Nokia Mobile Networks Analyst Day 2024

Author: Shiv Putcha


Nokia is a company undergoing dramatic changes

Nokia is a company that is undergoing dramatic changes, not only in terms of a rapidly declining external environment but also in terms of pretty stark shifts in its strategy and internal alignment. Under CEO Pekka Lundmark, the company had already initiated a shift away from the end-to-end positioning that was espoused by his predecessor, Rajeev Suri, towards organic business units that were fully integrated and with empowered decision making. Perhaps stung by the loss of high-profile accounts like AT&T and an effective total retreat from North America, Nokia’s recent guidance has not made for pleasant reading and likely has helped accelerate the transition plan that had already been initiated. To be fair, there have been gains from other markets which have helped offset some of the high-profile account losses and market spend declines.

Nokia’s CEO made candid remarks highlighting guidance pointing to a top line decline of 10-15% in mobile networks, primarily due to the sharp declines in spending from India as operators there wind down their spending post the first wave of investment in 5G networks. While external headwinds continue, Nokia believes that the market has likely seen bottom and their expectation is a rebound, if not a surge, in spending as there is plenty of investment left to make in 5G, with Nokia citing research suggesting that only about 30% of 4G LTE sites globally have been upgraded to 5G. Besides operators investing in new 5G networks and brownfield operators upgrading to 5G Advanced, Lundmark also highlighted government support for “secure and trusted networks” as a key driver for Nokia as it is benefitting from swap outs in some markets.  


Nokia Mobile Networks strategic and design philosophies are in stark contrast to competitors

We had the opportunity to listen to keynotes from the leadership team at Nokia Mobile Networks (MN), including Tommi Uitto, Ari Kynaslahti, Mark Atkinson and others. There are a number of key takeaways that we noted about the Midsummer launches but also with the overall approach of Nokia MN relative to its key competitors.

  • The resurgent symbolism of the Midsummer launch cycle – Nokia has locked into a cadence of major product announcements at MWC Barcelona and launches at Midsummer. While disorienting to those of us who live in the tropics, Midsummer’s bright and warm embrace is an ideal time to bring innovations to market and can also be interpreted as symbolic of a resurgent Nokia.
  • Flexibility and breadth of portfolio – Nokia MN launched several new products cutting across small cells and massive MIMO base stations, for both indoor and outdoor scenarios, as well as new microwave products. While there was a common theme of smaller form factors and energy efficiency underlying all new products, it as also apparent that Nokia MN is taking a portfolio approach, with different products targeting different industry segments. The latter is an important distinction relative to competition, suggesting that the tremendous diversity in mobile operator networks needs multiple options, but also that Nokia is able or willing to invest in segments that some of their competition don’t. An example of this approach is the new Tuuli 26e baseband product, which supports compact outdoor sites from 2G to 5G. similarly, Nokia has launched a new range of “Kolibri” small cells, with all in one indoor and outdoor variants as well as an option for CBRS support.         
  • Openness will deliver best performance/cost ratios – repeated many times, openness has become a key pillar of Nokia MN’s messaging and positioning. As a philosophical approach, this positioning is predicated on a new reality where operators want to shift from traditional subscription models to a more on-demand model, where capacity and connectivity demands are elastic. For Nokia MN, openness encompasses many tactical shifts including a major focus on areas like CloudRAN, which has seen Nokia MN partner with a diverse group of cloud players including AWS, Google Cloud and others. Indeed, a senior exec from AWS delivered a keynote that professed to major progress made with Nokia on their “AnyRAN” strategy. Nokia MN’s openness approach is also evident in their product launches being compliant with Open RAN specifications. Beyond CloudRAN, Nokia is also working with a number of partners for CPUs (Nvidia, ARM and Intel), Radios (Fujitsur, Mavenir and others), Container as a Service players (RedHat, Google Cloud and more) and even for hardware (Dell, HPE etc). 
  • Extended leadership in backhaul – one of the lesser reported and analyzed stories about Nokia MN is their leadership in backhaul solutions. Beyond fiber, for Nokia MN, this means microwave where they have been a leader for some time with their Wavence product line. This product line now extends to the E-band with the UBT-mU small form factor product, which can carry an average capacity of 10 Gbps, which is ideal for urban and hotspot deployments. E-band microwave solutions can be really effective for use cases like FWA. While FWA demand is surging, it is tough for operators to run fiber to every base station that is enabled for the service, both for cost and topological reasons.

Energy efficiency has become a core mantra

Another oft-repeated mantra for Nokia MN throughout the sessions was energy efficiency as a core design principle. This message is hardly unique to Nokia but it was telling to see the holistic way in which crucial requirement for mobile operators is being approached within the company. Beyond claims of % savings for new products, there is an inherent recognition that energy efficiency will come from better hardware and software designs, with a healthy dose of AI sprinkled in for iterative learnings and efficiency gains.

