AWS Becomes a Private 5G System Integrator

Amazon Web Services has launched its AWS Private 5G managed service. 

“With just a few clicks in the AWS console, customers specify where they want to build a mobile network and the network capacity needed for their devices,” says AWS. “AWS then delivers and maintains the small cell radio units, servers, 5G core and radio access network (RAN) software, and subscriber identity modules (SIM cards) required to set up a private 5G network and connect devices.”

“AWS Private 5G automates the setup and deployment of the network and scales capacity on demand to support additional devices and increased network traffic,” says AWS. “There are no upfront fees or per-device costs with AWS Private 5G, and customers pay only for the network capacity and throughput they request.”

AWS Private 5G appears to run by default on unlicensed or shared spectrum in the Citizens Broadband Radio Service bands in the United States, but also can use licensed CBRS spectrum supplied by a mobile service provider.

AWS Launches its Own Private 5G Service

5G Will Account for 49% of All Mobile Subscriptions by 2027

5G will account for 49 percent of all mobile subscriptions by 2027, Ericsson now predicts. Subscriptions to 4G services are expected to peak in 2021 at 4.7 billion accounts, then decline to around 3.3 billion by the end of 2027 as subscribers migrate to 5G, Ericsson predicts. 

source: Ericsson 

Though 5G will be the mainstay of mobile accounts in many regions, including North America, Western Europe, the Gulf Cooperation Council region and  Northeast Asia, adoption will still be limited in SubSaharan Africa, the Middle East and North Africa.  

Adoption will be significant in India, Central and Eastern Europe, Latin America and Southeast Asia. 

 

source: Ericsson

5G Will Represent 77% of Mobile Service Revenues in 2026, Juniper Research Predicts

5G will account for 77 percent of mobile service provider revenues in 2026, Juniper Research predicts. 5G service revenue will reach $600 billion by 2026, the firm projects. Those figures might come as something of a surprise for observers skeptical about the 5G business model. 

And the forecast might be on the optimistic side. Still, the history of next-generation mobile networks is that each successive generation displaces those before it. 

source: Telegeography 

So essentially, 5G revenues will displace 4G, 3G and 2G subscription revenues, at the very least. Basically, arguing that 5G will eventually represent 77 percent of total service revenue is only to state that mobile service is purchased by most humans, and that, over time, 5G becomes the standard platform for such purchases. 

source: Telegeography 

To be sure, new revenue sources ranging from internet of things to edge computing will add to revenue. But the basic revenue stream will continue to be service for phones used by people. Incremental revenue growth will come from connectivity and real estate services provided to servers and sensors.

But consumer mobile phone service will remain the mainstay.

Concerns about the “5G business model” tend to reflect concerns from mobile service provider executives who have only recently upgraded to 4G, and therefore face tougher issues investing in yet another next-generation network, or which operate in markets with relatively light data consumption requirements.

Over a longer perspective, 5G revenue is virtually assured, as it becomes the primary network most people use. The only way 5G could fail to attain that position is if mobile service itself suddenly lost favor.

Will Thailand Mobile Market Become a Duopoly?

A proposed big merger of mobile service providers True and Dtac in Thailand would create a new market leader with as much as 52 percent share. Current market share leader AIS would drop to second with about 44 percent share, creating a two-provider market. 

source: Yozzo 

Many observers believe a duopoly would not be conducive to high rates of innovation or price competition. Three or four competitors is the way the market structure alternatives generally are framed. In other words, a minimum of three providers is deemed essential to drive investment, innovation and price benefits for consumers.  

Two decades ago, the Organization for Economic Cooperation and Development noted that the entrance of a third mobile provider was correlated with faster subscriber growth. That noted, many observers also believe the long-term stable structure of any telecom market is oligopoly, though periodic market entry by new providers produces the expected competitive effects.

Back to the Future?

The Digital Nasional Berhad, a Malaysian government entity, has been given a monopoly on 5G spectrum, something virtually unprecedented, and also is supposed to become the sole national provider of 5G infrastructure.

