The tricky relationship between operators and mobile spectrum is nothing new. For the past 20 years we’ve seen countless auctions and bandwidth assignments across the globe, often surrounded by much wailing and gnashing of teeth from the operators over the cost, division of the bands and any perceived advantage for the competition.

The spectrum issue typically comes to a head around the launch of a new generation of mobile network technology, as operators feel the pressure to secure fresh licences to maintain a competitive advantage. In the long term, a lot of 5G rollouts will ultimately rely on the availability of fresh spectrum, particularly in the low- and mid-bands. But, in the meantime, operators can also look to technologies including carrier aggregation (CA) and dynamic spectrum sharing (DSS) to manage their 5G network assets.

Auctions in 2020 will see 5G snowball
As with previous generations of mobile technology, the speed of 5G rollout will largely be dependent on the availability of suitable spectrum. It’s no surprise, then, that the next-generation forerunners such as South Korea and the US are those where 5G bandwidth has been available for over a year now. And a number of major auctions are expected within the next six months, with new spectrum specifically earmarked for the technology in 27 markets as of Q3 2019 [1]. There’s already considerable excitement about the recently launched sale of C band spectrum in the US, while China is poised for massive expansion in rollouts in 2020, aided by spectrum assigned without cost to the carriers.

In Europe, the case is less clear. We’ve seen been some unexpectedly high bidding in early 5G auctions, and operators in the region risk being squeezed if governments prioritise revenue over rollouts.

The bandwidth issue: coverage versus capacity
For perhaps the first time, the focus on 5G spectrum is shifting from network coverage capabilities to data capacity. The disparity between bands was a factor in 4G, but is set to become core to the 5G consumer experience. The mobile spectrum bands in use today can be divided into three tiers:

Low-band: <1GHz
Mid-band: 1GHz to 6GHz
High-band: >6 GHz

At the recent ITU WRC-19 conference, delegates identified more than 15GHz of fresh high-band mmWave frequency bands [2] suitable for 5G use. These are needed because ultra-low latency and very high bit-rate applications will require larger contiguous blocks of spectrum than those available in lower frequency bands.

In the US, early 5G networks have been built using the 26GHz and 28GHz mmWave frequencies, offering very high capacity but poor coverage: acceptable for dense urban areas, but increasingly problematic as you move out into the suburbs. Increasingly, the speed of 5G rollout will be dependent on the availability of mid- and low-band spectrum.

The lower the frequency of a band, the better the coverage, but spectrum in the sub-1GHz bands is in scarce supply. In 4G, low-band frequencies have been used to cover huge areas, but many operators have gained an edge in urban areas using the mid-band. And this pattern is already emerging in the 5G world, with the majority of existing 5G networks using mid-band in initial urban deployments.

But even the mid-band frequencies may not be sufficient to bring 5G to the masses. Network propagation in these bands is limited, while in-building penetration is relatively weak. To complete 5G, operators will need to begin to utilise low-band spectrum, which will almost inevitably mean refarming.

Make do and mend: the importance of refarming
So why can’t operators simply re-use old spectrum from obsolete networks?

Operators face a fairly unique challenge in this technology generation, since the worlds of 3G and even 2G are far from dead. Huge volumes of connected devices, from industrial IoT to emergency services, are still using 2G networks.

Meanwhile, as 4G migration gathers pace a number of operators are already talking about switching off 3G, potentially freeing up valuable low-band spectrum for refarming to 5G.

GSMA Intelligence’s Network Transformation 2020 [3] report found only a third of operators (31 per cent) identified spectrum refarming as a top-three RAN priority despite many of the same operators highlighting spectrum scarcity as a key barrier to 5G rollout. This low focus on refarming, particularly in Europe and the Americas, seems at odds with many operators’ future plans, given that half of those we surveyed said they plan to phase out their 2G networks by the end of 2020.

Managing spectrum assets to maximise the future of 5G
The widespread rollout of 5G using mmWave spectrum is not realistic: the very limited coverage of these frequencies demands enormous infrastructure investment. At the same time, there is simply not enough mid- and low-band spectrum currently available to provide the huge data capacity 5G will require. But there are some short-term solutions to these challenges which will allow operators to better manage their network assets.

The first is CA, a technology which allows operators to deploy 5G using two or more bands in tandem, integrated together as one big block. This will enable operators to deploy a high level blanket of 5G using mid-band, while adding capacity in dense urban areas using mmWave.

The second technology is DSS. This emerging technology allows 4G and 5G to exist simultaneously on the same band, while adjusting the bandwidth allocated to each generation dependent on demand. This is clearly ideal for low-band rollout, as it will allow operators to continue to use valuable spectrum for 4G, while adding 5G capacity as demand grows. But whether it will be enough to address the looming issue of massive data demand on 5G networks remains to be seen.

Operators can also look to existing models to speed up 5G rollout, such as tower, infrastructure and spectrum sharing. But in the longer term, only the harmonisation of spectrum in the low- and mid-bands will unlock the true potential of 5G. And with the majority of the hyped killer use cases including low latency gaming, VR/AR and automation reliant on standalone networks, there remains a big question over how soon operators can begin recouping the massive investment needed.

But it’s clear from the operators that a perceived scarcity of 5G-suitable radio waves is a barrier to 5G rollout, and governments and regulators must work with the industry to remove spectrum roadblocks if they are to make widespread 5G connectivity a reality.

– Peter Boyland – lead analyst, Ecosystem Research – GSMA Intelligence

The editorial views expressed in this article are solely those of the author and will not necessarily reflect the views of the GSMA, its Members or Associate Members.

[1] https://www.gsmaintelligence.com/research/2019/10/global-5g-landscape-q3-2019/825/
[2] https://www.mobileworldlive.com/featured-content/top-three/gsma-hails-wrc-19-5g-spectrum-agreement/
[3] https://www.gsmaintelligence.com/research/2019/11/network-transformation-2020/833/

CES 2020 is over. In the six days I was in Las Vegas I was lucky to see a great many things from across the IoT landscape and the broader tech ecosystem. I walked more than 100km (I’m sure this isn’t a record but it felt like it should be at times), and now I’m back it’s time to reflect on what mattered, what the key themes were and where the industry is heading…all from an IoT perspective naturally.

IoT is happening. I discussed some of the key assumptions behind connection growth recently in this blog [1]. We expect consumer IoT connections to almost double between 2018 and 2025, to 11.4 billion, and forecast the smart home will be the largest and fastest-growing consumer IoT segment.

GSMA Intelligence’s definition of smart home covers appliances including fridges and washing machines; infrastructure, for example routers, extenders and other networking devices; security products; and energy monitoring devices including smart plugs, lighting, air conditioning and thermostats.

