Special Report: A look back at 2022
This is the last edition of Rethink Wireless Watch for 2022, and as is traditional, we are starting the issue with a look back on the defining themes of an eventful and challenging year, and thoughts about how they will continue to shape the industry in 2023. Our next issue will be published on January 9 2023, when we will dust off our crystal ball and predict the most significant developments for the mobile industry in the new year ahead.
It is worth looking back at the highlights that we selected to kick off this year. In the first edition of 2022, the focus was heavily on Open RAN and its potential both to disrupt the supplier ecosystem, and to help enable new operator models such as active RAN neutral hosts. Also in the spotlight were the changing relationships between operators and towercos, as the trend for MNOs to carve out or sell off infrastructure intensified, and the two parties explored increasingly wide-ranging deals that covered small cells, fiber and edge compute. And on the US side of the Atlantic, Verizon and AT&T were forced into temporary delays in deploying 5G in their hard-won C-band spectrum because of interference concerns from the aviation industry.
In our top themes of 2022, Open RAN, infrastructure investment models and midband 5G build-outs remain very important. Below, we select eight trends of the past year – not necessarily the definitively most important, but a group that we believe were interesting in 2022 and will continue to be important in shaping the industry in 2023.
- Major midband 5G deployments will provide welcome revenue streams – mainly for traditional vendors
The issue of the USA’s C-band spectrum, and potential interference with aviation systems, has not been fully resolved, but the usability of the airwaves is not in serious doubt. But more broadly, the race to deploy 5G in the all-important midband spectrum will be a feature of 2023, as the US operators accelerate their progress, and as operators in some other major markets gain midband licences – most importantly India, where Reliance Jio and Bharti Airtel have set contrasting 5G strategies, both of them involving a breakneck speed of roll-out.
The US and Indian efforts will be particularly important for the RAN vendors, since the hoped-for rush of 5G Standalone and core projects has so far failed to materialize, diminishing their 5G revenue plans. However, also failing to materialize are large-scale orders for 5G RAN systems from non-traditional vendors, at least outside the greenfield operators (and even Dish introduced Samsung to its long supplier list when it needed to scale up its 5G network quickly). So far, as India’s big orders with Nokia and Ericsson demonstrate, operator enthusiasm for Open RAN and supply chain diversification is not yet translating into large macro network contracts.
- Open RAN will make steady progress, but the ecosystem will reset expectations on macro network timing
That brings us on to Open RAN, still a major theme in 2023 as it has been for the past two years. There have been significant developments this year, some of which will help to deliver a robust, deployable architecture in future. So far, multivendor, virtualized Open RAN is mainly commercially deployable in small cells, rural extensions or greenfield networks. We believe that will remain the case until 2025, when some of the ongoing developments will help to make the platform viable for urban macro RAN.
One question is how many challenger vendors can survive the wait, unless they are specifically targeting private networks or small cells. Another is how far a platform approach will take hold. Rakuten Symphony, NTT Docomo and Reliance Jio are all creating API-driven platforms to support pre-integration and make it less challenging to introduce multiple new suppliers of different Open RAN elements. Each of these could offer their platforms to other operators, in order to drive a global common platform, as Symphony is already trying to do.
Platforms are one way to ease the challenge of deploying multivendor Open RAN, but other important enablers will include the creation of chips and accelerators that are sufficiently powerful and power-efficient to support Massive MIMO radio processing in the cloud. This is a key focus for Vodafone and its widening variety of chip partners (see item below). But key enablers – such as new acceleration; open APIs in all interfaces; and robust testing and integration that is still affordable to operators – take time to emerge, even with powerful operators and vendors collaborating on them. So 2023 will see a new realism about timescales for macro Open RAN deployment becoming the norm.
- US-Chinese geopolitical and trade stand-offs have intensified, threatening to fragment the global platform
As we went to press, the US government had lengthened its ‘Entity List’ again, stepping up sanctions against trade with various Chinese suppliers. There are few signs of a reduction of trade, cybersecurity and geopolitical tensions between the two superpowers, and so the impact on the mobile industry will continue.
There are already signs of the market splitting into two separate ecosystems revolving, on a geopolitical basis, around the two huge countries. So far, work on foundational standards remains global, but even that could change as the blocs build their own supplier ecosystems, intellectual property and platforms, and invest heavily in self-sufficiency in key technologies such as advanced semiconductors and radios.
Other large countries or groups, such as India, Japan and the European Union have also been working to build their own ecosystems, 5G industries and technology self-reliance, which protects them somewhat from the US-China stand-off, but threatens further fragmentation.