That move back to monopoly is relatively rare in the global communications business, and especially rare when there is not clear evidence of market failure. In fact, where market failure exists, it normally is rectified quite quickly by business restructuring (mergers, acquisitions, bankruptcies).

DNB represents something else: a turn back to monopoly supply in the absence of clear evidence of market failure requiring it.

Sanctioned monopolies--public or private--typically exist because there is some market barrier to sustaining multiple suppliers. Roads, airports, seaports, electricity and natural gas supply, water and sewage systems provide obvious examples. In the decades prior to 1980, telecommunications was widely believed to be such a case. 

Virtually all telecom operations globally were official government monopolies, and often also operated directly by the government. All that began to change in the 1980s, gathered force globally in the 1990s and now competition is the common pattern in communications. 

Still, some believe growing capital investment, low growth and challenged profit margins will lead to a lessening of competition, at best, and re-monopolization at worst. And that is the issue in Malaysia.

That presumably also means future generations of mobile network, such as 6G, also will supplied as a monopoly by the DNB. 

There is an argument for such intervention when the markets are not working. That was believed to be the case for most of the history of global telecommunications. 

And, to be certain, there are concerns in some quarters about the long-term viability of multiple facilities-based mobile service providers. This is more than the consolidation we already commonly see in the competitive telecom business. 

In some regions, some suggest profitability is so difficult that future markets might only sustain one supplier. So, the industry would return to monopoly supply. Sustainable profits are the issue, in some cases, some argue.  

It does not seem that facilities-based competition in Malaysia is so ruinous that private entities are unable to sustain private 5G, though. 

A study produced by DT Economics and sponsored by the GSMA argues a 5G monopoly owned by the government points out that the mobile market in Malaysia is not broken.

 “Malaysia has already achieved a competitive mobile market,” the report argues. “ It has four major Mobile Network Operators (MNOs), each having a market share of between 18 and 28 percent, with one additional smaller player (with a market share of less than 5 percent).”

“Malaysia also has a small, but a well-established, Mobile Virtual Network Operator (MVNO) market hosted by the largest four MNOs,” the authors say. 

The market arguably has gotten more competitive with each mobile next generation network, to be sure. The issue is the degree to which the private entities are unable to sustain themselves based on competitive access to spectrum and facilities-based networks. 

source: DT Economics

If if one accepts the thesis of higher capital investment in 5G or other future networks, it is not necessary to re-monopolize either spectrum or infrastructure. Mobile firms are capable of creating infrastructure sharing mechanisms that reduce costs, but on a voluntary basis. 

One also can argue that mobile firm mergers accomplish many of the same objectives as infrastructure sharing or monopoly facilities: a reduction of cost, while arguably maintaining a higher rate of innovation. 

Monopoly and wholesale are not synonymous, of course. 

Wholesale is the norm for international communications, as in the case of data access, messaging or voice services. No single company has a network that reaches “everywhere,” so that is obvious. Domestic operations are far more complex.

In most markets, fixed network capacity has been a near-monopoly and wholesale underpins competition. In mobile markets, facilities-based competition is typical, though wholesale access remains important for mobile virtual network operators where MVNOs are lawful. 

As a rule, movements toward wholesale have been gaining ground in the local access markets. Mobile operators divesting their cell tower assets and leasing access provide the best examples, but more recent actions have mobile operators outsourcing their information technology platforms for 5G to hyperscale cloud computing suppliers. 

source: McKinsey

The broader strategic issues concern value: where can service providers create new value most effectively, and how does that drive capital investment decisions? 

Some might argue DNB confuses wholesale with monopoly. The former almost always happens because it makes good business model sense. That latter almost always happens because there is a failure of business models. 

Some would argue there is no evidence of market failure requiring re-monopolization.