But not everyone has smart or connected devices in their home. Reasons differ as to why this is but the top three responses from our Consumer Insights Survey are they don’t see any benefit in using them; think devices are too expensive; and privacy and security concerns, which is understandable in the current climate (see chart, below, click to enlarge).

[2]Integration and compatibility challenges come lower in terms of importance, but as this question was addressed at non-users it is possibly not a surprise. We would reasonably expect these to have featured more highly had we sampled existing users (as anyone who has found themselves shouting at an awkwardly stubborn voice assistant will testify).

During our GSMA Intelligence seminar at CES, Do your customers know what IoT is? we discussed all things IoT: how enterprises transform their operations, how operators and vendors are planning their connected device strategies and work together. Challenges pertaining to IoT adoption remain, across both enterprise and consumer segments, but we all agree IoT offers a sizeable opportunity.

Russell Gyurek, director of the IoT CTO Group at Cisco, who participated in the IoT ecosystem panel said it is clear “that while IoT has become a mainstream topic across a number of sectors and verticals, end user concerns are hampering adoption in some areas, namely, perceived value in association to cost, security and privacy, and implementation complexity.”

“Cisco is actively engaged across the market ecosystem to resolve these issues and drive the realisation of IoT value.”

There was a clear recognition across the panel participants that ecosystem collaboration is key to realising IoT value. So what are my key takeaways from this year’s show?

Coming together to simplify the smart home
Once again we saw a vast array of connected consumer products being announced, from pillows to panties! Whether or not these represent realistic use cases which create value is up for debate. This year certain smart home devices were omnipresent and very much support our view on how the market is developing. I saw a plethora of security/surveillance cameras scattered throughout the show, with smart lighting (bulbs, light strips and switches) and smart door locks not far behind.

Hundreds of manufacturers are competing using dedicated applications, platforms and various connectivity protocols. While smart speakers have been trying to address integration concerns, creating ecosystems around virtual assistants (such as Amazon’s Alexa) has led to a largely bifurcated market depending on your choice of voice assistant and the lack of true interoperability has stubbornly remained. This is a widely recognised issue, though, and initiatives around standardisation and security (Connected Home over IP and Open Connectivity Foundation) echoed throughout the show. This signposts that major manufacturers are coming together to work on standards under the shared belief that devices should come with privacy and security built in from day one, but also be able to seamlessly integrate with each other.

This will deliver clear benefits to consumers and developers alike. It also addresses some of the abovementioned consumer barriers and concerns. With big tech now focusing on interoperability within the home, an interesting challenge to telecoms operators is whether or not they can use this to their advantage and deliver services OTT in what could prove to be an interesting role reversal.

More robots
The cuteness factor in robotics prevailed: LOVOT (the huggable robot); Samsung’s Ballie (robot that rolls around the house); and Charmin’s RollBot (toilet paper delivery bot) all captured attention at CES. However, in addition to those companion robots more enterprise oriented use cases were displayed: highlights included Guardian XO’s exoskeleton to aid humans lift heavy loads and Omron’s cobots which help power factory automation.

Health matters… even more
The focus in 2019 on wearables and sleep was extended this year to include medical sensors for home diagnostics and monitoring to measure blood glucose, fertility, arrhythmia, blood oxygen and, in some cases even communicate with health professionals. We see this category growing in the future as increasing proportions of the society use medically prescribed devices to manage chronic diseases. 2020 is also the first year that sex tech officially made it onto the show floor – possibly an attempt to right the wrongs of the prior running.

Vehicles, present and future
Ever popular, next generation vehicle technology took over an entire hall again this year hosting concept cars and flying taxis. In addition to the usual suspects, players not typically associated with auto tech such as Panasonic, Sony and LG Electronics also showcased how their technology will feature in the cars we will all be darting around in soon.

Data and AI
An omnipresent topic at events these days, and growing in importance as more and more devices are being connected. After all, IoT is all about data and the value it generates. Vendors are looking to create services and experiences: cases in point are LG Electronics’ vision of “everywhere is home” and Samsung announcing this as the “age of experience”. Both these highlighted the importance of AI in creating personalised experiences to make our lives more convenient.

LG Electronics president and CTO I.P. Park noted extensive cross-device collaboration will be necessary to enable AI systems of the future, with collective intelligence imperative to expanding capabilities beyond simple automation to achieving AI’s Level 4: reasoning.

AI also derives value beyond the consumer realm; Omron displayed FORPHEUS, AI-equipped robotic table tennis tutor capable of emotional intelligence to motivate the player. John Deere showed how it leverages AI to power its See and Spray technology to differentiate between weeds and crops. It is worth noting, though, that 95 per cent of the AI compute required is on-board. As this becomes the norm for industries such as farming, the case for edge compute could really start to make sense.

IoT is not just about devices being connected, it is about the benefits it delivers to end-users, be it consumer or enterprise. CES 2020 proved that the industry has started to move in the right direction.

– Sylwia Kechiche – principal analyst, IoT – GSMA Intelligence

The editorial views expressed in this article are solely those of the author and will not necessarily reflect the views of the GSMA, its Members or Associate Members.

[1] https://www.mobileworldlive.com/blog/intelligence-brief-what-is-hot-and-not-in-iot/
[2] https://www.mobileworldlive.com/wp-content/uploads/2020/01/GSMAi_smarthome_consumer_demand.jpg

I’m far from being a CES veteran. I think you need at least a decade of attending under your belt before you can call yourself that. But, I’m more than half-way there and put it on the GSMA Intelligence travel agenda in 2019. In part, that’s because CES has evolved beyond being a consumer show to look at everything from consumer technologies, to content and media, to enterprise digital transformation: if you’re trying to understand the evolving tech landscape, CES probably has something for you.

Beyond the evolution of CES, however, the evolution of the GSMA Intelligence content agenda is at play here. As we’ve expanded our focus on IoT, enterprise transformation and the digital consumer, a trip to CES is essentially mandatory.

Building on things like our massive survey of consumers around the globe, and our Future of Devices research (our most-read premium report of 2019), we go into CES 2020 with a solid idea of what we’ll see and what will be making headlines. We also go into the show with a clear set of questions we’re looking to learn, grouped around a core set of topics.

5G
With 5G services moving from theory to reality in 2019, we got a glimpse of what the 5G future will look like. There are still plenty of questions about where it goes next, and how fast.

Phones and 5G. Will we see plenty of new 5G smartphones get launched? At prices affordable enough to drive 5G service adoption? Will flagship devices be 5G by default?