  • On the hardware side, Nokia’s ReefShark SoC’s are driving efficiency gains as are in-house RFIC designs for Wavence microwave products.
  • On the software side, lower energy consumption through new features like intelligent switch-off of idle radios, extreme deep sleep and improved use of AI/ML will all make a big dent.   
  • Zero footprint and low-footprint site solutions with liquid cooled baseband technology will help lower cooling system energy consumption by up to 90%.
  • Nokia is also working on implementing AI in all of their digital services offerings to customers, including digital twins for network design and optimization; site infrastructure design, and also for deployment related services like Nokia AI Digital Assistant.

Honorable mentions

We would be remiss not to briefly mention a number of the other initiatives that Nokia is working on. These include a big push on network APIs through their “Network as a Code” platform in partnership with aggregators like Infobip and cloud providers like Google Cloud.  Nokia MN is also a member of the recently created AI-RAN Alliance that is pushing for increased usage of AI in the RAN for driving increases spectral efficiency, for allocating idle RAN resources for AI workloads and also using AI to drive increased efficiencies at the network edge.


Future outlook

There is no immediate easing of the external headwinds that are facing the industry. That said, Nokia MN appears to finally be emerging from its transition period with a refreshed portfolio of products that cater to multiple industry segments and deployment scenarios, while also keeping openness and energy efficiency as core design principles. Nokia MN has a lot riding on their bet that operators want increased flexibility and choice for their networks. While Nokia has doubled down on its strategy and recent investments, a lot will ultimately depend on operator strategic choices – double down on purpose-built networks or opt for optimized, “open” solutions that offer elastic “on-demand” capacity.

Planning is Crucial for the Sustainability of the RAN

Author: Shiv Putcha

A few weeks after Mobile World Congress 2024, the dust is settling on news flows from and prior to the event. Unsurprisingly, there were several major themes from MWC24, the biggest of which was linked to artificial intelligence (AI), its offshoots like GenAI and their relevance to the telecom industry. But despite AI being the biggest buzzword, there were plenty of other themes that were in evidence.

Sustainability was one of the major themes at the show. There is no question that sustainability is a hot topic within the telecom industry but at MWC24, it seemed that sustainability was embedded into overarching messaging, but it was not quite the centerpiece. This was somewhat curious given that overall industry awareness of sustainability concerns are now quite widespread. Or perhaps, and much more likely, sustainability is no longer a buzzword. Rather, the industry has already moved into an execution phase.


5G momentum must be met with increased energy efficiency

5G today has really strong global momentum with both commercial and planned deployments. 5G has become widely deployed around the world and much faster than previous generations of cellular technology.

As of Q2, 2023, GSMA Intelligence is tracking 238 operators in 94 markets have launched mobile 5G. Several more launches are planned for the next few months through mid 2024.

But it’s not all smooth sailing. On the one hand, 5G is scaling rapidly and will hit 25% of total cellular connections by 2025. But on the other hand, there is an inherent paradox in that there is a hard tradeoff with surging data consumption from strong adoption of 4G LTE as well as 5G services. The surge in data traffic will drive energy costs sky high unless something is done to fundamentally change the current paradigm.

This is where sustainability concerns have come to the forefront of consciousness for telecom operators around the world. With revenue pressure at the top line becoming an increasing concern, profitability is increasingly linked to better operating performance and lower expenses. Energy efficiency is the benchmark that most have zeroed in on but energy efficiency for telcos must be approached in a holistic manner. It will not come from one or two, but rather a variety of sources, including new spectral and network efficiencies, sunsetting of 2G/3G networks, and greater use of renewables.


The RAN is lowest hanging fruit to tackle energy efficiency

As we look across the globe, the transition to 5G is well underway. In some places, the second wave of 5G CAPEX has already begun as we look at upgrades to Standalone and eventually 5G Advanced. This has major implications for the RAN, not only with new sites required but also densification to support growing data traffic. The tradeoff naturally is increased energy consumption in the aggregate, even if the per bit rate is lower for 5G. Research from GSMA Intelligence shows energy consumption by the RAN as over 80% of total network consumption. That is a very big “nut to crack”. How do operators go about planning this transition with a view to driving sustainability into the RAN?

Energy consumption in the RAN is being sourced from a number of areas, with the majority, 73%, coming from the traditional grid, while 21% comes from renewables and 6% from diesel. European telecom groups continue to build on their early lead from both an energy efficiency perspective as well as the proportion of energy consumption coming from renewable energy sources. North America comes in second with significant investment in recent years, while Africa and Asia are playing catch up.

GSMA Intelligence tracks industry-level progress on energy efficiency through the Telco Energy Benchmark study. During 2023, GSMA Intelligence built a dataset based on 65 networks and 1.6 billion connections. As there are no single metrics to measure energy efficiency, GSMA Intelligence is using a combination of 4 KPIs. But to highlight just one, our sample shows that operators used an average of 0.15 kWh of energy to transfer 1GB of data across the network.

There are already a number of initiatives being undertaken to improve energy efficiency in the RAN. These include site simplification and physical modernization, spectrum refarming and user migration to more efficient networks, using highly integrated hardware, adoption of advanced cooling systems and now even using AI and other techniques to optimize energy consumption.  

