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9 January 2020

How will the 5G landscape change in 2020?

Last year may have officially been the ‘year of 5G’, with initial launches underway from start to finish in many regions, but most of those were limited in geographical and service scope. The US operators were doing something interesting, though not necessarily commercially sound, by deploying first in millimeter wave spectrum, but most MNOs were doing little more than 4G-plus, beefing up data rates and cell edge coverage by installing 5G radios and MIMO antennas on the 4G site grid. Meanwhile, fixed wireless access (FWA) was about as radical as the new use cases got, with a few exceptions, mainly in east Asia’s industrial and municipal services.

So 2020 promises to be a great deal more important in terms of the evolution of the 5G market, both for vendors and operators. It will be a few years more before ‘true 5G’ – cloud-native, multivendor, converged, fully automated and fully sliceable – will be a reality for any but a tiny handful of pioneers. But elements of that transformative platform will start to be stabilized by vendors and standards groups (traditional or open), and to be deployed by operators (old and new). And some of the ways in which we expect the 5G landscape to evolve to be very different from that of 4G will become clearer.

Some of those are highlighted, in the very first week of this year, by significant developments in different parts of the world. They include:

  • Greater diversity in how spectrum is allocated and regulated.

Regulators, including those in Malaysia and Taiwan, are increasingly ready to consider alternatives to auctions as a way to keep spectrum affordable and, potentially, open it up to new deployers which may better serve the needs of some industries and challenging use cases. Last year, regulators in Germany and elsewhere went as far as to earmark some spectrum for industrial deployers, but some – as in France – are considering how new, flexible platforms, such as network slicing and dynamic spectrum access, could be harnessed to move closer to an on-demand mechanism in some key bands. All eyes will be on the Indian regulator, TRAI, and its government – operators are warning of exits and bankruptcies if the authorities do not reduce their reserve prices and break their attachment to high treasury revenues at the expense of mobile operator viability.

  • Mainstream deployment of open RAN architectures

Open, and even open source, platforms are of high interest to try to reduce cost and vendor lock-in for operators. This is especially true in the RAN, which accounts for the largest portion of total network costs, and is on the cusp of a move to virtualization. In light of the challenges of deploying 5G and vRAN, some operators are starting to take open platforms, like those from the ORAN Alliance and Telecom Infra Project, very seriously. NTT Docomo and now the UAE’s Etisalat have announced commercial roll-out plans, while Vodafone has issued an RFI (request for information) which it says will apply to all its new sites across its footprint over an unspecified period.

  • Progress in cloud-native networks, but not all smooth sailing

The goal for ‘true 5G’ service platforms will be a fully flexible, disaggregated and automated network, which means adopting cloud-native technologies as a move forward from first generation virtualization; along with the techniques that go alongside such cloud-based approaches, including DevOps and microservices. The first week of the year has seen good and bad news – Telstra became the latest in a small band of operators to deploy a cloud-native core, but AT&T, the bellwether for virtualized telecoms networks, admitted to missing its target for the number of functions it had converted to NFV (network functions virtualization). This pattern of bold steps forward, almost always followed by setbacks, is unsurprising given the mighty scale of the migration challenge, and will be seen in every part of the market.

  • Other industries sharing the 5G investment burden with MNOs

It is increasingly clear that, if industries need 5G as much as they claim for their digital transformations, they will need to help pay for it. In some sectors that will be via higher direct fees to MNOs, but in others it will be via co-investment in the actual infrastructure, in return for anchor tenant status or other shared rewards. China Unicom has been the flagship for this approach since a range of Internet and industrial players took stakes in the operator in return for influence over how it configured and prioritized its next generation networks. Now the country’s new entrant, China Broadcast, is also lining up vertical market co-investment, as are operators in Japan and elsewhere.

 

  • Where will Huawei fit in the 5G market?

One of the great unknowables at the start of 2020 is nothing to do with new architectures, but will be equally important in shaping how the industry will look by the end of the year. This is what position Huawei (and ZTE) will take in the 5G market, after a tumultuous 2019 characterized by mounting pressure from the USA, and uncertainty about how far other countries would also introduce bans or restrictions (and how far operators would be scared away from choosing Chinese suppliers as a result of the uncertainty). Geopolitical tensions have certainly not abated with the dawn of a new year, and there is still the threat of the 5G world splitting into two blocs, to the detriment of operators’ vendor choices and the quest for common standards.