Phones and functionality. What types of features and functionalities will be table stakes in a 5G phone? What will 5G phones integrate in order to take advantage of 5G’s capabilities?

Beyond phones. Smartphones aside, what other form factors will we see 5G creep into? Tablets? Laptops? Cameras? Smart home devices?

Operator opportunities. Will we see operators fully leverage 5G as a component of their strategy to move deeper into consumer electronics and digital lifestyle businesses? How?

IoT
If it’s a connected device, but not a smartphone, tablet or laptop, is it necessarily an IoT device? CES probably won’t help with creating one true definition of IoT, but it will help chart the path to 25 billion connected devices.

Standards evolution. As IoT matures so do the standards. In order to scale the market, though, they need to be interoperable. Where will progress on this front go?

Smart home. Many people claim to be smart home adopters. For most, that’s only partly true. Will new innovations be compelling enough to drive more than one or two devices into the home? Will the smart speaker really be the controlling hub?

Platforms. Today, we’ve got multiple protocols, platforms and vendors. True fragmentation. There are signs the industry is coming together. Too little too late?

Operator opportunities. With so many players vying to take a lead in providing smart home solutions it is a tough space for operators to move into. Will we see some more attempts to capture this space and will these focus on the enterprise or consumers?

Enterprise/Verticals
There’s a reason why it’s now called CES and not the Consumer Electronics Show. Enterprise solutions are an increasingly important part of the event. The organisers are keen to highlight the role of non-traditional exhibitors (think P&G, John Deere, and DuPont) and we’re keen to see what they tell us about digital transformation.

Drones, drones, drones. As unmanned vehicles capture the skies, will the primary CES focus be new use cases? Enabling innovations focused on security, management, and control?

Cars, cars, cars. Autonomous cars will again be on the show floor for, if only because they draw people into a booth. As with drones, the key question is where we’ll see the focus. New models and entrants, or ecosystem enablers focused on computing, sensors and entertainment?

5G and private networks. Dedicated, localised wireless coverage is in demand: operators, vendors and integrators are all targeting the opportunity. As CES embraces the enterprise, will we see this demand reflected? If not, does it say more about the opportunity or the CES enterprise focus?

Operator opportunities. Will operators show up at CES ready to make noise on the enterprise front and, if so, in what form? New service offers, partnerships, or end-to-end solutions?

Content and media
Among those non-traditional exhibitors is NBCUniversal, a clear nod to the role of media in the life of the digital consumer. But the CES focus on content is more than video.

XR, for real. How do we go from having tech-ready consumers to actual adoption of AR and VR technologies? If compelling use cases are key, will we see new use cases which promise scale in the next two or three years, and will these target consumers or enterprise?

Gaming glory. Gaming has always been a CES focus. Will we see mobile industry priorities like 5G, AR, and edge computing show up?

5G opportunities. How does 5G really fit with the future of content and media beyond connectivity? If it’s mostly around production, will that be enough to drive excitement?

Operator opportunities. Content in all its forms has been a major driver of mobile traffic and a major focus for operator service strategies. Will this be reflected at CES, if so, in which spaces and, if not, why not?

Everything else fun. When people (like non-work friends or tech-focused relatives) say they’ve always wanted to go to CES, it’s because they think it’s all about gadgets and fun technology demos. And, to be fair, a lot of the GSMA Intelligence team will be looking to understand which of those are not (strictly) work related.

National Pride. Just like MWC, the CES exhibit hall has its fair share of national delegations, highlighting national R&D priorities and favoured happy hour drinks. But is it beer, or wine or aquavit that is most conducive to innovation?

Google versus. Amazon. In 2019, Google and Amazon were in a battle to get their voice assistant technologies integrated in any and every possible connected device. How will that battle work out this year? Will it move into new territory?

Terry and Mandy. Yes, content is part of the GSMA Intelligence content agenda. No, attending the NBCUniversal Keynote on Wednesday with Mandy Moore and Terry Crews won’t strictly be informing that content. It may help with questions like whether or not Mandy will go back to singing or if Terry is really as massive as he appears on TV.

Green tech thinking. Sustainability is officially one of the conference topics. The sessions dedicated to it seem somewhat sparse, but quality always trumps quantity. Will that quality be apparent in what vendors come to talk about?

These aren’t the only questions to be asked (or answered) going into CES. However, as we look to get a grip on the shape of technology innovation circa 2020, they’re a place to start. If you’ve got others, shoot them our way (in the comments). We will be putting together a wrap-up analysis of our views post-show and it’s always helpful to see what’s on people’s minds.

– Peter Jarich – head of GSMA Intelligence

The editorial views expressed in this article are solely those of the author and will not necessarily reflect the views of the GSMA, its Members or Associate Members.

From Brussels and Davos, the CEOs of Google and Microsoft respectively, recently voiced support for regulating AI. Over the last months, we have seen acceleration of ΑΙ regulation efforts coming out of the European Union (EU) with the European Commission (EC) vowing to deliver a legislative framework for AI within its five-year term to 2024.

Details about whether this will represent tweaks of existing frameworks, principally GDPR, the EU data regulation which set the standard for data privacy globally, or a more comprehensive set of additional measures, remain unknown. However, leaked documents provide indications about where the EC is heading with AI regulation, highlighting three trends and associated implications.

AI applications versus risk levels
A would-be AI regulatory framework might require companies to self-assess the potential risk attributable to their own AI-based services. Such a categorisation would exist along a continuum based on the sector and the application. For example, healthcare will be a high-risk sector when combined with AI, while autonomous cars will be a high-risk application because if AI fails, it could cause fatalities.
In this scenario, companies would have to put new procedures in place to understand and justify the levels of risk their AI-based services involve. Assessments would likely include the potential impact on consumers and seek to quantify the risk from algorithmic bias and data sourcing by third-party developers which contribute to a given company’s services. Regulators would have to carefully craft legislation that does not unduly put extra operational burden or re-engineering costs, particularly when GDPR is already in force. Against this backdrop, and given AI is a fast-moving field, it may be more feasible and instructive to adopt a phased approach prioritising high risk areas in the first tranche.

Tech innovations, privacy risks and empowering individuals
Another option the Commission is reportedly mulling involves giving people an enhanced personal data portability right. In the recent Consumer Insights GSMA Intelligence survey, we discovered a relatively large proportion of respondents (22 per cent, second in order of preference among tech companies, operators, regulators and state authorities) believed they themselves should be responsible for their own data safety. In this spirit, regulation should encourage AI services vendors to create tools which help users manage their privacy risks. This could include some or all of:

Explainable AI, an emerging branch of AI systems aiming to explain and reason every decision made in a manner easily understandable by humans affected by or related to it.
Digital sovereign identity, based on Blockchain, and enabling individual users to fully own and control their digital history, along with any data they shared.
Zero knowledge proofs, cryptographic methods by which a user can prove to another user, say an AI service vendor, that they know something to be true without conveying any additional information.