GSMA Intelligence’s Energy Efficency benchmark report can be downloaded here


The right planning tools can go a long way in tackling energy efficiency in the RAN

As mobile operators, whether they are greenfield or brownfield, go about making decisions about their RAN, there are a number of considerations that must be taken into account. The first priority for operators is, of course, coverage. In other words, how to maximize coverage as well as capacity with available resources. But now, the additional layer of complexity that has entered the calculus is how to maximize coverage and capacity with sustainability in mind. For example, for a brownfield operator, if they need to upgrade a site to 5G, or even deploy a new site for 5G altogether, what are the considerations and tradeoffs on energy efficiency that they need to account for.

Similarly, for operators, understanding the RAN’s energy consumption during peak loads and forced sleep modes is crucial. Companies like EDX Wireless offer products like EDX’s SignalPro, where these scenarios can be accurately modeled for any base station model, offering precise metrics on energy consumption and Quality of Service (QoS) for end users. EDX Wireless uses the EARTH framework (Energy Efficiency Evaluation Framework (E3 F)) 3GPP [TR36.814R9] for the quantification of energy savings in wireless networks. This involves assessing the power consumption of the entire system, considering each component of the base station contributing to energy consumption. Additionally, it provides the energy factor for both loaded and unloaded networks. It is also important to model accurately across different base station models and technologies. EDX Wireless’s method incorporates methodologies and metrics that enable comparisons between different base station models, technologies and end user QoS. The throughput to each user can be forecasted when cells are in and out of sleep modes, hence allowing for intelligent optimization decisions.

EDX Wireless also allows for the usage of a digital twin to allow network engineers to simulate the conditions under which a particular site would work, with energy efficiency metrics layered into the analysis. The ability to plan in a simulated environment before field work can go a long way towards improving energy efficiency in the RAN. Similarly, planning tools like EDX’s SignalPro can help them identify which sites that consume the most energy, and then they know where to invest CAPEX for upgrades.

In conclusion, 5G is more energy efficient but this will take time to play out. Sustainability in the network must be viewed holistically. It is important that the RAN harvests data and turns these into actionable insights. To do this, operators need the right tools.

MWC Shanghai – Satellite and NTN Summit

GSMA Intelligence hosted the Satellite and NTN Summit during MWC Shanghai 2024, bringing expert speakers from across the mobile ecosystem to explore:

  • Strategic priorities and the potential of satellite networks integrating with 4G & 5G
  • Revenue opportunities across consumer and B2B/IoT segments
  • The evolving competitive landscape among satellite and HAPS groups
  • Technological advances in satellites, chipsets, and devices
  • Business models for telco-satellite partnerships
  • Regulatory considerations for scaling up

Access the full slides presented by Tim Hatt, Head of Research and Consulting below:

Thank you to our speakers for taking part:

Session Speakers

  • Barbara Pareglio Senior Technical Director, Smart Mobility Lead, GSMA
  • Stephen Douglas Head of Market Strategy, Spirent Communications
  • Jin Zhou VP, Innochip Technology
  • Meng Li Director, Corporate Development APAC, SES
  • James Li Chairman&Co-Founder, Starwin
  • Zhou Jing Director, China Unicom
  • Wei Deng Director of Wireless Communication & Terminal Technology Department, China Mobile

Full recording coming soon.

High/low: a model for future 5G-Advanced networks 

5G-Advanced: underpinning a monetisation imperative

5G take-up continues to grow. Adoption has now reached around 20% globally but is considerably higher in most of the vanguard countries. China (with 45% adoption), South Korea (49%) and the US (57%) are among the most populous countries in this group. The pace of 5G adoption since launch has been the fastest of any mobile technology generation. 4G took twice as long to reach this level, while 3G was around 2.5× slower. The reasons are well established and include wide handset availability with declining price points, expanded network coverage, faster speeds, high levels of competition among operators on airtime prices, and relief from Covid-era macro pressures. 

China is home to a fast developing 5G story and has a growing gravitational pull, given its impact on strategic industries and the content ecosystem in the consumer domain. Translating its 5G adoption rate into absolute connections numbers – 810 million – underscores its sheer size. By 2030, China’s 5G connections base will exceed 1.6 billion, accounting for around a third of the global total despite being home to less than 20% of the global population. 

The imperative for operators is to monetise this connections growth beyond the marginal levels reported to date. Most of the revenue uplift attributable to 5G on the consumer side has so far come from price premiums in return for higher speeds and data allowances. This is fine and justified but ultimately not sustainable, because the price premiums will eventually be competed away. The enterprise segment has more incremental revenue upside but this has not yet materialised beyond marginal levels.

China offers a useful case study. The imminent arrival of 5G-Advanced networks with 3GPP Release 18 (the next phase of 5G) provides an upgrade that increases the ability to monetise several enterprise and consumer applications more than has been possible to date. This includes low-power IoT with RedCap, FWA broadband, and a range of higher bandwidth streaming and entertainment categories that could draw on extended reality (XR). 

How much more do 5G customers lean towards entertainment categories?

Percentage of contract customers who have added, or are interested in adding, a given entertainment subscription to their tariff

Source: GSMA Intelligence

Beijing trial: leading the way

I had the opportunity to speak at Huawei’s 5G Evolution Summit at MWC Barcelona 2024. The discussion focused on monetisation strategies that can form the basis of network transformation upgrades.

