infrastructure. 2021 will bring a needed reality check. It will take years before O-RAN can replace regular RAN on a 1:1 basis.


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