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6 December 2022

Service, not architecture, innovation will drive change in 2023

Special Report: Will 2023 be different in 5G?


There are two more issues of Rethink Wireless Watch still to come before the holiday break, so it’s a bit early to start on the annual sport of gazing into next year’s crystal ball. But the nearing of year-end inevitably brings reflection on what has taken place over the past 12 months, and whether the events represented transient trends or set the pattern for the years to come.

There were certainly issues that received a huge amount of airtime in 2022, but many of these failed to live up to the (often) inflated expectations that were set at the start of the year. A combination of Open RAN, 5G Standalone, telco edge compute and high-end new devices were supposed to be laying the foundations for a wide set of brand new services and operator revenue streams, while shaking up the 5G supply chain and resetting the relationship with the cloud industry.

In fact, the resetting has largely taken place within the hyperscalers and social media giants, and the recent challenges of Meta, Google and Twitter may indeed have a knock-on effect on the telecoms space. And of course, war and global inflation and recession will shape the fortunes of operators in 2023 far more than any internal industry changes.

Setting aside the movements in geopolitics and the broad hi-tech world, the mobile world has changed far less than many had hoped a year ago. Open RAN has not yet shaken up the 5G supply chain or even made much dent in the proposed architectures to be adopted by the operators. 5G Standalone has only been deployed at scale in public networks by about 30 operators. The business case for the 5G+edge compute combination remains appealing in theory but complicated in practice. And the smartphone sector is going through a period of decline, amid a perfect storm of supply chain disruption, reduced consumer confidence and USA/China trade wars (see item under ‘Devices and components’).

So will these key network and device trends change in 2023? We expect Open RAN, 5G SA and edge compute to have a gradually increasing impact, but not to drive any radical reshaping of the supply chain or operator business model – with the usual few exceptions – until at least 2024 and, in most cases, later. In today’s special report, we examine recent predictions from around the research world, related to Open RAN and smartphones in particular, and conclude that these are broadly in line with our own mood of caution.

The picture of cautious, incremental progress, rather than dramatic change, can belie the important transformations that are taking place in the mobile market however. But increasingly, these are not being led primarily by architecture or vendor changes, but by operators devising new use cases and innovative services before they go for all-out network change. New services enabled by slicing, open APIs and edge compute will only have their maximum impact when virtualized RAN, the 5G SA core and advanced telco edge platforms are in place. But as operators come under rising pressure to generate at least incremental new revenues from 5G, they are often starting to deploy new applications and services, using their existing technology, to get the ball rolling.

Those with greenfield networks provide useful pointers and examples, especially Dish with its experiments in slicing and APIs (see below), but the bigger market impact will come from the more established operators with their broad reach. Verizon’s edge services, developed with AWS, or Telenor’s network slicing for industrial networks, may not yet be using the full capabilities of 5G, and may stop short of fully dynamic, virtualized operations. But they offer meaningful new  choices for customers, which can be enhanced in future when vRAN and full end-to-end slicing, enabled by the 5G core, are implemented, and when edge compute is expanded.

Network slicing, which for years has been both the great hope for 5G monetization and something rather futuristic, has been evolving gradually without the need for every slice to be orchestrated from a 5G core, at least in the first phase. This has partly been because of slow progress to implement new architectures, but also because of regulatory uncertainty about how net neutrality rules affect slicing. Rethink’s RAN Research service will shortly publish a major report and forecast focused on network slicing, and today its author provides some analysis of the regulatory aspects.

A trend for operators to develop new services before all the technology enablers are in place may sound backward, but it is actually very positive. It encourages operators to innovate more intensively than they typically did in 4G, as they seek to be less reliant on their major suppliers, and to work out their business requirements first, before choosing their architecture. As such, this trend will help to make things different in 2023, and to help fulfil the operator quest to shape their own market – even if we wait another year or two for the big architecture and device hopes of 2022 to be fulfilled.