An important question for 5G-Advanced is how to balance the goals of high network performance and cost effectiveness. Huawei and China Unicom have undertaken a trial in Beijing to this effect. The trial brings together an approach to balance low and high frequency band spectrum such that coverage and capacity layers are both delivered. To date, China Unicom’s 5G network in Beijing has become robust. However, the fast rising traffic profile and concentration in dense, urban areas mean further upgrades and rearchitecting are necessary to ensure performance. The following network KPIs for China Unicom in Beijing underscore this: 

  • approximately 4,000 sites support 200 MHz spectrum 
  • 5G coverage is at parity with 4G 
  • utilisation can reach over 90% in the busy hour.

The trial set up a network to integrate high-band spectrum with mid-band holdings (3.4–3.6 GHz, 4.8–5.0 GHz). Drive tests of the network indicate peak download rates of 10 Gbps with a continuous (i.e. sustained and uninterrupted) rate of 5 Gbps. The network strategy uses a handover algorithm rather than carrier aggregation to link the spectrum holdings, preserving capacity only when it is needed in real time (such as at a sporting event). This means high-bandwidth use cases (e.g. VR gaming at an e-sports venue, or glasses-free 3D) can be serviced while maintaining coverage across the network and indoors, given that lower band propagates better through walls. Higher uplink speeds were also achieved, which helps with high-definition video streaming and other bandwidth-intensive applications such as VR. 

Outlook

The partnership and trial are a good indication of how 5G-Advanced networks can be set up to balance performance and coverage. This also plays to the demand requirements for 5G networks in serving lower latency use cases: wide area coverage, adaptable for AI, and deterministic. The situation in China is in some ways more pressing than other countries on account of the rapid take-up of 5G in numbers and usage. Data usage per 5G customer will rise from 13 to 54 GB per month by 2030 (or 23% per year), faster than subscriber growth of 11%, implying a higher usage intensity as people use more bandwidth-heavy apps.

China is likely to license millimeter wave spectrum at some point in 2024, though the allocation amounts – which will have an impact on capacity – are not yet known. If the allocation does go ahead, China would be the most prominent country on the 2024 calendar for a millimeter wave release, joining the 50 countries that have already done so. It would also provide regulatory certainty to chipset makers and device OEMs to incorporate high-frequency spectrum in their portfolios, in turn driving scale economies to help reduce handset and other CPE costs. These are all positives to go alongside the product monetisation of operators using this type of 5G network. We would expect to see other operators consider this deployment model for 5G-Advanced where spectrum holdings permit, even if that is at the local or regional level rather than on a national scale. 

Satellite and NTN Summit – Photo Gallery

Photos from the Satellite and NTN Summit at MWC Barcelona 2024.

The full recording and slides can be found here.

Featured speakers:

Tim Hatt, Head Of Research & Consulting, GSMA Intelligence

Ken Peterman, President & CEO, Comtech

Fran Bogle, Chief Revenue Officer, ORBCOMM

Libby Barr, Chief Operating Officer, Avanti

Anirban Chakraborty, CTO, Comtech

Amina Boubendir, Head of Research and Standardisation, Airbus Defence and Space

Tamer Kadous, VP, Terrestrial Networks, Globalstar

Antonio Franchi, Head of 5G/6G NTN Programme Office, European Space Agency

Dave Roscoe, Executive Vice President, Satellite Communications and Products, ORBCOMM

Matt Botwin, Principal, DLA Piper, LLP

Piotr Wesolowski, Senior Manager Space Partnerships, Deutsche Telekom AG

Maxime Flament, Chief Technology Officer, 5G Automotive Association (5GAA)

Bee Hayes-Thakore, VP, Marketing, Kigen

Brett Tarnutzer, Director, Satellite Policy, SpaceX

John Janka, Chief Officer, Global Government Affairs & Regulatory, Viasat

Natalia Vicente, Vice President Public Affairs, GSOA

Marc Rouanne, Executive Vice President & Chief Network Officer, DISH Wireless

Intelligence brief: Entering the edge compute era

Intelligence brief: Entering the edge compute era

Author: Silvia Presello


Edge computing has become something of a buzzword in the telecoms and tech industry. But why is edge computing important, and why are we talking about it now?

A recent study published by GSMA Intelligence and the Automotive Edge Computing Consortium (AECC) suggests advances in wireless technologies and businesses undergoing digital transformation are driving investments in edge computing. This is putting edge computing back in the spotlight. To provide a view of what is happening, GSMA Intelligence surveyed 400 executives across five groups from across the value chain: operators, cloud providers, vendors, systems integrators and car manufacturers.


Why it matters

Edge computing enables computing resources, such as those for storage and networking, to also run at the edge of the network instead of just in centralised public/private clouds. Through edge computing, AI/ML is deployed near the end user, enhancing the functionality of Internet of Things (IoT) and connected devices. Centralised clouds need the edge to unlock the full potential of AI/ML and leverage the vast amount of data generated by the increasing number of IoT connections. By 2030, there will be around 38 billion IoT connections that will need the edge with embedded AI/ML to run automation. Cellular connectivity is crucial for IoT use cases involving mobile assets such as cars, trains and trucks, making edge computing increasingly relevant to the 5G monetisation story.


