In the last issue of Wireless Watch, we took our latest look at the role of the hyperscalers in emerging 5G architectures and business models. With most telcos backing away from offering cloud-based enterprise services themselves, or even building their own clouds to run internal IT and network functions, the balance of power has unsurprisingly shifted towards the cloud giants.
In the current international climate, which has politicized operators’ technology choices, this also means a shift towards the US-centric ecosystem – something that seems as close to the hearts of lawmakers under the Biden administration as it was under Trump (see article below about the latest sanctions against Chinese suppliers).
A 5G platform centered on Open RAN and core functions developed mainly in the USA, and running on the US cloud majors’ infrastructure, would mark a return to cellular infrastructure power for North America, which has seen former bighitters like Motorola, Lucent and Nortel being carved up by the European leaders, alongside the rise of Chinese suppliers in the 4G era. Of course, this is also likely to come at the cost of a return to the old two-camp mobile network market. Once there was the GSM/CDMA split, followed by a few years when WiMAX looked like a real 4G contender – now the divisions in the technical platforms, and associated ecosystems, are likely to develop on geographical grounds, between US-centric and China-centric communities on the road to next generation 5G and even 6G.
However, there is a different and less clear-cut picture at the edge. As 5G networks become increasingly distributed and cloud-based in the mid-2020s, they will become increasingly reliant on very high quality edge cloud infrastructure, capable of supporting multiple network functions from RAN to routing, as well as advanced services for consumer and enterprise customers. Here, the telcos have the opportunity to assert power over their hyperscaler partners, and for a more geographically diverse ecosystem to thrive.
The major European operators are taking leadership positions in defining edge-based Open RAN and service architectures, and in partnerships like that between Vodafone and AWS, or TIM and Google, it is clear that the operators are contributing essential assets and value to the deal, not just taking a bit-pipe role.
In case studies highlighted in today’s issue, we see operator projects in Finland and Germany taking innovative approaches to enhancing industrial automation – a key commercial goal of 5G – by combining edge cloud and 5G connectivity. The power of the big European vendors, Nokia and Ericsson, cannot be dismissed despite their challenges, and Nokia, in particular, has been reinventing itself around private and enterprise networking, and Open RAN – key strategies in which a high performance edge cloud is central to success.
And ETSI, Europe’s foremost telecoms standards body, has consistently set out the framework for the telco edge with its MEC (Multi-access Edge Computing) initiative. This has its limitations, and is certainly not the only game in town in defining the 5G edge platform or business, but it is influential on a global basis. Indeed, ETSI just published its latest MEC white paper, this one focused on the key issue of security.
The important point when considering the 5G edge is that operators are expert at building and managing highly distributed networks, and can treat edge data centers in the same way as their old central offices, cell sites and DSLAMs. This contrasts with the cloud giants’ model, which is based on scale and consolidation, and that of the enterprise cloud leaders such as IBM, which is not focused on direct build-out.
By repurposing their locations and physical infrastructure to support edge cloud and virtualized networks, operators will have a crown jewel when it comes to a highly distributed, very high performance edge platform. They can use this to strike a new balance of power with the US hyperscalers, something Vodafone, in particular, is already doing; and they can monetize this platform with consumer, enterprise or wholesale services.
There are many challenges to address, from security to rugged infrastructure, and the ubiquitous 5G edge cloud will not be a reality until the second half of the decade – but it does hold out the promise of a diverse and international ecosystem in which innovation can be driven by operators in all markets, rather than surrendering all control to the giant cloud providers.