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Though fiber technologies and deployments continue to capture the most attention when it comes to broadband, two technology demonstrations at CableLabs 10 G Showcase provided clear evidence that DOCSIS 4.0 will keep cable operators competitive with their current outside plants. Furthermore, the advancements shown during each of the demonstrations could potentially accelerate the deployment of DOCSIS 4.0 technologies across a wider network footprint than previously thought. Assuming supply chain issues are resolved later this or early next year and lead times for next-generation silicon improve, DOCSIS 4.0 lab testing could move beyond the prototype stage earlier than expected.

Charter and Comcast both took to the stage during the CableLabs event to demonstrate their respective approaches to DOCSIS 4.0. Charter is the biggest proponent of the extended spectrum (ESD) variant of DOCSIS 4.0, whereby the outside plant spectrum is increased to 1.8GHz from today’s 850 MHz to 1 GHz, while Comcast is behind the full-duplex (FDX) variant, which uses 1.2 GHz of the spectrum but allows for the shared use of that spectrum for both downstream and upstream bandwidth.

The deployment of both technologies is predicated on the rollout of distributed access architectures, either remote PHY (R-PHY) or remote-MACPHY (R-MACPHY). Those products are available today, with Comcast already having deployed over 30k R-PHY devices (RPDs) in their network. Charter favors remote MACPHY and demonstrated an R-MACPHY node from Vecima Networks using first-generation silicon from Broadcom, which gives them the ability to provide service to a single service group today, growing to 2 service groups with the second generation chipset that should be ready later this year.

Regardless of the difference in technological and architectural approaches between the two major operators, both demonstrations focused on how the dramatic speed improvements expected with DOCSIS 4.0 could be realized without significant impact on the existing outside plant. In both cases—whether ESD or FDX—operators are going to need to upgrade their outside plant, specifically taps and amplifiers. There is no getting around that. However, if operators can make changes to the individual outside plant elements without having to disrupt the location of those elements and the power required to drive them, then that is a win-win all around.

First, Charter demonstrated speeds of nearly 9 Gbps down and 6 Gbps up using a cascade of 4 amplifiers. The amplifiers had been upgraded with 1.8 GHz modules from Teleste that can be installed in the existing amplifier stations without having to change any of the spacing between those stations. Charter also demonstrated signal levels and MERs (Modulation Error Ratios) all the way to a 2 GHz tap from ATX Networks and a prototype cable modem that are within similar ranges of today’s DOCSIS 3.1 networks. These results are critical in demonstrating that Charter could conceivably achieve near-10Gig speeds without having to go beyond the network changes they are planning to make. Those changes include simple faceplate changes to the taps (which don’t disrupt service) and module swaps at each existing amplifier station.

Eliminating the requirement to pull fiber deeper and alter their existing amplifier cascades further means Charter will reduce its capex spend and increase the speed with which it rolls out DOCSIS 4.0 to subscribers. It also means the operator’s current efforts to move to high-split DOCSIS 3.1 architectures will not be a stranded investment. Instead, those upgrades will simply be a stepping stone to what was shown in their demonstration.

Finally, another interesting element of Charter’s demo was its use of a GAP (Generic Access Platform) node housing for its R-MACPHY device. Charter has been a major proponent of GAP because it helps Charter solve its problem of having dozens of different node housings from several different vendors in their networks. It also gives Charter a modular platform that can be used to deliver DOCSIS 4.0, FTTH, and wireless services. It also incorporates the ability to add edge compute functions. Although the GAP node in the demonstration did include a compute module from Intel, that module wasn’t used in today’s demonstration. Nevertheless, with CableLabs focused on providing “optionality” for its cable operator constituents, the combination of GAP nodes plus the ability to harness edge compute functions so deep in access networks opens a world of service options for Charter.