Data and data hubs – the role of public sector and industrial data
The EU announced it will spend €1 billion on creating “common European data spaces”, expanding its existing public sector data hub to also include industrial data sets. The EC’s strategy is to help European companies capitalise on the data they generate and eventually catch up in the AI race against the US and China. These can be a prime instrument for innovation, benefiting smaller companies and individuals with regards to more open, cheaper, better quality and more diverse data access. All of this is particularly relevant for accelerating AI innovation. However, interoperability across existing data hubs is far from a done deal. Scaling these at an EU-wide level would also raise intense debate about their governance.

To sum up, a mix of light and smart regulation won’t be an easy task as it would have to balance out a number of trade-offs like stricter rules versus space for companies to innovate. Emphasis on technologies which empower individuals and companies to manage AI-related risks is probably the most prudent thing to do for policy makers and regulators, but it’s also up to the tech companies to deliver through tech tools. Finally, without a doubt, the EU perceives AI as a core element of its Digital sovereignty strategy. However, the EC’s intentions towards common European data spaces remains unclear for now, risking delays to progress. What exactly does ‘European’ data mean and how is it possible that only European companies could be profiting from these, a point Politico reported Internal Market Commissioner Thierry Breton raised at a tech conference in December 2019 when he outlined a goal for European companies to have access to domestic data to “create value” in the bloc.

What difference would that make to current requirements for data centres to reside in the countries they operate in? And, how is that conducive to AI innovation?

The EU is setting the bar very high. It needs to give fast and bold answers before criticism starts to gather.

– Christina Patsioura – senior analyst, Emerging Technologies, GSMA Intelligence

The editorial views expressed in this article are solely those of the author and will not necessarily reflect the views of the GSMA, its Members or Associate Members.

In terms of share price performance, 2019 was a mixed year for the telecoms sector. A number of companies delivered positive returns, even if many underperformed their local market indices. In Europe the telecom sector (covering fixed and mobile operators) achieved positive returns (around 6 percentage points in terms of total shareholder returns or TSR), but still trailed well behind the broader European market, which delivered returns of more than 20 per cent. The US was generally more positive, with T-Mobile US and AT&T outperforming the S&P 500, supported by generally positive news around competition and consolidation.

Share price performance across Asia was more muted, but with a number of notable weak performers. A number of operators in both China and South Korea ended the year at 12-month lows. In India, share price performance of the locally listed operators was sharply polarised: while Bharti Airtel delivered a positive TSR of 37 per cent, Vodafone Idea posted a decline of just over 80 per cent.

Consolidation: risks on the downside
In-market consolidation deals are generally seen as positive by the financial markets, with the assumption that easing price competition and scale/merger synergies will generate incremental shareholder value. Hope springs eternal for further consolidation in the European telecom sector, a region which remains highly fragmented with far more operators than markets such as the US and China. A number of consolidation deals over recent years have given the promise of more to come, with hopes over the course of 2020 the EU competition authorities could take a more relaxed stance.

An important factor will be the focus on 5G and the desire to see Europe take a leading role in the technology, given perceptions (and indeed the reality) the region lost its mobile technology leadership with the transition from 3G to 4G. However, recent news flow suggest Margrethe Vestager (reappointed as Competition Commissioner [1]) would be more supportive of cross-border deals than in-market consolidation. While these deals have a poor track record in terms of value creation for shareholders, such a stance may be driven by a desire to see the emergence of regional champions.

The outlook in the US will rest on a single key decision, the final approval of the proposed T-Mobile and Sprint merger. While the deal was approved by both the FCC and Department of Justice, the final hurdle is a court case [2] brought by thirteen states and the District of Columbia, which argue the deal will be anti-competitive. After almost two years of overhang since the original merger announcement, 2020 will at least bring closure on the issue, but at the same time could herald a major redrawing of the competitive landscape in the US.

Politics: the wildcard
Telecoms is generally seen by investors as a fairly defensive sector and can be something of a safe haven in terms of heightened geopolitical risk, but the sector also faces a range of more specific and localised political factors in 2020. The upcoming US presidential election will increasingly loom large in news flow and investment decision-making as the year progresses. The Trump administration is generally seen as relatively sector friendly, certainly from a policy perspective, even if the trade dispute with China caused some friction.

A change of administration could raise new challenges. Topics which could see more stringent regulatory decisions under the Democrats include net neutrality and antitrust policies.

Political factors in Europe tend to be less clear-cut, though a proposal from the UK’s Labour party to part privatise BT had a significant (albeit short term) effect on the share price and was a further reminder to always expect the unexpected. A new European Commission took office in December 2019: beyond the consolidation issue noted above, there may be greater support for network sharing and the scope to spinout network assets.

Can 5G impact revenue growth?
Isolating a single factor as a key driver of share price performance can be a challenge, but 5G is likely to dominate sector news flow in 2020 and will certainly have a major impact on share prices. The initial readings for 2019 are not overly positive. South Korea, for example, saw some positive KPIs around consumer 5G adoption and ARPU uplift. As noted earlier this has not fed through to improved share price performance.

The biggest challenge is the range of moving factors encapsulated by the single phrase 5G:

Will a growing number of 5G handsets and increasing adoption lead to the return of device subsidies and a hit to operator profitability?
Will pricing discipline hold in those markets where 5G is priced at a premium to 4G, allowing a period of sustained ARPU uplift?
Capex has shown some signs of an uptick in markets including the US and China as operators begin 5G deployments, while remaining flat in Europe. A growing number of network sharing deals in Europe will help on this front, with markets generally cautious around the prospects for higher capex until there is greater clarity on the likely returns.
Spectrum auctions are expected across many markets in 2020 to release vital 5G spectrum, which will add to pressure on sector cash flow even if capex remains under control.

What to expect in 2020
Making share price predictions for the sector or individual companies can be challenging at the best of times, with 2019 showing a range of outcomes across regions and within individual markets. The market consensus is generally cautious for the year ahead, with the broad expectation the telecom sector will underperform local market indices.

What is certain is there are an even broader range of factors which will influence share prices in the current year as compared to 2019, with most decisions and key events likely to produce both winners and losers.

It would be nice to predict an overriding theme, preferably a positive one, which could see a rising tide lift the overall sector. While 5G is likely to be the dominant theme in 2020, the broad range of uncertainties the issue brings will make it hard for markets to come to a clear agreement on the impact of 5G, whether positive or negative. Ultimately, near term share price performance and valuations will more likely be driven by local considerations, whether political or around consolidation and competitive factors.

