The big ideas unveiled at the conference were twofold. First, Huawei is promoting worldwide open standards as a counter to the likelihood that if it gets cut off from US-influenced technology, it may have to create its own, non-standard technology. Second, the company is promoting “F5G,” which is “fixed 5G,” or a global standard for Passive Optical Network (PON) technology that operates at as high as 50 Gbps and can be used for fixed broadband, optical LAN (Campus Networks), cellular backhaul/fronthaul, and even optical Access uses. The company also discussed evolutions or themes discussed at previous events like HAS2019, such as mmWave, FDD+TDD integration, Control User Plane Separation (CUPS), and more generally, 5G. Much to our surprise, the opening keynotes differed significantly from the previous year’s themes in that there was no discussion of the advancements the company was making in developing in-house semiconductors and optical subsystems.
First of all, the company’s keynote, presented by Rotating Chairman, Guo Ping, was focused on Huawei’s views towards the US efforts to thwart Huawei. The Chairman complained about the year-ago Entity List actions, and then more about this week’s escalation of prohibitions against Huawei. Huawei expects these US actions will negatively impact Huawei in the future. It said it is ramping up R&D and is focusing on open standards. It says US’s efforts will hurt US interests. In the past year, Huawei says it has redesigned over 1,000 circuit boards and that it grew R&D 30% last year. Huawei’s supply chain is not “closed off, but open than ever,” and it “will continue to diversify” its base of suppliers. As a result of US restrictions, the company fell $12B short of its plan in 2019. Huawei’s view is that it simply hopes to “survive” in 2020. One key message from the keynote was that Huawei does not want to see a world with two standards and two supply chains for the communications industry.
The company’s big news, in our view, was that it is advocating for F5G, which is a variant on PON technology that could be used in nearly all parts of networks, from indoor enterprise, to residential and business last mile, to cellular backhaul/fronthaul, and so on. The vision, which was shared by co-sponsor, ETSI, a standards body in the telecom marketplace. We think Huawei’s goal of creating a single technology platform that can be used in various markets where today multiple standards exist could be a good one. For instance, in campus LAN environments, one could certainly argue that copper-based Ethernet has run its course (our forecasts are for declining revenue), and in the “last mile,” 1G-class PON and its currently shipping successor, 10G PON will need to be replaced by something. F5G, which would operate at 10 Gbps and 50 Gbps speeds, differs from another consortium’s approach to a 10G PON successor, which operates at 25G. So, on the one hand, Huawei is entering the market with a big idea – to put the same kind of fiber system “everywhere” (to the home, in the business, to the cellular towers, for instance) – at a time when many of these markets are currently, or soon will be, undergoing a transition, is a good idea. On the other hand, there are already other standards bodies working to create accepted approaches for “to the home” fiber at 25 Gbps, for “in the business” at 2.5/5 Gbps, 10 Gbps, 25 Gbps and 100 Gbps (some copper, some fiber), and “to the towers” at 25 Gbps, 50 Gbps and 100 Gbps. If Huawei gets it way, and F5G succeeds to become a standards, while at the same time the other standards continue to progress as they are today, then we’ll end up with two standards, the Huawei/ETSI approach, and the other approaches used by BBF, IEEE, etc. This is what Huawei said it is trying to avoid in the keynote.
We enjoyed Huawei’s perspectives about its experience in the Chinese mobile and fixed market, where we see increasingly Chinese vendors are serving an increasing portion of capital equipment needs, while at the same time, it was interesting to hear about how the company is taking its experiences to other markets like Europe, Middle East, Asia and Latin America. Several topics it discussed that were important, in our view, were the importance of mmWave, FDD+TDD integration, and CUPS. To review each, we thought it was interesting that Huawei continues to view that the mmWave frequency as being limited to a US-only 5G market implementation; it views the C-band (which is mid-band) as the main spectrum where 5G will be deployed around the world, and it thinks this is sufficient to achieve 5G’s goals. Next, the company spent ample time discussing its RAN technology that allows both TDD and FDD to operate simultaneously, explaining that FDD is best suited for lower frequencies and allows for superior uplink capabilities, while TDD is best for mid-band and is well-suited for MU-MIMO, high capacity throughput radios. The company also shared that its CUPS technology has been adopted by 60 customers, which represents significant progress.