Investment plans and strategy

The survey  demonstrates that overall sentiment towards edge technology is positive. Some 73% of survey respondents claim they will increase their year-on-year investments in edge computing. The medium increase across the ecosystem compared to the previous 12 months is expected to be 10–15%. This reflects that edge computing is becoming increasingly strategic for enterprise sales success.

Figure 1: A medium investment rise of 10–15%

Source: GSMA Intelligence

Revenue gains realised from deploying edge computing in connected vehicles are forecast to rise considerably over three years, with 15% of car manufacturers expecting to generate an uplift of 16–20%. Rising demand for connected vehicle services such as mobility-as-a-service, HD mapping, V2X, and other security applications is spurring growth in edge computing across the sector.  As well as automotive and transport, edge computing is becoming more widespread in sectors such as consumer electronics, media and smart cities. The growing popularity of the metaverse, remote operations, collaboration, e-games and e-sports is driving adoption of edge computing in consumer electronics.

Figure 2 Top industry verticals driving demand for edge computing

*Consumer electronics includes products such as laptops, tablets,  PCs, XR/VR devices, wearables, drones

Outlook

The survey results suggest the main responsibility for bearing the costs of edge network deployment is placed on operators, reflecting that most of the edge costs are related to infrastructure. However, operator revenue growth is still mostly in the low single digits, and the cost of capital is above net income margins, posing headwinds for investments. No single player can deliver full edge computing network capabilities to enterprises or navigate alone the challenges that come with innovative technology. Partnerships will therefore be a key success factor. A host of partnerships with operators have already come about to this end.

Reports assessing edge computing are now online click here

On-Demand: Earning Trust in an AI Automated Network

Recording from Fierce Wireless’ Network automation week: Earning Trust in an AI Automated Network

Synopsis:
Automation is undoubtedly poised to bring a variety of advantages for CSPs, but one of the biggest concerns amongst decision makers is trust. How do we trust an AI automated network to do what it is meant to do? A 2021 Forrester survey reported that trust was the biggest challenge to AI/ML adoption in telco – how can we trust a system when we are taking away oversight? Nothing takes longer to heal than a damaged reputation, and with so much riding on ensuring a fully autonomous is fit for purpose, CSPs need to be certain that their autonomous networks will not let them down. Therefore, essential questions need to be answered. How can CSPs maintain oversight of autonomous networks? How is success measured? Who is responsible for testing and integration? Join this session to answer the fundamentals questions.

Speakers:

Ildikó Váncsa: Open Infrastructure Foundation

Iren Berk Özalp: Türk Telekom

Shiv Putcha: GSMA Intelligence

Jennifer Yates: AT&T Labs

Host: Oliver Ward: Questex

To watch the session, sign up for a free account here and browse through the sessions available: Fierce Wireless Online Site

What will 5G in Africa look like?

MWC23 demonstrated 5G’s growing maturity, especially in pioneer markets, such as China, South Korea and the US, where the technology has now attained mass market adoption. In these markets, the conversation has shifted from consumer adoption to accelerating 5G standalone deployment and unlocking new features of 5G, including those to come with 5G-Advanced. Meanwhile, a second wave of 5G momentum has now begun, led by Brazil, India and Indonesia. These markets will help take the total number of 5G connections globally to 1.5 billion by the end of this year (GSMA Intelligence).

It is fair to say that Africa was largely missing from much of the discussions around 5G at this year’s event – and for good reason: as of today, only 13 of the 50+ countries in the region have launched commercial 5G services. Additionally, 4G – at less than 25% adoption – still has significant headroom to grow, while only seven countries (Angola, Kenya, Mauritius, Nigeria, South Africa, Tanzania and Zambia) have assigned 5G spectrum to date. In contrast 4G was the dominant technology in other regions at the advent of 5G. Added to these are valid concerns around the cost of 5G deployment and the affordability of devices and services for most users. 

Last year, GSMA Intelligence conducted a survey (the 5G Africa Survey) of key stakeholders, including policymakers, operators and vendors, and enterprises to understand the outlook for 5G in Africa. Insights from the survey, published in the report 5G in Africa: Realising the potential, point to high expectations for 5G to enable digital transformation, boost tech innovation, and help meet the connectivity needs of people and businesses in Africa. Several government (e.g Côte d’Ivoire, Egypt, Kenya and Morocco) have outlined digital transformation plans that could benefit from key 5G. 

This sentiment was echoed by various stakeholders at MWC23, including government ministers and regulators and industry players, such as Arm, Huawei, Orange and Qualcomm, at various forums (Watch my chat with Benjamin Hou, President, Huawei Northern Africa Carrier Business here ). However, the general consensus, as was highlighted in our report, was that Africa’s approach to 5G rollout will be unique and reflect the various industry and macro realities on the ground. 5G rollout, for example, will likely take a phased approach in Africa, with initial focus on urban areas and industrial locations , as opposed to mass population rollout as we’ve seen in advanced markets.