In 6G Era, Mobile Substitution Might be a Big Deal

Since most observers expect 6G to feature access speeds at least 10 times greater than 5G, that implies top speeds in the range of 100 Gbps, with a lower range in the 10 Gbps region. 

 

source: Navixky

In fact, some believe top speeds could reach a terabit per second. 

 

source: Navixky

All that has to be a driver of thinking about upgrades of cabled internet access networks. If, within the next decade, mobile networks can reasonably deliver gigabit to 10 Gbps speeds, that makes them substitutes for the fixed network. And if, in a decade, 10 Gbps to terabit-per-second speeds are feasible, then cabled networks might in some cases be the second-fastest networks available to consumers. 

All of that could have big implications for internet service provider market share. The issue in some markets will not be “cable or telco” but rather “mobile versus fixed.”

5G is Different from All Prior Mobile Next-Generation Networks

5G networks are the first mobile platforms specifically requiring separation of control plane and data plane functions; the first to require virtualization and also the first to require edge computing. 5G also is the first mobile network generation where mobile operators are shifting to hyperscale third parties for core network computing functions in the control plane as a practical matter, though the 5G standards so not require it.

Separation of the data plane from the control plane is a fundamental architectural principle of cloud-native communications networks. That, in turn, also applies to the ways connectivity service providers build their 5G networks, where it comes to management and control.

source: Marc's blog 

Separation of data and control planes is the foundation of virtualized networks, and since the 5G network is, by definition, virtualized, underpins all 5G core and access networks. 

The control plane can be thought of as the signaling and routing functions of the network. The data plane is the part of the network that actually delivers and sends user data and content (sometimes known as the user plane, forwarding plane, carrier plane or bearer plane) is the part of a network that carries user traffic).

Separated control and data planes therefore underpin the role of computing resources within the connectivity providers’ network. The data plane physical network must connect every user. The control plane functions can be housed anywhere in the network where it makes sense. 

The virtualization principle also creates the value of edge computing. From a service provider perspective, control plane separation allows less capital investment in firmware and hardware, as control and processing logic and  functions can happen at fewer locations. 

In the mobile access network, that means separating radios from baseband signal processing units, allowing many fewer of the latter to be purchased and used. 

The 5G control plane also requires edge computing, though. Some service provider control logic remains near the physical network edge, but not at the absolute physical edge, or the radio transmission edge. 

In other words, the 5G network requires edge computing, simply to supply control plane functions. 

source: Reply 

Similar considerations apply to the data plane. Some applications will require very-fast processing. So there will be a necessity, not simply an advantage, to having computing take place as close to the end user device as possible (economically and computationally). 

We might debate whether edge computing is an example of “data plane” or the “control plane.” Some of us would say edge computing is “data plane,” since it is a necessary part of processing end user requests and data, in the same way that remote cloud computing requests provide data plane (end user applications) functions. 

source: Accenture 

The bottom line is that 5G networks, and presumably all to follow, will use edge computing as a principle of the control plane and data plane functions.

Fixed-Mobile Integration Beyond Unified Communications?

Fixed-mobile convergence--the service provider ability to supply retail services to customers using features of both the mobile and fixed networks, has been a background issue for service providers for more than two decades. 

In the 5G era it is in part an effort to enable seamless customer experience when using mobile and other devices, irrespective of which network (fixed or mobile) is used. That might range from simple authentication processes, the ability to support a single “persona” on either network, common security processes or failover from one network to the other. 

source: Heavy Reading 

In the past, FMC has largely been an issue for suppliers of enterprise communications (unified communications, for example). And that might still the case for 5G FMC, a survey by Heavy Reading suggests. Internet of things and new service tiers also are viewed as promising outcomes. 

The 5G era adds a new “back end” interest in convergence. The abil;ity to support virtual private networks using network slicing could, in principle, be combined with features of a fixed network. The simplest example might be simultaneous customer use of all the bandwidth available from both a fixed and a mobile network. 

source: Broadband Forum

Early on, the ability to aggregate bandwidth from any available network is likely to be the most common form of FMC.As in the past customers have switched their mobile devices from mobile network to fixed network Wi-Fi, FMC might take the process one step further and support seamless use of all available bandwidth, automatically. 