We are eager to see the standards “battle” resolved, whether that means Huawei works closely with existing standards bodies, or whether other players worldwide, get on board with F5G, so that the communications industry will benefit from volume shipments and consumers may benefit with lower prices and new technology getting deployed sooner.
Microsoft Intends to Become The Alternative to Telecom Infrastructure with the Metaswitch Acquisition
Microsoft announced that it will acquire Metaswitch, a telecom core software company with deep expertise in IMS Core, automation, containers and cloud-native telecom systems. The acquisition will complement Microsoft's previously-announced acquisition (April 2020) of packet core and IoT software specialist, Affirmed Networks. Microsoft is positioning itself to become a viable alternative to in-house-built telecommunications core networks. The company says that by running core functions on Azure, operators will be able deliver services to customers at lower capital and operating costs.
The company said it plans to continue to engage with existing suppliers and network equipment partners to share roadmaps and explore expanded opportunities to work together, including in technologies such as radio, 5G Core, orchestration and OSS/BSS. Historically, Metaswitch has worked collaboratively with many companies that offer such software and hardware, so we think Microsoft is saying that this constructive relationship may continue. But, we wonder, could it be that Microsoft intends to further bolster its capabilities to potentially include radio and OSS/BSS after successfully working with these kinds of companies for a period of time.
It is clear that Microsoft is interested in serving the communications needs of customers. It recently announced it will re-sell CBRS managed services from Federated Wireless, for instance. Without question, collaboration services such as Teams have been very popular, and quite different from the types of services that have traditionally been offered by telecom operators. To complement its own services, Verizon acquired a Teams competitor called BlueJeans Networks; however there are many opportunities for Microsoft to partner with other telcos. It is deals like the AT&T / Microsoft Edge services announcement last summer that get us thinking that Microsoft has very big plans for collaborative working relationships with the telecom industry, extending its own offerings to telecom customers.
By gobbling up software companies like Metaswitch and Affirmed, and offering these technologies both as software-at-telco (premises-based) or as cloud-based software (Cloud/SaaS), you can argue Microsoft will be an ideal telco partner, offering capital efficient choice, with the two added kickers: a- services may be deployed more rapidly if cloud-delivered services are chosen, and b-that Microsoft services (Microsoft365, AI, Teams, Azure and so much more) can be easily integrated into a telco's offerings.
112 Gbps is one of the most important building blocks for Ethernet Switching, and networking in general, for this decade and today Innovium announced a 25.6 Tbps ASIC based on the technology.
650 Group has been forecasting 112 Gbps in our reports for over three years and are excited to see the market getting ready for shipments in 2021.
We expect 25.6 Tbps ASICs to manifest as 32-port 1RU 800 Gbps platforms, as well as a higher density of 400 Gbps and 100/200 Gbps platforms. 112 Gbps is also an important technology for Data Center Interconnect (DCI) as more tiers in the networking are being added at many hyperscalers will utilize this technology to connect buildings and locations as metro spines become popular and widespread.
While 400 Gbps optics have been in short supply for over one year, we are more optimistic about 800 Gbps as the technology leap to get there in a pluggable is more manageable. At the same time, the industry can use gearboxes and retimers to use older (generation 1) 400 Gbps optics. With the continued interest from Cloud providers to use Fixed CLOS racks, the industry will also benefit from these higher-speed ASICs with copper connectivity. Not 100% dependent and gated on optics availability is an important aspect to 800 Gbps in the early quarters of shipments.
With each 25.6 Tbps switch replacing at least six 12.8 Tbps (dependent on over subscription), the market will adopt and move rapidly towards 25.6 Tbps ASICs. Besides DCI and the increased bandwidth mentioned earlier, AI/ML workloads will be moving from nascent to mainstream in 2021, which will provide additional market demand for the increased bandwidth.