Longer term, upside to telecom valuations will likely require a new sector growth story. This will depend on emerging revenue streams in new consumer services (beyond more-for-more speed upgrades) and by operators taking a more proactive role in the ongoing process of enterprise digitisation. 5G will certainly play a key role in both these areas, but success will also require factors such as new business models and more agile organisational structures.

– David George – head of consulting, GSMA Intelligence

The editorial views expressed in this article are solely those of the author and will not necessarily reflect the views of the GSMA, its Members or Associate Members.

[1] https://www.mobileworldlive.com/featured-content/top-three/vestager-remains-eu-competition-chief/
[2] https://www.mobileworldlive.com/featured-content/top-three/states-hit-back-in-sprint-t-mobile-merger-case/

In 2019 we saw great progress for the open source telecom networking community, with lots of announcements coming out of the TIP Summit in November, and trials and deployments across the year with some key examples including:

Using open RAN gear, Internet para Todos, a Telefonica investment, connected about half a million customers in Peru to 4G services for the first time.
MTN [1] committing to deploy Parallel Wireless open RAN solutions to around 5 per cent of its networks in Africa.
Vodafone Group’s game-changer tender [2] which opens up its European footprint for open RAN solutions.
Rakuten Mobile, a greenfield operator building its 5G networks using open and virtual RAN [3] architecture.

(For further insights on the above check out TIP Summit: unlocking vendor lock-in with Open RAN [4])

Today, while we are still in the first few weeks of 2020, new and exciting developments in the open source networking ecosystem are inciting more activity: two, in particular, stand out as instructive.

O2 UK’s open RAN partnerships boost a host of network enhancements
This month Telefonica’s UK arm O2 announced a partnership with three challenger vendors planning to commercially deploy open RAN solutions across the country.

DenseAir – to power 5G V2V and V2X testing
Working with DenseAir, O2 will focus on 4G and 5G networks over the open RAN solution. At the Millbrook Proving Ground, a technology park for vehicle testing in the UK, the partners will provide 5G public and private networks enabling testing and development of CAV technology. This collaboration will power the testing for ITS networks and enable the first V2V and V2X testing over open RAN.

Mavenir – to enhance coverage and capacity
This partnership will see O2’s coverage and capacity in high-density environments in London enhanced. Locations will include shopping centres and stadiums.

WaveMobile – to cover not-spots
The pair will develop solutions to provide community-based mobile services in so-called not spots. The vendor is already providing O2 with its open RAN network on several sites across the UK including carrying O2 customers.

As O2 is expecting the work to accelerate over the next 18 to 24 months, these partnerships highlight the growing vendor ecosystem which provides open source networking solutions and showcase a vast range of capabilities, while also making it clear O2 is still putting a diverse set of vendors through their paces.

Open source networking to get a boost from Washington
In light of persistent pressure from the US to exclude some vendors from global 5G networks, politicians around the world have taken notice of the small set of suppliers the telecom industry has been relying on to build mobile networks.

Of course, operators have long sought agile and cost-effective ways to build and maintain their infrastructure in response to persistent cost or cash flow pressures, and a broad set of suppliers is important on that front. But recent supply chain security concerns and efforts have brought awareness about the limited number of mobile network vendors to the fore.

Against this backdrop, the open source networking movement could receive an unusual boost. In the early weeks of 2020, the US Senate introduced bipartisan legislation which (luckily for open source networking) could see the Federal Communications Commission provide more than $1 billion to help develop western-based alternative vendor technologies.

The largest share of the monies, around $750 million or up to 5 per cent of annual auction proceeds sourced from new auctioned spectrum licences, would be reserved for open architecture (including open RAN) and software-defined development models.

While security concerns may have ignited this move amongst politicians, operators understand the open source model offers benefits beyond security including cost saving, leaner operations and a reduced vendor reliance (to name a few). This is the second key catalyst for open RAN in 2020, providing a financial boost for research and development of open source solutions.

What could slow down achieving scale?
While these developments showcase the immense accomplishments of operators and challenger vendors alike, there remain further barriers to scaling up which must be addressed.

[5]

From our recent work with operators to better understand their network transformation strategies, a limited vendor ecosystem was highlighted as the greatest barrier to deployment of open source and open networking technologies. The good news? The progress we’ve seen in the first few weeks of 2020 alone. O2’s announcement showcased three challenger vendors with strengths which will support coverage and capacity enhancement, provide connections to not-spots, and power V2V and V2X. And while the O2 plans show the deployment of open RAN in targeted settings, rather than large (national/regional) scale, the general path of adoption makes sense as the following two points illustrate:

High density deployments rely on expensive small cells. Due to the open interfaces of open RAN solutions, operators can share the cost of a given mast with peers and financial partners to reduce the effective cost.
The coverage of not-spots or sparsely populated areas with weak coverage traditionally have relied on fibre rollouts which, again, are commercially often unviable. Operators which can subcontract the capex to an open RAN supplier, such as in the O2-WaveMobile partnership, can retain the customer relationship while leasing spectral capacity (the local network) to their supplier and, thus, saving money and protecting assets from being stranded.

These building blocks, while small scale steps, will lead to larger deployments as more companies try out the concept and report back successful best practices, hopefully leading to a snowball effect attracting more operators as well as a larger share of their networks running on open solutions.

Further, funding support out of countries such as the US (and one can be hopeful more will follow the example) will further enable the industry to build a diverse supply chain. And, as other operators such as Telefonica and Vodafone Group continue to spearhead the movement, concerns around RoI and tech maturity will diminish over time.

As to lack of internal ownership and expertise, this highlights the greater role industry partners including system integrators like IBM and vendors with teams providing E2E services, for example Mavenir, will need to play, not only in stitching the technologies provided together, but also by coordinating or even educating internal staff as part of a handover process to enable greater ownership.

– Armita Satari – analyst, core mobility, GSMA Intelligence

The editorial views expressed in this article are solely those of the author and will not necessarily reflect the views of the GSMA, its Members or Associate Members.

[1] https://www.mobileworldlive.com/featured-content/top-three/parallel-wireless-secures-mtn-openran-deal/
[2] https://www.mobileworldlive.com/featured-content/home-banner/vodafone-offers-europe-up-to-openran/
[3] https://www.mobileworldlive.com/asia/asia-news/rakuten-expands-free-trial-targets-april-launch/
[4] https://www.gsmaintelligence.com/research/2019/11/tip-summit-unlocking-vendor-lock-in-with-openran/830/
[5] https://www.mobileworldlive.com/wp-content/uploads/2020/01/GSMAI_Blog_Chart_OpenSource_Obstacles.png

With MWC traditionally being a showcase for network vendor innovations, keeping up with all launches from all key players is never an easy feat. That’s why suppliers often take time to update the media and analyst communities just before the show begins. MWC20 might have been cancelled, but those pre-briefs still went ahead.

