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650 Group Blog

The Party-Crashers of MWC21

6/30/2021

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This week's MWC Barcelona 2021 had several themes; the most important was that several outsiders to the telecom industry were ever-present.  The new entrants – the party-crashers - included Starlink, Microsoft Azure, Amazon Web Services, Google Compute, and NVidia.  These new players are forcing change either through economics, new technology, or new regulatory frameworks, or combinations thereof.  We’ll touch on the importance of these crashers and then circle back to a few other ongoing themes that continue to remain relevant in this article.

Satellite broadband, while not exactly a mobile technology, will catalyze significant changes to the mobile industry.  Low Earth Orbit (LEO) satellite services, evangelized today by SpaceX-owned Starlink, announced plans to spend as much as $30B in building out its constellation over its lifespan. Yet, it will reach users across the globe.  Elon Musk said Starlink is in beta in 12 countries, and it plans to have ½-million users in the next 12 months.  The billionaire highlighted that Starlink’s ability to reach rural populations is unlike that of terrestrial players.  We think the rural reach of LEO broadband is precisely why Starlink will be so important.  Musk’s pitch to the mobile industry was that of a partnership – he said that Starlink is partnering with 5G MNOs to offer satellite backhaul and rural broadband services.  We view satellite broadband, and later 3GPP satellite, as critical components in the telecommunications industry, and therefore we chose to write about satellite first in this article.

All three hyperscalers, Azure, AWS, and GCP, made a splash at MWC21.  As a group, these infrastructure providers have already changed the way telcos operate.  In fact, the hyperscalers’ architectures were the inspiration behind the decade-old telco push for Network Functions Virtualization (NFV).  But, these days, hyperscalers’ operations are more than an inspiration to the telcos.  MNOs are now moving some of their workloads to hyperscaler infrastructures.  The evolution of these workload migrations to hyperscalers is moving in three phases, phase 1, the back-office, then phase 2, telecom core, and last, phase 3, the access layer. In the weeks leading up to MWC21, we’ve seen progress on all three workload migrations, including that on Mobile RAN.  Incoming AWS CEO Adam Selipsky said at MWC that AWS is talking to “virtually every telecom operator.” 

​Some examples of announcements made surrounding the MWC show include:
  • Phase 1: AWS / Verizon various relationships, AWS / Netcracker (NEC) relationship
  • Phase 2: AT&T is moving 5G/4G core to Azure (inside of AT&T facilities)
  • Phase 3: GCP / Ericsson relationship

With Open RAN capabilities come the possibility that MNOs can source various RAN components from multiple vendors.  Rakuten has already technically demonstrated multi-vendor sourcing (Altiostar baseband and Nokia and NEC radios).  In addition to system-level multi-vendor interoperability, in previous years, multiple semiconductor companies had been bolstering their RAN offerings (Marvell, Qualcomm, EdgeQ).  Marvell had previously crashed MWC (MWC19 and MWC20) and is now a RAN supplier to Samsung and Nokia.  For MWC21, we saw yet another entrant to the RAN chip market, NVidia.  NVidia has received pubic endorsements from Ericsson, Fujitsu, Mavenir, and Radisys.  NVidia’s current chip offering is called “AI-on-5G,” and the company’s offering starts in 2021 as an “on a server.” NVidia’s next offering is expected in the 2022-2023 era and will be an “on a card” offering.  Then, after 2024, NVidia will offer its “on a chip” offering.  
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NFV World Congress - Nokia, NEC/netcracker, Google, CenturyTel Highlights

4/25/2018

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Keynotes at the NFV World & Zero-Touch Congress in San Jose, California were very interesting today.  We share our observations and view of the main themes from these interesting presentations by Nokia, NEC/Netcracker, Google, CenturyTel.  The main theme of these presentations, we think, is this:  NFV/SDN is now deeply in the deployment and commercial phase, where compared to 3-4 years ago, it was just a concept.  

Nokia.  The company announced that its Airframe server platform, which is an OCP based design, comes available with either embedded acceleration or pluggable acceleration.  This comment includes its software acceleration.  The company explained that its Reefshark chipset can be equipped on the Airframe server and can perform better than a non-accelerated server:
  • Layer 1 and 2 offloading - 100% better
  • Content acceleration - 30x better
  • Machine Learning / video recognition - 10x better
  • Crypto acceleration

In explaining functions that an Airframe with Reefshark can perform, the company gave a good example: massive MIMO beamforming can be assisted by the machine learning capabilities.  
Picture
Nokia's Henri Tervonen at NFV and Zero Touch World Congress
NEC/Netcracker.  Enrique Gracia presented several uses cases of the NEC/Netcracker customers that related to NFV/SDN.  He explained that 16 customers have deployed one or more of these uses cases.

Full Stack OSS/BSS/MANO.  A customer deployed this system in 12 weeks to launch a VNF.  The system managed both physical and virtual devices.