Today's big news from the FCC is that it will open up 6 GHz to Wi-Fi and other unlicensed uses. The FCC authorizes "1,200 megahertz of spectrum in the 6 GHz band (5.925–7.125 GHz) available for unlicensed use," and further explains that it authorizes "standard-power devices in 850 megahertz in the 6 GHz band. An automated frequency coordination system will prevent standard power access points from operating where they could cause interference to incumbent services." We see that this vote is very beneficial to Wi-Fi chip and systems companies that serve both consumer and enterprise markets. We also expect that outdoor systems that take advantage of this new spectrum may benefit wireless ISPs (WISPs) and their equipment suppliers. And, also, the FCC's statement that an automated frequency coordination (AFC) system will be used to prevent interference from existing microwave transmission systems. With that background, we have compiled a list of companies that will benefit from the FCC's vote.
WLAN Semiconductor companies Broadcom, Qualcomm, ON Semi, Celeno, and Intel. In our research of the WLAN Infrastructure semiconductor market, these are the vendors we expect to sell Wi-Fi radio chips to devices such as Access Points, Broadband Customer Premises Equipment (CPE) with WLAN, and Consumer Routers. A new class of Wi-Fi that takes advantage of 6 GHz is now called Wi-Fi 6E. Broadcom and Qualcomm have already made statements about Wi-Fi 6E in the past month or two, and others somewhat more recently. Historically, Broadcom and Qualcomm have enjoyed significant market shares of the enterprise WLAN Access Point market, while players in the consumer AP/router/CPE have included a wider list of players including Broadcom, Qualcomm, ON Semi (formerly Quantenna), Celeno, Intel, Realtek, Mediatek and others.
Enterprise WLAN companies Cisco, HPE Aruba, Commscope, Extreme Networks and Juniper. While each of these companies has launched Wi-Fi 6 products over the past couple of years that operate in 2.4 GHz and 5 GHz, we expect this group of companies to release Wi-Fi 6E products that connect over 6 GHz over the next year. We expect initially that 6E enterprise products will sit at the high end of product portfolios, selling at higher prices than 5 GHz and lower products. The FCC commented in today's press release that "The notice also seeks comment on increasing the power at which low-power indoor access points may operate," which means that there is still some work to do in figuring out whether these Wi-Fi 6E devices can operate at powers levels more common in enterprises without needing to connect to an AFC. We are sure there is more to come on this topic.
Consumer WLAN Infrastructure companies NETGEAR, Commscope, Technicolor, Amazon and Google. We expect NETGEAR to be an aggressive player in Wi-Fi 6E, just as it released super high-end Wi-Fi 6 products in its Nighthawk product line. We expect Broadband CPE vendors such as Commscope (through its Arris brand), Technicolor and others to benefit as they seek to capitalize on the new spectrum, which should allow the delivery of Wi-Fi at higher speeds and to more devices in the home. We wouldn't be surprised to see consumer mesh vendors such as Amazon (through its eero acquisition) and Google to offer Wi-Fi 6E products, but these probably come a bit later than traditional router and Broadband CPE devices.
Wireless ISPs such as Etheric Networks and Common Networks (both located near the 650 area code that we used to name our company, 650 Group) will likely benefit as they will be able to offer new WISP services over the new 6 GHz spectrum. Since the spectrum is new, essentially unused and there's lots of it, we expect that these, and other WISPs in the US market, can benefit by expanding beyond the current unlicensed spectrums commonly used today, such as 60 GHz, 5 GHz, 2.4 GHz and 900 MHz spectrums. We think it might take a year or two before the WISPs can capitalize on these spectrums, but we see it as a windfall.
WISP suppliers such as Ubiquiti Networks, Cambium Networks, Airspan, and others will be likely beneficiaries. These suppliers sell to WISPs and other operators to enable "last mile" services that compete with fixed-line broadband services such as cable modem, DSL and PON. As we alluded to above, the 5 GHz spectrum is quite crowded, and thus, as 6 GHz becomes available for outdoor use, we expect that a new class of equipment will take advantage of this ample spectrum to deliver broadband to a more significant number of business and consumers. The FCC has a "goal of making broadband connectivity available to all Americans, especially those in rural and underserved areas," according to its 6 GHz press release today, and we see WISPs as one of the main constituents of serving this goal.