Comcast followed Charter and demonstrated multiple access network configurations, all supporting production traffic and all being driven by a vCMTS core located in a Comcast headend not too far from CableLabs headquarters in Louisville, CO. Comcast first demonstrated a DOCSIS 3.1 high-split architecture using an RPD and 1.2GHz amps. From the same node, Comcast also demonstrated a 10G EPON OLT. This particular demonstration has direct applicability today, as Comcast is in the midst of an edge-out strategy, expanding its networks from an existing node base or hub site location. In some cases, these edge-outs will be done with fiber; in other cases, they will use coax. In both scenarios, Comcast can leverage the existing vCMTS core for the MAC layer and subscriber management control of both physical media, making it easier to turn up subscribers and achieve ROI.

Comcast’s other demonstration included prototype amplifiers with built-in echo cancellation, allowing them to deliver FDX in a node plus two environments. Up to this point, any FDX deployments at Comcast were in node plus zero environments, where Comcast had pulled fiber into neighborhoods and eliminated amplifier cascades altogether. For the vast majority of cable operators, node + 0 based FDX just hasn’t been justifiable from a capex perspective. The high cost of deep fiber rollouts is what led to the development of extended spectrum DOCSIS and its ability to be delivered over existing amplifier cascades.

But with Comcast proving that FDX can work in a node + 2 environments, using amplifiers with built-in echo cancellation, suddenly the deployment cost comes down considerably for operators. Is it enough of a cost reduction to garner interest among a large enough contingent of MSOs? That remains to be seen.

Potentially the most meaningful development of today’s showcase wasn’t even part of a technical demonstration. Instead, it came when Comcast’s Elad Nafshi said that the operator’s goal is to prove FDX can work in a node + 6 architecture. Comcast has promised to provide more information about the FDX amplifier concept and its performance and use cases later this year. But if Comcast can deliver an FDX amplifier and product set that delivers FDX across existing amplifier cascades, then, similar to Charter’s demonstration of ESD across existing amplifier cascades, the rollout of DOCSIS 4.0 can occur more quickly and less expensively than previously thought.

The net result of both technology demonstrations is that any concerns around the value of upgrading to DOCSIS 4.0 relative to the cost are now taken off the table. Instead, the question now shifts to one of timing. Operators around the world were firmly in the camp of one technology or the other, with all agreeing that some level of fiber would be a major part of any future network upgrade. Now, operators have two similarly-performing technology options in front of them, each requiring upgrading of existing amplifiers, but with two very large questions around timing and availability of key components.

Nevertheless, after today’s demonstrations, the value and relevance of DOCSIS 4.0 just improved significantly. With theoretical speeds matching those offered by today’s XGS-PON technologies, cable operators can easily buy themselves more time and continue to maximize their DOCSIS networks for many years to come.

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Outlook Remains Favorable

Preliminary findings suggest 5G NR mmWave investments improved in the fourth quarter but this was not enough to change the full-year growth momentum. Following two years of exponential growth, mmWave revenues increased 15% to 20% in 2021, propelling 5G NR mmWave to account for 1% to 2% of total sub 6 GHz plus mmWave RAN revenues.

Worldwide RAN Revenue - Dell'Oro Group

While mmWave NR investments have for the most part surprised on the upside relative to the expectations outlined three to four years ago, mmWave RAN revenues were weaker than what we outlined going into the year. Still, we are not concerned about the slowdown and the implications for the long-term business case and see this more as a short-term calibration reflecting the fact that the sub-6 GHz spectrum still provides the most compelling RAN economics.

Additional mmWave highlights from the 4Q 2021 and 5-Year RAN reports:

  • Ericsson leads the mmWave RAN market.
  • The mismatch between capex and data consumption when comparing the sub-6 GHz and mmWave spectrum will evolve gradually over time – global 5G NR mmWave revenues are projected to reach $1 B to $2 B by 2026.
  • Mobile remains the primary focus, however, gNB and repeater technology advancements are expected to improve the FWA business case.

Dell’Oro Group’s RAN Quarterly Report offers a complete overview of the RAN industry, with tables covering manufacturers’ and market revenue for multiple RAN segments including 5G NR Sub-6 GHz, 5G NR mmWave, LTE, macro base stations and radios, small cells, Massive MIMO, Open RAN, and vRAN. The report also tracks the RAN market by region and includes a four-quarter outlook. To purchase this report, please contact us by email at dgsales@delloro.com.