These views begin to paint a picture of what the 5G era in Africa could look like as well as the enabling factors, as we highlight below:

  • 4G will coexist with 5G for the foreseeable future – 4G adoption still growing and with significant unused 4G capacity, operators will focus in the near term will be on increasing 4G uptake. 4G adoption in Africa will continue to rise, reaching 46% in 2030 (GSMA Intelligence). For context, global 4G adoption peaked at 60% in 2022 and is now falling. As such, initial 5G deployments will be on a 4G core and targeted at eMBB (enhanced mobile broadband) connectivity for the consumer market. 
  • FWA is an important 5G use can in Africa – In addition to eMBB, FWA (fixed wireless access) will be an important 5G use case in Africa. FWA particular will benefit from the poor fixed-line infrastructure in Africa and could emerge as the primary form of fixed connectivity to homes and businesses across the region. GSMA Intelligence research shows that around a third of 5G commercial mobile launches in Africa include a 5G FWA offering – a relatively high proportion at this early point in the generational cycle.
  • Device costs need to come down further – 4G adoption was largely held back by device affordability, and the impact of the same on 5G could be significant. 5G devices are usually the biggest cost factor for consumers, given that 5G upgrades are offered at little or no premium in most cases. 5G-ready handsets are now available for as low as $150 in some markets, but this remains prohibitive for most consumers in Africa, especially if they have to pay for the device upfront. That said, the rollout of 5G in large, developing markets with similar income levels to countries in Africa (e.g. India and Indonesia) could further incentivise the mass production of more affordable devices, while financing solutions could also help to offset the impact of prohibitive upfront costs. 
  • Timely access to the right amount of spectrum is essential – the importance of spectrum across different (low, mid, and high) bands cannot ne underestimated.  Here, the message to regulators is clear: make available 100 MHz of contiguous spectrum per operator in prime 5G mid-bands (e.g. 3.5 GHz). Lower bands (below 1 GHz) are also required to provide wide-area capacity and ensure that 5G reaches everyone. Meanwhile, GSMA research shows that as demand increases, a total of around 2 GHz of mid-band spectrum will be required for 5G per country, on average, by 2030. A number of frequency ranges have the potential to help support future mid-band needs, including the 3.5 GHz range (3.3–4.2 GHz),  and 4.8 GHz and 6 GHz bands. Beyond spectrum availability, the cost of spectrum also has a major impact on network deployment and access costs for consumers.
  • Infrastructure sharing is vital for cost-effective deployment – Infrastructure sharing is not new in Africa, but it’s role in the 5G era will be even more significant for keeping costs down and accelerating rollout in the context of 5G’s densification requirements. It is important that regulators recognise this opportunity and offer a reasonable expectation of approval for

voluntary network sharing deals as well as simplify planning procedures and regulations for

site acquisition, colocation and upgrades of base stations. 

In an article I wrote for the African Business magazine in 2020, I argued that when the time is right, Africa would learn from the experiences of the 5G early movers and benefit from proven technologies and the economies of scale in devices and network equipment. That time is now, with various new solutions from vendors (e.g Huawei and Qualcomm) reflecting many years of experience and learnings from advanced markets. The maturity of the 5G ecosystem, as evidenced by cheaper and more widely available devices, and innovative network deployment solutions, bode well for Africa’s 5G outlook. 

Kenechi Okeleke, Director, Regional, Social and Policy Research, GSMA Intelligence 

Can mobile operators capitalise on the emerging fintech opportunity?  

Fintech was clearly a hot topic at MWC23: there were 90 exhibitors in the fintech category, numerous keynotes and side sessions as part of one of the conference’s five themes.

There was even a 4YFN winner. 

Fintech has become more prominent in recent years, partly due to the impact of the Covid-19 (coronavirus) pandemic on digital services. As more consumers take a digital-first approach to many lifestyle services (for example shopping and entertainment), and new services and applications become mainstream (for example the metaverse and Web3), fintech will be an important tool for people and businesses to fulfil transactions in a digital environment.

This reality, unsurprisingly, is attracting innovation and significant amounts of investment into the fintech space. For example, 2021 was a bumper year for fintech companies, with KPMG figures placing total investments at $225 billion. Although investor sentiment fell in 2022, mainly due to the deteriorating global political and macroeconomic environment, the fundamentals of growth including high demand, digital-centric lifestyles and enabling regulations remain strong.

In this context, mobile operators around the world are waking up to the fintech opportunity, as well as the challenge from the growing number of fintech start-ups pouring into the space (it is estimated that there are now more than 26,000 fintech companies around the world). In many ways, the fintech opportunity today mirrors the digital content opportunity a decade ago. As then, the argument now is whether operators should bother to compete with more nimble start-ups. Unlike a decade ago, however, operators no longer have the luxury of strong revenue growth from core services and largely underpenetrated markets. Consequently, the imperative to diversify service offerings is now stronger than ever and fintech represents low-hanging fruit for operators to capitalise on.

Of course, operators are not entirely new players in the fintech ecosystem; several operators in Africa and other developing regions have been offering a variety of mobile financial services (MFS) through mobile money for the better part of the last two decades. The latest GSMA Mobile Money State of the Industry Report shows total transactions value reached $1 trillion in 2021, with Africa accounting for over 70% of that figure. However, a question that often arises, and for which there are different views, is whether mobile money can be competitive with other fintech services, and drive profitability for providers and impact for consumers. 