Mobile network operators AT&T, Verizon, T-Mobile, and US Cellular. Similar to WISPs, we expect that mobile operators will eventually leverage 6 GHz to deliver Fixed Wireless Access (FWA) services (and potentially mobile services) to consumers and businesses. In suburban and rural areas, we have already seen some operators, notably Verizon, deploy FWA in licensed mmWave spectrum (in 20 GHz and 40 GHz ranges) - we have seen operators pare back on plans to deliver services, though they haven't stopped deployments or anything. But, we see 6 GHz could puff some new life into FWA plans because this is a lot of new frequency and since it is lower frequency than mmWave, does not suffer as much from immovable obstacles such as tree leaves, windows and precipitation. Additionally, we see mobile services could benefit as well, as we have already seen operators such as AT&T leverage 5 GHz unlicensed spectrum in delivering mobile service on its small cells in locations such as New York City, so we would expect mobile operators to eventually take advantage of 6 GHz in a similar fashion. But, incumbent services (point to point microwave systems) are more likely to interfere with mobile operators' plans in urban areas, where paradoxically, there is more need for this extra bandwidth, so we think operators will take some time to sort this interference out.
AFC services operators such as Federated Wireless. Given that the FCC announced a specific need for AFC services in its media blitz today (see above), we point out that Federated Wireless has already announced an AFC service. Just as Federated has competition in its CBRS SAS service from players such as Commscope, we would not be surprised to see new competition in AFC services.
Microsoft announced that it had acquired privately-held Affirmed Networks today. This isn't the first software/services based telecom acquisition it has made, with the 2011 acquisition of Skype being the most prominent one. Other competitors to Microsoft have made forays into the telecom market, including Facebook's 2014 purchase of WhatsApp, Oracle's 2013 acquisitions of Tekelec and Acme Packet.
Microsoft's acquisition can be viewed as both collaborative with mobile network operators or competitive with them, and it certain pits the giant against telecom equipment vendors like Ericsson, Nokia and Huawei. Let me explain.
Federated Wireless, a pioneer in the CBRS SAS market, just announced its plans for an AFC for the upcoming 6 GHz spectrum in the US market. The company expects that 6 GHz products and its AFC to be commercially available sometime in 2021, and potentially as early as late 2020. For those who are unfamiliar with what is behind this announcement, let us explain. Citizens Band Radio Service (CBRS) is a 150 Mhz wide broadcast band from 3.55 GHz to 3.7 Ghz in the US market, and Federated Wireless is one of main companies offering SAS, which enables multiple spectrum-users to share the 3.5 GHz spectrum. So, now that the US FCC is planning to open up the 6 GHz spectrum as unlicensed, allowing Wi-Fi 6E and 4G/5G cellular (or other systems) to operate, there’s an emerging need to coordinate what exact frequency bands in the 6 GHz range should be allowed on a per device basis; this service is called an AFC (automated frequency coordinator).
We think the timing for Federated Wireless’ AFC announcement is good. There is considerable excitement about Wi-Fi 6E (the version of Wi-Fi 6 that will operate in this new 6 GHz spectrum). Consider that two significant Wi-Fi infrastructure chip companies, Broadcom (on January 7, 2020), Qualcomm (February 25, 2020), announced products that operator in this 6 GHz spectrum.
There is some controversy as to whether the AFC service will be needed for some or all of the working device types, installation locations (indoor or outdoor) and device power output levels. There are two camps, which can be summarized as “what the Wi-Fi companies want,” and “what the incumbents want.” The Wi-Fi companies have repeatedly explained that requiring an AFC for very-low power or low-power 6 GHz use in the US will slow down the market (VK Jones, VP Technology of Qualcomm Atheros said so last August, 2019, for instance). However, Federated Wireless has studied multiple major cities in the US and found that there are some cases where, in populous areas, the new 6 GHz devices could interfere with incumbent services like microwave links of mobile operators, public safety, utilities and transportation. We understand the FCC is reviewing this information and may communicate with the public as soon as April 2020. We expect the various parties (Wi-Fi players, incumbents, FCC, AFC players) to make some concessions in the coming months.