Taken as a whole, these events might seem to present a picture of how networks will evolve. They don’t. Instead, they simply provide insight into how specific suppliers see the market. And, while it’s important to understand what each vendor is doing to move the market forward, Huawei’s analyst event from last week stands out for a few reasons:

Huawei is the market’s biggest networking player.
With network infrastructure, device, and enterprise businesses, it brings a unique perspective.
Winning a total of six GLOMO Awards, suggests impressive R&D efforts; and
The status of its annual analyst conference (an opportunity to dig deep into its product and technology roadmaps, traditionally scheduled for April in China) remains uncertain.

Returning, then, to the idea a vendor’s messaging (and products) reflects their view of market realities, we can ask “what have we learned from Huawei?” What does it see as major market priorities and drivers? What products follow? And, most importantly, do these views align with market realities?

5G credibility: momentum and solutions
Message and credentials
Like most vendors, Huawei is quick to point out its 5G successes (91 commercial contracts) and the breadth of its 5G offering. Including RAN, core, transport, IT and cloud infrastructure, and devices, the offer is certainly comprehensive.
Market view
While end-to-end solutions and references are a staple of vendor marketing, operators don’t necessarily prioritise them in their purchasing decisions: our latest research shows security, pricing and performance being more important. That said, if the value of early momentum and broad assets can be explained, it will be convincing.

Spectrum: 5G versus fragmentation
Message and credentials
With 5G best deployed in large bandwidths (100+ MHz), Huawei highlights the need for operators to leverage disparate spectrum assets, something few in the industry would dispute. To cope with this, Huawei introduced wideband radio assets (up to 400MHz across the C-band), an all-in-one active antenna unit (AAU) supporting multiple sub-6GHz bands, and played up the use of software algorithms to optimise 5G performance in a given amount of spectrum along with its CloudAir Dynamic Spectrum Sharing solution.
Market view
As a scarce (and costly) resource, operators continue to view any technologies which maximise the use of their spectrum as critical: in the 5G era, new spectrum allocations are one of the top investment considerations. Disappointingly, operators do not yet see the use of AI and automation for spectrum management being as important as other use cases, making messaging on this front all the more important.

Spectrum: super uplink
Message and credentials
Use of TDD spectrum has long promised an ability to tune uplink versus downlink capacity to meet market demands. Unfortunately, FDD spectrum allocations remain the norm in most markets and, regardless of allocation flexibility, propagation in higher frequencies represents a fundamental uplink barrier. Allowing TDD/FDD coordination and TDD/TDD coordination for improved uplink, Huawei highlighted its Super Uplink technology as a solution for improved uplink speeds and latency.
Market view
The Super Uplink solution isn’t new: it was released in June 2019. New messaging around end-to-end support, however, add credibility. This helps to move the technology from a concept to something that operators can understand how they might deploy. Perhaps more importantly, though, a reference highlighting the 3GPP has “officially accepted this innovative technology” takes it from a proprietary offer to something that could be supported by a broader ecosystem.

5G Services: slicing and the core
Message and credentials
Improved uplink and latency performance, speak directly to the specific requirements of enterprise and industrial 5G use cases. And, supporting consumers alongside enterprise verticals (leveraging a common network) speaks to the value of network slicing, with Huawei spotlighting its end-to-end offer including service management, slice management, performance management and AI-based operations tools.
Market view
Like its Super Uplink solution, talking up network slicing in support of industrial digital transformation is not new for Huawei. And, Huawei wasn’t alone in doing this: Nokia announced its own, end-to-end, network slicing offer [1] just this week, claiming to be first for 4G and 5G support. Regardless, added details around the components included in Huawei’s Slicing offer (CSMF, NSMF, et cetera.) and the network components touched (UE, RAN, transport, core) paint a picture of a more complete, and credible, offer. Compared with capabilities like URLLC support and a simplified network architecture, network slicing does not rank high as a standalone 5G benefit. If, however, end-to-end solutions (including simple operations and management) can bring network slicing closer to a scalable, commercial reality for operators, then that prognosis could improve.

Green operations: power consumption versus data consumption
Message and credentials
With the launch of every new mobile technology generation, a renewed focus on network operations energy efficiency is only natural. After all, electricity bills add to overall costs. In 2020, with signs of climate change registering across the globe, energy-efficient network operations are a greater priority than ever. For its part, Huawei highlighted AI and automation tools which regulate network operations (turning off channels, carriers or symbols as appropriate) across technologies and spectrum bands, while outlining how 5G paired with its massive MIMO innovations can deliver much more data (50-times compared with 4G) for a given amount of power consumption.
Market view
There can be no doubt that green network operations is a key operator priority. But, where the headline energy efficiency stories from Huawei (automation, and 5G data-versus-energy consumption) are also likely to be claimed by competitors, a host of other innovations tell a more complete story: silicon-level integration for improved efficiency, gallium nitride (GaN) power amplifiers, use of green technologies (solar, wind) in rural areas, and energy efficiency included as a consideration in site survey tools. Competitors will, doubtless, make similar claims. Regardless, treating energy efficiency holistically signals it is more than just a passing fad or narrow marketing message.

Enterprise communications: Wi-Fi for the campus
Message and credentials
In a departure from the discussion around 5G and mobile networks, Huawei took time to announce its HiCampus solution for Wi-Fi connectivity across enterprise campuses. Why? In part, because the vendor can claim its new Wi-Fi 6 products borrow from its 5G R&D. In part, because the enterprise campus is a critical centre of business activity. In part, because of some impressive product and performance claims: ten new Wi-Fi 6 APs, 10 milliseconds latency, 10Gb/s throughput, 100 Mb/s guaranteed across the deployment.
Market view
As a part of their 5G deployment planning, integration with Wi-Fi is not a major focus for operators: it’s one of the least important 5G RAN priorities. For Huawei, however it’s an important asset. It helps the vendor differentiate against others which don’t have the same depth of enterprise assets or scale. And, while Huawei’s Wi-Fi messaging could raise questions about use cases around Wi-Fi versus private networks versus network slicing, any discussions on this front simply provide solution suppliers with another opportunity to engage (and sell to) their customers.