The GSMA Intelligence team at MWC23 explored this topic extensively in meetings, keynote sessions and other forums with various industry stakeholders. In all conversations, one recurring theme stood out: mobile money is no longer just about providing basic financial services to the underserved, it is now a mainstream financial service in markets where it is offered. 

For example, Chris Meng, Vice President of Huawei’s Northern Africa Carrier Business, talked about the vendor’s one-stop platform, which powers Ethio Telecom’s Telebirr and Safaricom’s M-PESA, and provides flexibility for operators to add new applications and services on a mobile wallet base. Frehiwot Tamru, CEO of Ethio Telecom, disclosed that Telebirr reached 29 million customers in less than two years after launch, with products such as merchant payments and microcredit, and Sitoyo Lopokoiyit, Managing Director, M-Pesa Africa, highlighted his company’s consumer products for 59 million users as well as its solutions for 730,000 businesses and 59,000 developers. (Watch my chat with Chris Meng, Vice President, Huawei Northern Africa Carrier Business here). 

So, what did we learn at MWC23? A lot. Here are a few takeaways: 

  • The MFS landscape is evolving – MFS has been through three phases. The first phase, which started before 2010, was characterised by basic money transfer and cash-in cash-out (CICO) services. Here, mobile money helped to reduce the financial exclusion gap in low- and middle-income countries. The second phase between 2010 and 2020 saw fintech start-ups come up with solutions to integrate MFS into peoples’ lives, enabling digital payments for a wide of range of digital services, such as e-commerce and online gaming. The third phase, which picked up at the start of this decade, is underpinned by the inclusion of credit services into MFS offerings. This has the potential to open up new opportunities in the consumer and SME markets for operators going forward.  
  • Regulation is a key enabler – The success of MFS to date, along with its future growth, is a function of the policy and regulatory environment. MFS has taken root in markets where operators have been allowed to lead the deployment of services, for example Cameroon, Côte d’Ivoire, Egypt, Morocco and (more recently) Ethiopia, while discussions are ongoing in several others, notably Algeria, Libya and Tunisia. Enabling regulations go beyond just permitting operators to play in this space; they facilitate collaborations with other ecosystem players and partners, such as banks, existing fintech players, and various public and private institutions to implement mobile payment and credit solutions. 
  • Diversification and innovation will drive future growth – There is a strong argument that mobile money service diversification and innovation – based on a business model that is agile, adaptable and collaborative– will be critical for success. To this end, the concept of the ‘super app’ – where an operator uses a one-stop app to provide access to multiple services through a single interface to create new financial solutions – is being talked about a lot more, following a number of deployments. For example, M-PESA’s super app enables customers to download ‘mini-apps’ within the app to complete tasks like ticket booking, deliveries, shopping, licence applications, insurance etc with businesses, government agencies, utilities and other firms. 

For operators, especially in developing regions, fintech is a matter of how, not if – considering the growing opportunity and the need to create new revenue streams in an increasingly challenging competitive environment. As I highlighted in my keynote on this topic at the North Africa Operations Transformation Forum (OTF), held at MWC23, critical success factors include having the right solution and building the partnerships with relevant ecosystem players. The number of fintech exhibitors and suppliers at the event, including Evina, Huawei, and MobiFin, to name a few, certainly point to the potential for the mobile industry in the fintech space. 

Kenechi Okeleke, Director, Regional, Social and Policy Research, GSMA Intelligence

Lately in Telecoms: Everything is digital and virtual!

In this special edition of CURATED (the last for 2021), we look at whether The Metaverse is hyped OR has the actual potential to transform the digital space. We also look at how operators are acting swiftly to play a key role in the digital transformation of enterprises. As always, the analysis we bring here is based on the news items covered in our Industry updates.

GSMA Intelligence takes on the metaverse and digital transformation of enterprises

The dusk of 2021 is marking the dawn of a new buzzword in telecoms & tech – The Metaverse. Tech giants are betting big on this upcoming trend and its potential – to the tune of Facebook rebranding itself to Meta..

In this special edition of CURATED (the last for 2021), we look at whether The Metaverse is hyped OR has the actual potential to transform the digital space. We also look at how operators are acting swiftly to play a key role in the digital transformation of enterprises. As always, the analysis we bring here is based on the news items covered in our Industry updates.

Metaverse: What is the buzz all about?

Did you know?

There are more than 30 million results available if you type metaverse into Google.

The recent buzz around the metaverse – driven, partly, by Facebook’s rebrand – helps to explain some of the above numbers. But what exactly is the metaverse? There is no universal definition of the metaverse available and there are multiple versions, from different lenses, floating on the internet. Based on the available definitions, I have attempted to identify the key features, listed below, that encapsulates the meta-universe.

  • Firstly, the metaverse is nothing new but an expansion of the existing applications to create an immersive and real-world alike experience for the user.
  • An existence of life in the digital universe is another key feature.
  • Use of immersive tools to live and experience life in a virtual world.
  • A decentralized universe where people have more control over their things, follow their own rules and have the power to create their own world.
  • Open-ended interfaces and interoperability of tools and assets in different metaverse worlds.