- Millimeter wave spectrum has started to look useful outside the USA, though fixed wireless is still its key short-term use case
The fortunes of millimeter wave spectrum, once hailed as the game-changer for 5G capacity, have been mixed in 2022, thanks to the ongoing challenges of short range/poor indoor propagation in frequencies above 20 GHz.
The biggest commercial users of mmWave have been Verizon and AT&T in the USA, where it has been used for fixed wireless access (FWA) and capacity hotspots. By contrast, two South Korean operators, KT and LG-Uplus, surrendered their mmWave licences, having failed to meet the government’s build-out targets because they could not make the business case work.
However, technical developments, notably by Qualcomm, are extending the range of signals within mmWave bands and could improve its usefulness and commercial viability from 2023 onwards as well as boosting device availability. This could see the early focus on FWA broadening, in particular where localized licensing plans allow for dense in-building and industrial roll-outs.
- 5G Standalone has been a damp squib, and deployments look set to be slow in 2023 also
The large network vendors are open about their disappointment with the pace of deployment of 5G Standalone, which requires its own core, during 2022. Only about 35 operators have embarked on at-scale deployments in public macro networks though there is more activity in enterprise 5G.
Having deployed 5G Non-Standalone, many operators feel that is ‘good enough’ to support conventional mobile broadband business models. New enterprise revenues streams that require slicing and advanced connectivity will trigger 5G SA, but the majority of operators have not yet made a strong business case for taking this step in the near future.
We expect some acceleration of 5G SA deployment in 2023, but this will not represent a tipping point for the platform – or vendor revenues from it – until 2024 or even 2025. Core and end-to-end vendors will need to seek major contracts in other areas such as Massive MIMO radio upgrades, which by contrast with SA have been growing more quickly than expected in 2022; or, on the software side, enhanced and virtualized 4G/5G cores for Non-Standalone networks, as well as early roll-outs of new automation systems.
- India’s 5G spectrum auction has unleashed innovation and vendor opportunity in networks and software platforms
One of the key markets for pressurized vendors will be India, where the three main operators have acquired spectrum and, in the case of Reliance Jio and Bharti Airtel, already awarded their first network contracts and started roll-out.
The unleashing of 5G in India does not just represent a revenue opportunity for the big RAN vendors, though they will be relieved that Jio and Airtel, both supporters of Open RAN, have not found challenger vendors to be up to the task of a rapid-fire 5G macro deployment at this early stage. But in the background, 5G will stimulate existing efforts by the big two MNOs to create their own network and services platforms, working with a wide range of partners from local start-ups and integrators to global hyperscalers. All these activities are generating innovations that will be influential in the wider market.
- The US hyperscalers have pulled back from some non-core activities but remain influential in the mobile industry
The second half of 2022 has been a turbulent one for the US hyperscalers, especially Meta, and there have been signs within Google and AWS of companies that are retrenching somewhat amid economic crisis, mixed quarterly results and antitrust pressures, to focus on their core business. Meta shut down its Connectivity business, and this may have knock-on effects on the level of its backing for industry initiatives such as Telecom Infra Project (TIP).
However, the hyperscalers remain active in telecoms. Google announced a deal with O2 Germany to support that operator’s cloud-based core migration, the latest in a series of successes in the telecoms cloud sector that will continue even if the company has to make concessions in its Android business to avoid antitrust issues.
Meta, despite its issues, recently announced a wide-ranging partnership with Airtel in India (see previous point), and all three US public cloud providers have also taken significant stakes, and formed major alliances, with Indian operators to tap into the huge potential of the country’s consumer and small business base.
As the 5G networks become increasingly virtualized in the second half of the decade, the hyperscalers will aim to define and drive the platforms, and host the networks, and 2022 saw them laying some of the groundwork – as in AWS’s partnership with Dish on vRAN and vCore – to make this happen in a few years’ time.
- WiFi has evolved rapidly and there has been a more ‘grown-up’ approach to its relationship with 5G
WiFi 6, and its extension for the 6 GHz band, really matured in 2022 with a lengthening list of devices and equipment, and also of deployments that complement 5G.
The growth of cellular private networks in certain industries – led by ports and airports, factories, transport, smart cities and healthcare – has been an important trend since 2020. There has inevitably been talk of WiFi/5G wars in enterprise scenarios as the two technologies increasingly overlap in capabilities – WiFi’s latency has improved with 6, for instance, while 5G’s data rates are competitive even with wide-channel WiFi.
But the debates have become more grown-up, as the complementary nature of the two standards becomes the focus of efforts, rather than imposing an either/or choice that makes no sense in complex environments such as ports or factory complexes, that require many types of connectivity for different applications. As enterprise use of wireless communications becomes more sophisticated, the pressure is on the ecosystem to develop truly multi-access cores and gateways to enable seamless multi-RAT networks that will support the diversity of industrial requirements optimally.