Of course, these products and messages are just a sample of what was discussed at Huawei’s product and solution showcase last week, and a fraction of what they will likely be announcing over the next weeks. But, if we expect 5G roll-outs to pick up pace this year, then there’s no doubt competition across 5G network vendors will pick up as well. Understanding the strategic priorities of leading vendors, then, provides a glimpse into how that competition will play out over the year.

– Peter Jarich – head of GSMA Intelligence

The editorial views expressed in this article are solely those of the author and will not necessarily reflect the views of the GSMA, its Members or Associate Members.

[1] https://www.mobileworldlive.com/featured-content/top-three/nokia-readies-network-slicing-launch/

In November 2018 we looked at the implications of a growing shift among operators to share or divest tower assets [1]. Two clear takeaways emerged:

5G necessitates a different network strategy. Unlike previous generations, 5G deployment is not only about adding more sites and increasing backhaul capacity. In fact, it is more about rethinking the whole network architecture to make it agile. The high capacity requirements of 5G will necessitate the use of small cells in cities and areas of high footfall (such as airports) to complement national macro networks. Private networks (for example to sell into enterprise customers) and the concept of a neutral host (such as for sports stadiums) are further examples of diversification.
Decoupling. The traditional vertically integrated model of network ownership in which operators own and control all passive (sites and towers) and active (radio access) infrastructure is being joined by a decoupled approach where parts are owned and operated by a third-party (such as a tower company)

With the 5G becoming commonplace, operators are under constant pressure to address deepening financial and market pressures, as required infrastructure funding increases dramatically in the face of the investment-heavy evolution toward 5G. How much will this all cost? A report published in 2019 by GSMA Intelligence predicted an outlay of about $1 trillion [2] alone on 5G between 2019 and 2025.

This represents a massive cost pressure, particularly given low revenue growth. As a result, the industry has been driven to look at multiple ways of keeping costs in check. Most discussed and perused so far are voluntary network sharing, virtualisation and the shift to open RAN. But, as 5G opens up new network infrastructure models, new operations models need to be considered as well: small cells sharing (or partnerships with municipal authorities); private network launches; and creating neutral hosts. While, to date, infrastructure sale and leaseback deals are more common (where an operator sells towers to a TowerCo or other third-party on the proviso it will be able to lease access), the structural separation of assets is another option worth consideration.

Yet, as much as we might call these new models for a 5G era there are examples to look to in terms of guidance going forward.

O2 Czechia
In 2014, PPF Group, a local private equity fund, bought O2 Czech Republic from Telefonica and separated the network (privately held and known as Cetin) from the retail business (publically listed). The deal not only benefitted the new owners: the country received a significant infrastructure upgrade as well. The creation of a pure network infrastructure player lowered borrowing costs and improved capital access such that Cetin increased its network capital expenditures by 40 per cent a year after separation. From there on, capital expenditures increased by 13 per cent annually. This led to a jump in fibre coverage and broadband speeds at a level rarely seen in Europe.

[3]

Reliance Jio
Reliance Industries demerged its telecom infrastructure, including tower and fibre assets, into a separate company, which has been monetised through a deal with private equity company Brookfield Asset Management. Following the separation, Reliance Jio has become asset light, having a balance sheet size of $33 billion. Now, by putting all the digital entities under a new company, Reliance Industries is readying the services arm for a better customer experience and deeper penetration, eventually converting into better valuation. The company already made it clear that it will list Reliance Jio’s shares in the market. The new arrangement makes the operator, almost debt-free, thus improving its valuation.

Telstra
Spun out its infrastructure assets into a new business called Telstra InfraCo, which managed approximately $11 billion in network infrastructure assets. Telstra started recognising internal access charges in its fiscal 2019 (the year to end-June 2019), the fees Telstra essentially pays itself for accessing its own infrastructure. With these charges included, InfraCo’s revenue rose 51.6 per cent to $4.95 billion. Telstra is now planning on transferring all of its mobile infrastructure into the business, which is now a semi-autonomous unit.

TDC Group
The Danish operator was acquired by a Macquarie-led consortium of buyers at a 34 per cent premium to the market price with a structural separation initiative as one of the core pillars of value creation justifying the takeover.

These examples might make network disintegration look lucrative, but it is not a simple copy-paste framework. It is a very complex and unique call to make for each operator; it can never be generalised. However, we can certainly look at some basic factors critical to be assessed while thinking about spinning off network operations:

Regulation on access and control.
Quality and scale of infrastructure already in place.
Level of site fibre and network sharing.
Lack of modularity and complexity in operations.
Regulation on wholesale pricing.

Obviously, lower pressure on any of these fronts drives better odds of success. Regardless, as we move into fuller 5G deployments from operators large and small, we can imagine these considerations may not always be top of mind, particularly where high-profile examples lead to a copy-paste mentality.

In the process, we will see new failures, new successes, and might even see new models develop.

– Aryan Jain – research manager, strategy, GSMA Intelligence

The editorial views expressed in this article are solely those of the author and will not necessarily reflect the views of the GSMA, its Members or Associate Members.

[1] https://www.mobileworldlive.com/blog/intelligence-brief-what-are-mnos-without-towers/
[2] https://www.gsmaintelligence.com/research/2019/04/2025-capex-outlook-financing-the-5g-era/755/
[3] https://www.mobileworldlive.com/wp-content/uploads/2020/02/GSMAi_investment_bb_speed_chart.png

The mobile market in Europe has come to the end of its main phase of investments in 4G networks and operators are now turning their attention to 5G. Services have already been launched in some markets, for example in Switzerland and the UK, with more markets expected to launch in 2020.

Despite these positive steps, industry analysts do not expect a rapid rollout of 5G in Europe. On the contrary, most expect 5G deployments in European markets to lag behind countries such as the US, China, South Korea and Japan. The reason is that delivering 5G services will require large additional investments, and these will be a lot harder to justify in European markets that have recently delivered lower profit margins than other parts of the world.

With this largely subdued investment climate, what can be done so Europe doesn’t lose out on the 5G opportunity?

One thing which could change this is competition dynamics. More concentrated market structures (for example with less players) can deliver economies of scale, a more efficient utilisation of assets (such as sites and spectrum) and also enable large investments in 5G networks. However, concentrated markets can also raise flags with regulatory and competition authorities which may be concerned about consumer prices being higher.

Understanding the relationship between market structure and the quality, innovation and prices consumers can expect is, therefore crucial. A strong debate exists about the competition dynamics which will deliver best value for consumers in the 5G era. As arguments can be made in both directions, it is important to look at data from the recent past to help draw some lessons to inform decisions going forward.