Today, HPE Aruba announced its Aruba Air Pass cloud service that allows for a hand-off between cellular and Wi-Fi networks. The service is enabled by Passpoint, which is a standard created by the Wi-Fi Alliance. The idea is that a mobile operator customer can go into a building with Wi-Fi coverage and, without having to "log on" to the Wi-Fi, the user's phone will automatically connect. Using Air Pass means that mobile operators won't need to build a cellular infrastructure in these buildings for customers to continue with their phone calls.
For mobile customers to see the benefit of seamless roaming from the Air Pass service, mobile operators will need to engage in a relationship with the property owners of the building. While this seems like a lot of work, connecting to Air Pass will be far easier than it would be for a property owner to install a cellular network inside the building. Examples of in-building cellular that can operate either on licensed, shared or unlicensed spectrum is a Distributed Antenna Systems (DAS) system or licensed small cells. Building owners or operators have to build new, in-building cellular if they want cellular coverage. Managed Service Providers, such as Federated Wireless, have begun selling a service to property owners where they will manage the cellular infrastructure for the owner.
Aruba has some competition for its service to allow Wi-Fi sharing to mobile operator customers. In February 2020, Cisco announced its Unified Domain Center as a means of sharing Wi-Fi coverage with mobile operators, as well, and claimed that it is at the proof of concept stage with operators. Also, Swedish software and services company, Aptilo, has created systems that allow SIM-based device users to roam onto Wi-Fi, as well. We applaud the efforts of Aruba, Cisco, Aptilo and many others who have built systems to allow device users to roam between cellular and Wi-Fi networks.
There has been a lot of excitement by mobile operators and cellular equipment suppliers about the 5G opportunity to expand to enterprises. In November 2019, for instance, Nokia discussed how enterprises are adopting its Private LTE systems to allow cellular coverage at customers such as utilities and shipping ports. We have been cautious on the idea that mobile operators will get lots of new revenue from providing cellular coverage to the enterprise; a year ago, we laid out our thoughts on the 5G Enterprise hype at the MWC19 show.
The implications of the emergence of services like Air Pass and the capabilities of Unified Domain Center is that Enterprise Wi-Fi coverage will be leveraged in the 5G era far more than all the hype about "5G" wiping out the need for Wi-Fi. However, we also feel that cellular systems will see growing popularity in certain enterprise verticals, as was evident at the MWC-Americas 2019 show.
Cloud providers are rapidly evolving their network topology architectures as they move towards 400 Gbps and beyond. One trend resonating across the industry is the move towards CLOS switch rack or Distributed Disaggregated Chassis (DDC) topologies and the use of copper above the server access layer. However, the distances DAC can serve continue to shrink with each increase in speed, and fiber remains costly.
DDC will ramp in 2H20. Both Service Provider and Data Center networks will take advantage of the power density provided by 25.6Tbps switch silicon to deploy dense in-rack CLOS architectures. Active Electrical Cables (AEC) such as HiWire™ AEC are a key enabling technology for DDC architectures.
In many ways, DDC CLOS architectures use copper cables as a replacement for the traditional modular chassis backplane. As we look towards this architecture change, we see three unique form factors of cable emerging to replace DAC and AOC.
Active Optical Cable (AOC) Replacement
Products like Credo HiWire™ SPAN AEC will begin to replace AOC. A fully populated rack of AOC can often have the same power as the switches themselves, and the current supply chain does not have consistent high-volume availability. AOC also has a high relative cost of a fiber solution. This type of copper solution will have longer distances and will potentially move into use cases around the middle of row connectivity.