There might be additional angles, since the expected 5G small cell radio network requires lots of optical fiber backhaul, boosting the value of a dense optical fiber backhaul network. 

In turn, such dense optical backhaul networks and small cell architectures are the possible foundation for many other services, running from edge computing to internet of things, artificial intelligence and virtual reality applications and private networks as well. 

That is not a traditional understanding of FMC, but is a new angle as well: more architectural integration of the backhaul networks supporting both fixed and mobile access. 

Who Will Lead in 5G Private Networks?

 Microsoft (presumably Azure), AT&T and Deutsche Telekom are viewed by enterprises that already are using either 4G private networks of private 5G networks as the “most innovative private network provider globally,” according to Omdia. 

Those findings should not come as a surprise. Public networking suppliers never have dominated the private networks space, which has been the province of “do it yourself” solutions or the work of system integrators. 

There is a reason public networks terminate at the side of the house or business, while premises networking long has been a related but different business, dominated by different suppliers. 

Think about any local area network (cabled or wireless) and it is clear that private networks of any sort--and so far 5G is no exception--are a different domain than wide area networking. Public networking suppliers can, of course, create business units to compete in the private networks business. That is what AT&T and DT are doing. 

But LANs and private networks are an adjacency, not a core competence for a WAN services supplier. LANs and private networks can use technologies similar to those used by WANs (internet protocol, Ethernet, cables and connectors, routers, switches and so forth), but private networks do not require use of the public infrastructure. 

source: Cloudflare 

Two thirds of enterprises also require private network suppliers to demonstrate integration with their existing cloud platform before they will buy, Omdia also notes. That also makes sense. 

The larger point is that mobile service providers might not have such clear advantages as might be supposed when private 5G networks are considered. That does not mean WAN suppliers cannot be successful, simply that to be successful they will have to create separate business units focused on enterprise private networks. 

To do so, they will have to compete with many other private networking specialists and integrators that traditionally have made a living designing and building such networks for enterprises.

Mid-Band is the Anchor for 5G

Though the 5G standards do not specify frequency as strictly as did earlier mobile next-generation networks, 5G has leaned on mid-band spectrum for a few obvious reasons. In most countries, mid-band spectrum is available to use, even if other assets in the low-band and millimeter wave regions (high band) also are being authorized. 

source: Ericsson

The big capacity gains are to be found in mid-band and high-band frequency ranges, however. Low-band spectrum’s greatest value is coverage, though. Latency performance is partly a result of cell architecture and partly a result of the actual design standards. 

source: American Tower  

Over time, spectrum used to support legacy mobile networks eventually is decommissioned as the legacy networks are shut off. So, over time, all spectrum assets are repurposed to support the next-generation networks as well. 

Over time, this has implications for device design, as radios must be capable of supporting literally all the frequencies the newer networks use. All that affects device cost as well. 

source: Nokia 

There are some obvious reasons why mid-band spectrum will be the core of 5G access efforts. It provides coverage that can be as much as 90 percent the same as existing mid-band networks supporting 4G. That means less capital investment than new millimeter wave small cell networks.

So ABI Research forecasts that approximately 90 percent of 5G cell sites in emerging markets will use a combination of sub-6 GHz bands by 2026. Mostly, that means the mid-band frequencies that already underpin 5G in countries that have launched 5G service commercially. 

The choice of mid-band spectrum is partly borne of necessity and partly borne of availability. The necessity is that every next-generation mobile network requires additional spectrum resources. 

The availability is that spectrum in the 3 GHz to 4 GHz range is relatively less encumbered in many markets. So it is available to assign for support of 5G. Also, since frequency is positively correlated with capacity, while negative correlated to signal propagation, mid-band spectrum provides a balance of coverage and capacity. 

source: Jim Salter

Looking only at the potential 5G capacity, it is clear that, eventually, millimeter spectrum will be the source of most of the coming capacity gains. 