What do we know from 4G?
This is precisely what we did. In a recent study [1], we evaluated how market structures impacted consumers during the 4G era in Europe. We looked at data covering the period from 2011 to 2018, for 29 European countries. We combined coverage and other publicly available data from operators with network-quality measurement data from Ookla, a global leader in mobile and broadband network intelligence, testing applications and technology.

And what did we find?

Overall, the 4G era was a positive and expansive one for European mobile consumers everywhere. While mobile performance is still far from perfect in all places, by 2016 already 90 per cent of consumers were covered by 4G networks. Since then, operators have delivered greater speeds and lower latencies (signal delay), resulting in a far superior consumer experience today. Download speeds increased on average from 2Mb/s in 2011 to 37Mb/s in 2018. The average price per MB also dropped sharply as mobile data became cheaper and users consumed ever-increasing volumes, with average monthly data usage increasing more than twelve-fold.

But while all European consumers experienced improvements during the 4G era, the study shows those in three-player markets benefitted the most from higher quality and innovation.

By the end of 2018, three-player markets were outperforming four-player markets by 4.5Mb/s in download speeds, and three quarters of that difference (around 3.5Mb/s) can be attributed to the role of market structure in three-player markets. In particular, operators in more concentrated markets were able to utilise assets more efficiently (especially spectrum) and generate higher returns that allowed them to invest more in their networks. This is an important insight when considering the best ways to unlock the full potential of 5G networks, including advanced applications that require very small signal delay, high speeds and plenty of network capacity.

These represent nice results. But, you might ask, did this come at the expense of higher prices?

On the basis of the pricing data we were able to analyse, it did not. In addition to general improvements in performance, prices also decreased across Europe in the 4G era, indicating more efficiency and better value for consumers over time. Implicit unit prices (id est, revenue per MB and revenue per user) decreased similarly in both three- and four-player markets.

In other words, during the 4G era, a European consumer in a three-player market typically experienced a better quality mobile broadband service while paying similar prices per MB of data to a consumer in a four-player market.

Lessons for 5G
Does this, therefore mean more consolidation in European markets is the only solution to deliver the right investments for 5G? Not necessarily.

An option often touted as an alternative to full consolidation is increased network sharing. Our analysis showed that in the 4G era, progressively deeper levels of network integration delivered improved performance, although they came short of full integration in terms of network quality. Network sharing could, therefore also help promote faster deployments of high-performing 5G networks in Europe over the coming years.

Ultimately, every case and country needs to be considered on the basis of its own merits and situation. What works in one country does not necessarily work in another, and operator incentives and consumer attitudes to products and services will differ from market to market.

But there is one key lesson from the 4G era that does apply to all countries equally: to support the delivery of high performing 5G networks, policymakers should fully consider all aspects of consumer welfare when assessing the relative advantages of more concentrated markets in merger control, antitrust policy and spectrum management.

– Pau Castells – director, economic analysis, GSMA Intelligence

The editorial views expressed in this article are solely those of the author and will not necessarily reflect the views of the GSMA, its Members or Associate Members.

[1] https://www.gsmaintelligence.com/research/?file=0daba30e69c834affcc6fd4eda33fd1a&download

A few weeks back, an operator customer asked if I would present some findings from the Network Transformation research we did late in 2019 to their executive committee, with a focus on open networking technologies. How are operators looking at open tech? How quickly are they moving on it? How are they positioned in comparison to what we’re hearing from other operators around the world? It’s the best part of the job when you’re an analyst.

Then, just as I was congratulating myself for prepping a full draft almost one week early, a handful of announcements were made which made me rethink the key messages I would focus on, one from Rakuten Mobile and two from Mavenir.

The news from Rakuten Mobile [1] got plenty of press coverage. That’s to be expected from nearly anything the operator does on the networks front, but this time it was a little different. Rather than just innovate in the delivery of services (and the deployment of its network) in Japan, new work with NEC aims to offer 4G/5G core capabilities to customers across the globe.

Mavenir, meanwhile, put out two decidedly less showy announcements focused on system integration partnerships with General Datatech and Goodman Networks. Each covered backing for open RAN deployment in the US, including solution planning and design; supply chain management; warehousing and logistics; deployment and testing; RF optimisation; performance monitoring; field services; and lifecycle support.

Flashy or not, though, the core message from each of the players was similar.

Bear with me for a moment: I understand the announcements were fundamentally different. Rakuten Mobile is moving forward on a new business model for offering 4G/5G core network capabilities on a global basis. Mavenir is developing partnerships for deploying open RAN hardware and software in the US. Ultimately, however, each company is focused on a similar aim: making open networking solutions easier to acquire and deploy.

In Mavenir’s case, this is done by engaging third parties to help add professional services capabilities to their networking solutions. In Rakuten Mobile’s case, this acquisition and deployment support comes in the form of new commercial models tied to cloud native network assets.

Now, this might seem like a relatively straightforward message (who doesn’t want to make technology easy to consume), but there is a key message here: open networking technologies, including open RAN, are not necessarily easy. It’s an important message because it tends to get lost in the (well-deserved) noise around the word open, despite the fact open source, open networking and virtualisation technologies represent the same type of telecom sea change as the move from circuit to packet networking.

Compared with solutions which leverage proprietary interfaces (or standardised ones which are not open) and/or proprietary hardware, open and virtual solutions are often positioned as a panacea for complicated deployments and commercial arrangements. This positioning falls down on two fronts.

Expertise. Integration issues ranked number two when we asked operators about the major obstacles to introducing open source and open networking technologies: 55 per cent see this as a challenge. In part, this can be seen as a function of will: the willingness of incumbent vendors to integrate with new suppliers and technologies. At the same time, it can be seen as a function of expertise, the in-house skills and capabilities necessary for integrating new technologies. This is where system integration support with a specific focus on open comes in handy.
Go-to-market. Even where an operator has the skills to integrate new open technologies into their network, or have partners in place to help, suppliers need to deliver those technologies in ways which are easy to consume and form a part of solutions, not just point products. Well, they need to do that if they want to reach the vaunted position of partner and be successful in their sales efforts. System integration offers help on the solution part. Cloud consumption models help with the consumption part.

And what does all mean for my customer and my presentation?

Well, the operator is by no means small, and its commitment to open RAN solutions is well known. But the fact it is still engaging with outside experts (along with people like me) to talk about their progress, technology challenges, business challenges and market trajectories is a testimony to the fact open networks and related technologies might be important, but that doesn’t mean they’re easy.

– Peter Jarich – head of GSMA Intelligence

The editorial views expressed in this article are solely those of the author and will not necessarily reflect the views of the GSMA, its Members or Associate Members.

[1] https://www.mobileworldlive.com/featured-content/home-banner/rakuten-looks-beyond-japan-with-fresh-nec-deal/