Some major announcements which triggered the recent buzz around the metaverse are listed below. As the concept and technology evolves over time, we will continue to note the developments in our Industry Updates section under the tag “metaverse”.

Nov 2nd: Softbank’s Vision Fund 2 led investor group ploughed USD 93 million in the Sandbox, the metaverse gaming

Nov 2nd: Microsoft announces Mesh for teams, digital experience for your team meetings where you can send your digital twin

October 28th:  Facebook, the parent company, rebrands to Meta to reflect their commitment and investment into the Metaverse

So, what do you think – Is metaverse over-hyped or worth the hype?

The concept of the metaverse is not new. Author Neal Stephenson introduced it as a fictional concept in his 1992 novel, Snow Crash. And hints of the metaverse are already reflected in the existing applications such as Minecraft, Roblox, and Fortnite. Ultimately, of course, it all depends on how you define the term.

To me, it is just a term attributed to the evolution of our existing digital world where we already have a presence in some form. The entry into the internet world marked the beginning of this digital universe journey where we are hitting new milestones with every technical advancement, and the Metaverse is one such milestone envisioned. In 2020, the Covid-19 (coronavirus) pandemic accelerated the digital evolution for many people. It’s no surprise, then, to see adoption of the term “metaverse” move to the fore in 2021.

But everything envisioned and possible does not necessarily shout viability. With the advent of 5G, remote surgery was once envisioned as one of the key use cases in healthcare – it is possible today, but has made its way out from the list of viable use cases due to lack of mass demand and scalability issues. Similarly, The Metaverse today also faces some unique challenges.

  • mobility and the comfort challenge with bulky VR headsets, expected to be used for immersive experiences.
  • interoperability b/w different metaverse worlds for seamless experience is a much bigger challenge.

So, why are the tech giants still betting big on this trend?

Well, this is the FUTURE of the digital universe. And, in the tech world, it can take years (sometimes decades’) of R&D for an innovation/idea to come to life and be embraced as mainstream. Hence, it’s better for these players to get involved at the conception stage itself. As for the telecoms and tech industry, an opportunity waits to be unlocked, as the entire concept of the metaverse rests on the ultra-fast and high bandwidth connectivity requirements and the development of apps and devices toolkits.

And, while all this happens, in the here and now it is worth living and believing the HYPE.

Digital transformation of enterprises: Harnessing the power of 5G, Edge, and Cloud

Did you know?

According to GSMA Intelligence research, the average contribution of B2B services in the total revenues of operators (based on reported data of selected operator groups) reached 30% in 2020, up from 17% in 2017. The stagnating/declining revenues from core (traditional) services makes a case for enterprise revenues to be the future driver of growth, and 5G is expected to unlock a myriad enterprise opportunity for operators. The pandemic caused a leap (by several years) in digital adoption, for both consumers and enterprises, resulting in the growth in demand for enterprise services offered by operators.

Which services are seeing the greatest uptake? The GSMA Intelligence ‘Enterprise in focus’ survey highlights that Security Solutions and Cloud Services experienced the maximum growth in demand. To this end, a range of announcements from operators demonstrates that they are acting swiftly to cater to this increased demand by teaming up with cloud/IT vendors, and creation of dedicated business units for enterprise offerings.

To highlight few such announcements:

Nov 9th: Indosat Ooredoo collaborates with Google Cloud to accelerate digital transformation across enterprises

Nov 5th: Microsoft, Vodafone Business partner for enterprise digital transformation of SMBs across Europe

Nov 4th: Fastweb, AWS partner to accelerate SME digital transformation

Nov 1st: Oracle, Orange collaborates for cloud-led digital transformation in West Africa

Oct 17th: Zain Group launches ZainTech, a dedicated unit to offer enterprise digital solutions

So what?

Even before the pandemic, 5G was touted to drive the digital transformation of enterprises and create new revenue opportunities for operators. The pandemic only accelerated this process. At the same time, new cloud native technologies & solutions in the 5G era and the need for edge solutions in support of enterprise use cases, means that a new vendor ecosystem is emerging beyond the traditional vendors.

One result? Co-opetition. Where cloud/IT vendors act as competitors of operators in offering cloud services and solutions to enterprises, 84% of operators (based on survey sample data) claimed that they are teaming up with these cloud/IT vendors to offer complete digital solutions to enterprises.

The recent announcement from AWS planning to sell its own private 5G network to enterprise customers corroborates the above.

What pose as challenges for operators (lack of internal expertise and resources) in the deployment of cloud native solutions is brought as an area of expertise by the cloud/IT vendors. It is, therefore, natural to expect that these partnerships will only bloom in the days to come. The earlier, the better for all.

After all, 5G is not a one-man show (not just about the traditional vendors), it’s about working together.

Finally, do you know that?

All of the above analysis is based on news curated by our team of analysts, and taken from our Industry Updates feed. Visit our feed today for more of the news shaping the mobile industry of tomorrow. It comes without interference!

By Radhika Gupta, Head of Data Acquisition, GSMA Intelligence