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OFC 2022 was held in San Diego, California with a large number of active participants at the show, filling the exhibit halls after two years of mostly virtual attendance. However, to accommodate those unable to attend in person, OFC held many virtual sessions. I was one of those remotely attending. Even though I attended OFC virtually, I think my experience, while different than attending in person, was really good. That is, I learned a lot. Here are four of the things I learned and found the most interesting at OFC 2022.

The top of my list was the announcement by EFFECT Photonics that the company was buying the coherent DSP and FEC technology from Viasat. This combination brings together the most valuable components in any coherent transponder: InP-based photonic integrated circuit that includes a high-performance tunable laser, modulator, amplifier, and receiver all on one chip along with the high-speed digital electronics. The only items that EFFECT Photonics will need to source are the TIA and Driver when producing coherent pluggable optics in the future. To put this in perspective, one of the key attributes for both Acacia’s and Inphi’s value was having all of these technologies in-house.

The second thing I learned during OFC was the volume of coherent DSPs shipped by Cisco (Acacia), but maybe more importantly, how fast the ramp of shipments is occurring for the company’s newest coherent DSP (Greylock) that are used for 400 Gbps pluggable optics. During OFC, Cisco announced that cumulative shipments of the company’s 600 Gbps-capable DSP (Pico) by port volume was 100k, which converts to 50k DSP chips since each DSP supports two ports. The Pico DSP is primarily used for metro and long haul spans that require the best-performing optics. Cisco, also, announced that the cumulative shipments of Greylock was at 50k with nearly half shipped in the most recent fiscal quarter and with most being sold in a 400ZR QSFP-DD; The remainder is used in 400 Gbps CFP2-DCO. This is a very fast ramp for Greylock, considering it was introduced over a year after Pico.

The third item of focus at OFC this year seemed to center around what comes after 400ZR. While there was talk about the progress of 400ZR and the possibility of 800ZR in a few years, I felt the discussions were more about 400ZR+. It seems 400ZR+ will continue to be a marketing term and not a standard. That is to say, companies were announcing better-performing 400ZR+ compared to competitors. And as you know, better performance, product differentiation usually translates to non-standard. However, one thing in common is that the vendors are producing 400ZR+ in a QSFP-DD plug. I had originally thought that 400ZR+ would generally be used in a CFP2 package due to thermal requirements, but many of these companies have solved that problem and can deliver better-performing 400 Gbps with just an extra watt or two of power. Of course, this makes me wonder (out loud), would operators be willing to forgo the standards-based 400ZR with a 120 km limit for a non-standard based 400ZR+ with span limits that could exceed 600 km if it is also a QSFP-DD and consumes only a couple watts more? I think we all know the direction Windstream chose with the partnership with II-VI (400 ZR+ in QSFP-DD to enable the use of a ROADM line system).

The last item I want to mention is the excellent tutorials and classes that OFC holds every year where people volunteer their time to share what they do and to present informational sessions. I wasn’t able to watch all of the sessions that OFC recorded and made available to virtual participants, but the ones I watched were all done well and the presenters did an excellent job. One, in particular, that stood out for me was a session by Alexander Nikolaidis of Meta (Facebook) called Building a Global Content Provider Network at Scale. He gave a really good overview and understanding of how the company thinks through building and scaling a large content delivery backbone. He walked the audience through the choices and trade-offs that are considered. Interestingly, many of these choices and trade-offs are similar to those made by the largest telecom operators. So, at the end of the day, the challenges and choices for scaling a large backbone network aren’t that different whether it’s a large Internet content provider or a tier-one communication service provider.

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Huawei Loses Some Ground — Still Leads $100 B Telecom Equipment Market

We just wrapped up the 4Q21 reporting period for all the Telecommunications Infrastructure programs covered at Dell’Oro Group, including Broadband Access, Microwave & Optical Transport, Mobile Core Network (MCN), Radio Access Network (RAN), and SP Router & Switch. The data contained in these reports suggests that total year-over-year (Y/Y) revenue growth slowed in the fourth quarter to 2%, however, this was not enough to derail full-year trends.

