5G NR is a good start, but just a start – cellcos need a cloud-native, fully virtualized 5G infrastructure if they want to move beyond standard consumer services, writes Hugh Ujhazy.
IDC expects that mobile data traffic in Asia Pacific will grow fourfold between 2018 and 2022, fueled by smartphone subscribers consuming and sharing video. This growth is expected to ride on the next wave of 4K, 8K and 3D formats, along with augmented and virtual reality apps. Connecting subscribers to their favorite media – regardless of location – and providing a better quality of experience (QoE) are becoming key retention strategies for service providers.
Monetizing those connections is proving difficult in the face of regulatory barriers, intense competition and a “flat” network infrastructure that is expensive to update, customize and scale. Customer expectation for constantly improving speed and quality coupled with decreasing cost of service is depressing revenues, with ARPUs declining across all markets in Asia-Pacific. The consistent demand from mobile consumers is “Give me more, for less”.
While the consumer market will remain the chief source of revenue in the near term, the greatest potential for new business is coming from enterprise markets, encompassing mobile broadband and Internet of Things (IoT) applications in diverse segments such as industrial automation, smart cities, eHealth and connected cars.
Responsibility for many of these solutions is being placed squarely on the shoulders of 5G. IDC’s 5G technology view essentially splits the 5G era into two separate but interconnected segments: developments related to 5G NR (e.g., air interface) and innovation in other areas (such as telco cloud, NFV/SDN, and network automaton/orchestration). While migration of the air interface will bring speed and service benefits, successful enterprise solution delivery will inevitably be founded on a cloud-native, fully virtualized 5G service provider infrastructure.
With the high-level of attention paid to cloud RAN initiatives at MWC 2018, operators are clearly interested in exploring how moving the RAN to a cloud model may make the most sense from a control and cost perspective. Anywhere from 70% to 80% of power consumption is tied to the RAN, so reducing that by virtualizing and centrally pooling the baseband units may be one way to lower network-related costs.
However, consideration of performance characteristics of hardware platforms supporting cloud RAN – along with potential complexity arising from multi-vendor integration – are factors which need to be considered when defining a cloud RAN vendor ecosystem and managing the infrastructure migration.
Even with these considerations, the cost benefits may prove a deciding factor long term. Broad industry consensus has emerged on the need to build cloud-native network infrastructure spanning the core, radio access, and transport networks to support 5G rollouts. While hardware will undoubtedly play a role in 5G architectures, cloud-native software, leveraging orchestration, are expected to be a defining characteristic in 5G networks. Aligning to a cloud-native strategy can help communications SPs to cost-effectively manage resource and support applications across the span of the telecom distributed cloud. Indeed, lowering 5G costs, particularly in the RAN, will be necessary for many communications SPs to economically justify moving from LTE to 5G.
This strategy has proven beneficial from both a cost reduction and revenue generation perspective. Concurrently, the move to cloud- and software-led planning has challenged NFV/SDN adopters to rethink how they engage with the vendor community and how they can benefit from a software-centric approach.
5G is coming, and it will push NFV across the network to the edge as use cases such as autonomous cars and tactile apps force new processes to handle the customization, dynamic allocation and automation required to provision and scale these services. Network orchestration is emerging as a strategic capability for managing increasingly complex, responsive networks and advanced technologies, including concepts such as network slicing and service chaining. Developing a roadmap that supports the evolution from cloud to increasingly automated vRAN orchestration will help service providers navigate the shift to the 5G-ready network.
Written by Hugh Ujhazy, associate vice president of IOT & Telecoms at IDC | Originally published on LinkedIn