Gear Shifting Splitter Cables
Products like Credo HiWire™ SHIFT AEC will gearbox between SERDES speeds. While today, the most common option is splitting a 56 Gbps SERDES into two 25 Gbps ports, we expect this type of cable to become more popular when 112 Gbps SERDES begin to ship. For example, a purpose-built 48-port 100 Gbps switch with 112 Gbps SERDES could become multipurpose and split down to 25/50 Gbps ports for server access or switch-to-switch connectivity.
Low Cost, Short-Reach Cables
Products like Credo HiWire™ CLOS AEC will begin to enter the market for short distances within the rack. Today DAC comes in one type of solution; however, with DDCs becoming more popular, a new type of purpose-built and short-reach cable should emerge to connect switches within a rack. By purpose-building for this use case, the cable should be cheaper, thinner and lower power, which is attractive when trying to pack so many cables into a single rack.
We expect that newer copper technologies will also benefit from improved process geometries over the next 12-18 months. Moving from 28nm to 12nm and below will help drive down cost in the interconnect part of the market in a very similar way of the moving from 28nm to 16nm to 7nm had huge cost savings in the switch ASIC itself.
By Alan Weckel, Founder and Technology Analyst at 650 Group.
Qualcomm made many wireless-related announcements today from its San Diego, CA headquarters, in place of making a presentation at #MWC20 in Barcelona. Top announcements included its FSM100xx 5G small cell chips customer announcements, RF-chip availability, Wi-Fi 6E demonstrations, and 5G smartphone customer announcements.
FSM100xx 5G RAN endorsements. Qualcomm announced its FSM 5G RAN platform in May 2018, targeting small cells and remote radio heads and enabling bothmmWave and sub-6 GHz spectrum using 10 nm process geometry. The company listed multiple vendors and operators in its press announcement relating to FMS100xx chips. Each of the vendors shared some interesting statistics, the most important of which we share here:
Qualcomm ultraSAW Filter. Expect availability in 2H20. Hit parity in performance in 2019 and now claims that its ultraSAW Filter will exceed performance of competitors, especially in high-bands.
Wi-Fi 6E. Qualcomm demonstrated 6 GHz operation between its Networking Pro Series (Wi-Fi 6 chips for Wi-Fi infrastructure like access points and routers). Qualcomm was not specific about the timetable for delivery of 6 GHz systems, but the company hinted that the 6 GHz demonstration “underscores Qualcomm’s readiness to extend its successful Wi-Fi 6 portfolio into the 6 GHz band for a transformative Wi-Fi 6E performance, pending regulatory approval.” The company expects that mobile devices using its Snapdragon 865 Mobile chips (intended for user devices like smartphones) can operate more than 3 Gbps when using the new 6 GHz spectrum, or 1.8 Gbps when using existing 2.4 GHz and 5 GHz available today. Qualcomm said its Networking Pro Series (Wi-Fi 6 chips) have been “deployed in more than 200 designs shipping or in development.”
Qualcomm Snapdragon 865 Mobile Platform. The company announced that its chip system for mobile phones that features its second-generation 5G Modem-RF system, the Snapdragon X55, has been “announced or are in development” in over 70 designs, including those from top vendors such as OPPO, Samsung, Xiaomi and ZTE.
Additionally, the company made VR devices and Personal Computer (PC) announcements including partners such as Facebook (VR) and Microsoft (PC).
Cisco’s many MWC announcements include a system to unify WiFi, LTE, CBRS, 5G called Unified Domain Center
We review the new announcements Cisco made public for the now-cancelled MWC20 show, and they are: BNG on unified control plane, Unified Domain Center-to-DNA Center interoperation, IoT Control Center, SP Services Edge (CDN), new Open RAN partners, NCS 540 router with CPRI support, and Crosswork automation platform. Since MWC is a show primarily focused on mobile and wireless, we think the two announcements that are most “wireless” in nature were: (a) Unified Domain Center announcement, which will unify management of WiFi to cellular operator LTE is interesting and (b) the partnerships Cisco announced with Open RAN vendors like Parallel Wireless, NEC and World Wide Technology.
Summary of announcements by Cisco:
Unified Domain Center
IOT Control Center
SP Services Edge
Converged SDN Transport “New Engines”
Automated Network Operations
Trusted path routing