Expand to a new territory using VNFs from home region.  A customer now delivers services to a customer outside the home territory by deploying the software and service from the network location at the home location.  In this particular case, NEC/Netcracker and its customer do revenue sharing and VNFs include SD-WAN, virtual firewall and others.  The service provider is expected to expand its customer addressable base by 40%, mainly targeting small/medium businesses in this non-home region.  This system uses MANO, OSS, BSS and the marketplace.  The company says in this case, time to revenue is expected to take 50% less time to deploy new VNFs in the future.

uCPE (Universal Customer Premises Equipment) deployment instead of branded hardware.  The company worked with a service provider company to enable uCPE to be deployed as an alternative to Cisco, Juniper and others' gear. 
Picture
Enrique Gracia of NEC/Netcracker at NFV and Zero Touch World Congress
Google Cloud.  Vijoy Pandey, who represented Google Cloud, presented on the topic of using AI/ML to reconfigure its data center system.  The company's cloud data center architecture has been evolving continuously since it was first introduced.  Currently, the company is using its own AI/ML system to learn from current network traffic patterns in order to design its future network architecture.  
Picture
Vijoy Pandey, Google Cloud, presenting at NFV and Zero Touch World Congress

CenturyTel.  The company has deployed Broadcom based Ethernet switches using its own Network OS.  These switches do their own packet forwarding.  Additionally, the company has built its own orchestration system called VICTOR.  It draws upon Ansible, NetCONF, uses the service logic interpreter from ONAP and uses parts of Open Daylight.  The company plans to open source this development and the spokesperson Adam Dunstan said, perhaps jokingly, that this might be called ONAP-lite.
Picture
Adam Dunstan of CenturyTel speaking at NFV and Zero Touch World Congress
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Global Mobile Broadband FOrum update

11/16/2017

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This week, we attended the Global Mobile Broadband Forum, held in London, and found several interesting points we thought we would share.  Much of the focus of the conference was about 5G wireless networks, and since the show was in London, many of the service providers who we met with and listened to were European.  The sponsor of this event was Huawei.
  • 5G is expected to deliver 10 times the bits per second for each dollar spent compared to LTE.  This is according to Johan Wibergh, CTO of Vodafone. 
  • 2 year payback on microcells (small cells).  Telus EVP Eros Spadotto explained that the Canadian operator installed small cells in locations where 10% of traffic was occurring, and shortly after they were installed, these began carrying 30% of traffic.  Telus believes it met untapped demand.  The company views its strategy going forward to be installing more small cells and no more macro sites.
  • The 5G timeline appears to be for end of 2018 Fixed Wireless deployments, 2019 mobile trials and 2020 commercial deployment.  We consider the following in assessing this timeline: 
    • According to Huawei, the Chinese government is pressuring China Mobile to be first to deploy 5G Mobile.  Additionally, Huawei's work with radio chip companies leads it to believe that the 5G capable chips that enable smartphones will not be available in early 2018, and its assessment it will take a year to make 5G smartphones once the chips are available, so 2019 is the earliest smarphones can be available.  Huawei says it expects to deliver its own 5G CPE hardware for fixed mobile by later 2018.
    • BT Group CEO Gavin Patterson expects to have 5G commerical in 2020 
    • Deutsche Telecom CTO Dr. Bruno Jacobfeurborn expect 5G in 2020
    • Orange SVP Radio Arnaud Vamparys expects 5G commerical launch in mid 2020
    • Telefonica CTO, CIO Enrique Blanco expects 5G not before 2020
    • Softbank VP Mobil Networks Makoto Noda expects 5G in 2020 before the Olympic Games
    • NTT DoCoMo CTO Hiroshi Nakomura expects 5G to be commerically ready in early 2020.
  • Huawei said millimeter wave 5G won't be used for outdoor mobile, only potentially indoor and fixed wireless.  28 Ghz and similar frequencies are not suited for weather and obstacles, according to the company.
  • Huawei, like others large vendors, expects cellular baseband processing for the lower layers (PHY and MAC) will remain a specialized hardware function.  However, higher layer functions such as cell selection may end up in virtualized systems running CPUs.  We heard similar viewpoints from baseband processor company, Caviuum, at the MWC Americas show a couple months earlier.
  • Tower sharing is a major trend for the future.  All things being equal, as tower infrastructure gets shared by multiple operators, this reduces capital spending.  We expect tower sharing to be a major trend, which will put pressure on capex for many years to come.
  • There are two camps in 5G, largely surrounding spectrum and major vendors.  The first camp are Western vendors (Nokia and Ericsson) and the US operators, who seem to be embracing relatively low frequencies for 5G as well as millimeter wave, and then there is the 3.5 Ghz frequency camp, which has suporters in China, Europe and major vendor, Huawei.  We realize this may be an oversimplification of the industry dynamics, but there's a case to be made that China + Europe may end up with a supply chain somewhat unique from the US-centric chain.
  • IoT is a major trend, and from what we heard from most operators is it'll be running on LTE for a long time, despite how 5G is expected to be a big IoT capable network.  
  • 5G business case still not there yet.  Most European operators are saying they haven't seen a compelling business case to deploy 5G yet (BT, DT, Orange) and Telefonic said it'll deploy 5G when it needs to competitively.
  • Fiber good.  Microwave not mentioned.  Every European carrier that we met or who spoke with (plus Telus in Canada) expects to deploy fiber to cell sites and made no mention of microwave.
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GENBAND perspectives 2017 conference