In a spectrum survey of 32 emerging markets conducted by ABI Research, at least half  of countries will have allocated the low band (less than 1 GHz) spectrum for 5G. Some 87 percent of  countries will use spectrum in the 1 GHz to 6 GHz regions by 2023. 

Spectrum in the 26 GHz and 28 GHz regions will be used by 34 percent and 12 percent of respectively by 2023. 

Mid-band is the anchor region of spectrum for 5G, as important as millimeter wave capacity is to supply capacity.

True and Dtac Explore Merger in Thai Market

C.P. Group and Telenor Group are exploring a merger of True and dtac. Though the combination will reduce the number of leading mobile service providers in Thailand, and give the combined entity about 532 percent share of the installed base, the merger also seems aimed at boosting investment in digital application assets.

source: Yozzo 

“The new company has the intention to raise venture capital funding together with partners of US$100 million to $200 million to invest in promising digital startups,” said Jørgen Rostrup, Telenor Group EVP. 

source: Yozzo 

Ericssson to Acquire Vonage

Ericsson is acquiring Vonage, a move said to be aimed at  boosting Ericsson’s capabilities to support “wireless enterprise” application development. 

“Vonage gives us a platform to help our customers monetize the investments in the network,”  said Börje Ekholm, Ericsson CEO, pointing to “Vonage’s strong developer ecosystem.” Vonage already has 20,000 enterprise customers globally, he noted. 

The Vonage Communications Platform represents more than one million registered developers globally, Ericsson says, allowing them to embed high quality communications - including messaging, voice and video - into applications and products. 

Notably, by 2025, Ericsson expects the application programming interface market will be “more than 50 percent of the global RAN market,” said Ekholm, implying global RAN market opportunity somewhere around $44 billion in 2025, according to multiple sources.  

source: Ericsson 

Some forecasts project a smaller market, perhaps in the $35 billion annual range by 2025. Some estimates call for only about $17 billion in global RAN revenue by 2027 or so.   

Aside from providing a platform to build 4G and 5G enterprise applications (think of any enterprise application being enabled for video, voice and messaging using those mobile networks), the VCP, unified communications and communications as a service businesses represent substantial revenue upside for Ericsson, potentially. 

The VCP opportunity might be collectively be much bigger than the entire global RAN infrastructure market by 2025 or so, and the API segment along might be bigger than the global RAN market in absolute terms, using the lowest available market forecast projections of less than $17 billion. 

The deal will have to be approved by regulators in the first half of 2022. The plan is for Vonage to run as a subsidiary of Ericsson.

Mobile and Satellite Interests Spar Over 12 GHz Spectrum

It comes as no surprise that mobile operators and satellite interests are sparring over 12 GHz spectrum. Mobile and satellite interests have fought over all sorts of spectrum over the years, and many would note, as with the C-band reallocations in the U.S. market, most often the mobile interest wins. 

As always, private interests will be winners and losers no matter how the policy framework ultimately is settled. RS Access, for example, owns licenses in the 12-GHz band, and already uses that spectrum for wireless broadband. 

Dish Network also uses 12 GHz to support its satellite services, but additionally is a budding 5G mobile services supplier as well. Dish has been arguing for freeing up use of its own spectrum to support 5G. 

Looking historically, one might argue the 5G interests will mostly win. The new factor is spectrum sharing , though, that might allow both satellite and terrestrial uses. The arguments almost always involve claims of interference versus claims that protection and mitigation is possible. 

Notably, 12 GHz spectrum now is viewed as “mid-band spectrum,” as millimeter wave spectrum much higher in the electromagnetic spectrum is authorized, or will be authorized, to support coming generations of mobile networks, including 6G

the millimeter wave bands. 

source: Nokia Bell Labs