7/18/2017

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The GENBAND Perspectives 2017 conference in Los Angeles did a good job of highlighting the relatively smaller division at GENBAND - Kandy.  Additionally, the company highlighted its advances towards an NFV World, its participation in so-called "Network Evolution" (upgrading old PSTN and VoIP systems to new VoIP and IMS systems).
​
Kandy.  I asked CEO David Walsh to compare its business to publicly traded Twilio.  He highlighted some differences between the two:
  • GENBAND/Kandy owns its own intellectual property
  • GENBAND/Kandy has a different target customer - it is going after large service providers and enterprises; his viewpoint is that Twilio is going after the 'long tail' of the market like small websites and such.   (He did concede that Twilio's relationship with Uber is a significant one).
  • GENBAND/Kandy's go to market approach is different; it is focusing on SPs

NFV.  The company highlighted its VNF Manager, and we understand that it can perform some aspects of orchestration when operating specifically on GENBAND VNFs.  Additionally, the company and its partner Wind River (Intel) explained that using WIND ABS (its software virtual switch) and the DPDK capability, for many VNFs, can see as much as a 40x improvement in performance compared to running in a virtualized environment not using these two technologies.
  
Network Modernization.  About half of GENBAND revenues last year were related to services; and a meaningful percentage of total revenues are associated with network modernization.  Several customers made presentations discussing their experience in moving to new VoIP systems, replacing PSTN and older VoIP systems.  We learned a few interesting things relating to this modernization:
  • British Telecom explained that voice minutes of use have been down 10% Y/Y ever since iPhone introduced (it wasn't clear if BT meant BT's results or those of the industry; we view this 10% figure to be too great on an industrywide basis, but directionally, it is correct).  By 2026, the company expects 100% cutover to VoIP.  By then, voice will get embedded into apps and / or is on mobile.
  • During the main presentations, we learned that there were 25M lines of Nortel gear in the installed base (PBX and Switches)



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MWC 2017 ericsson, T-mobile usa pitch 5G

2/27/2017

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At the Ericsson Media and Analyst Briefing today, Ericsson's new CEO Borje Ekholm made his first MWC presentation, and then ceded the stage to well-known T-Mobile USA (TMUS) Chief Technology Officer, Neville Ray.  We learned several things that were interesting: T-Mobile's plans for 5G rollout and 2G/3G shutdown, and Ericsson's high-level view on its strengths as 5G rolls out.

Neville Ray's comments conveyed a pragmatic and agile service provider's views:
  • 2/3rds of all voice minutes are now on Voice over LTE (VoLTE).  Ray challenged anyone in the audience to find another telecom service provider with a greater percentage of minutes on VoLTE.
  • 93% of all wireless data is transmitted on LTE
  • Plans to shut down 2G and/or 3G when 5G rolls out, elaborating that the company has decomissioned the 'lion's share' of 2G spectrum utilization.  However, Ray says it has found significant customer interest in its 2G (GSM) network for connecting to Internet of Things (IoT) devices fitted with GSM modules.  In fact, there is a debate at TMUS as to whether to shut down the 3G network before the 2G network.  TMUS claims it has taken share from AT&T because its competitor shut down its 2G network and IoT customers in the US market have signed up with TMUS.
  • The company echoed views it has shared with the media in recent months - that it isn't so committed to virtualizing its network at this point.  The CTO explained that it has a sufficiently modern network core that it isn't necessary to upgrade to a Network Functions Virtualization (NFV) infrastructure - at least until it rolls out 5G - and he put the conversion-to-NFV timeframe at 3 to 4 years.
  • TMUS is not thrilled with the prospects for 5G fixed wireless, the kind that replaces wired broadband.  He said that if this is all 5G does for the industry, we may as well all go home.
  • The company has deployed only 1,000 small cells to date.  It plans as many as 5,000 to 6,000 by the end of 2017.  Part of this rollout is using unlicensed spectrum, and it will roll out LTE-U and LAA.

Ericsson CEO Borje Ekholm positioned Ericsson's view on 5G:
  • 5G will be based on the cloud, and potentially we could see entire 5G networks running entirely on the cloud
  • Ericsson is well positioned in 5G due to its exposure to virtualization, security and its strong position in OSS/BSS.


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