Preliminary estimates suggest the overall telecom equipment market advanced 7% in 2021, recording a fourth consecutive year of growth, underpinned by surging wireless revenues and healthy demand for wireline-related equipment spurred on by double-digit growth both in RAN and Broadband Access. Total worldwide telecom equipment revenues approached $100 B, up more than 20% since 2017.

In addition to challenging comparisons, we attribute the weaker momentum in the fourth quarter to external factors including COVID-19 restrictions and supply chain disruptions.

The analysis contained in these reports suggests the collective global share of the leading suppliers remained relatively stable between 2020 and 2021, with the top seven vendors comprising around 80% of the total market.

 

2021 Worldwide Telecom Equipment Revenue

 

Ongoing efforts by the US government to curb the use of Huawei’s equipment is impacting the company’s position outside of China. Even so, Huawei continued to lead the global market, underscoring its grip on the Chinese market, depth of its telecom portfolio, and resiliency with existing footprints.

 

2021 Telecom Equipment Revenue by Region DellOroGroup

 

Initial readings suggest the playing field is more even outside of China, with Ericsson and Nokia essentially tied at 20% and Huawei accounting for around 18% of the market.

The relative growth rates have been revised upward for 2022 to reflect new supply chain and capex data. Still, global telecom equipment growth is expected to moderate from 7% in 2021 to 4% in 2022.

2021 Excluding China Telecom Equipment Revenue

 

Risks are broadly balanced. In addition to the direct and indirect impact of the war in Ukraine and the broader implications across Europe and the world, the industry is still contending with COVID-19 restrictions and supply chain disruptions. At the same time, wireless capex is expected to surge in the US this year.

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Open RAN ended 2021 on a solid footing. Preliminary estimates suggest that total Open RAN revenues—including O-RAN and OpenRAN radios and baseband—more than doubled for the full year 2021, ending at a much higher level than had been expected going into the year. Adoption has been mixed, however. In this blog, we review three Open RAN-related topics: (1) a recap of 2021, (2) Mobile World Congress (MWC) takeaways, and (3) expectations for 2022.

2021 Recap

Looking back to the outlook we outlined a year ago, full-year Open RAN revenues accelerated at a faster pace than we originally expected. This gap in the output ramp is primarily the result of higher prices. LTE and 5G macro volumes were fairly consistent with expectations, but the revenue per Open RAN base stations was higher than we modeled going into 2021, especially with regard to brownfield networks. Asymmetric investment patterns between the radio and the baseband also contributed to the divergence, though this is expected to normalize as deployments increase. In addition, we underestimated the 5G price points with some of the configurations in both the Japanese and US markets.

Not surprisingly, the Asia-Pacific (APAC) region dominated the Open RAN market in 2021, supported by large-scale greenfield OpenRAN and brownfield O-RAN deployments in Japan.

From a technology perspective, LTE dominated the revenue mix initially but 5G NR is now powering the majority of investments, reflecting progress both in APAC and North America.

Source: NTT DoCoMo

Mobile World Congress (MWC) Barcelona 2022

Open RAN revenues are coming in ahead of schedule, bolstering the narrative that operators want open interfaces. Meanwhile, the progress of the technology, especially with some of the non-traditional or non-top 5 RAN suppliers has perhaps not advanced at the same pace. This, taken together with the fact that the bulk of the share movements in the RAN market is confined to traditional suppliers, is resulting in some concerns about the technology gap between the traditional RAN and emerging suppliers. A preliminary assessment of Open RAN-related radio and baseband system, component, and partnership announcements at the MWC 2022 suggests this was a mixed bag, with some suppliers announcing major portfolio enhancements.

Among the announcements that most stood out is the one relating to Mavenir’s OpenBeam radio platform. After focusing initially on software and vRAN, Mavenir decided the best way to accelerate the O-RAN ecosystem is to expand its own scope to include a broad radio portfolio. The recently announced OpenBeam family includes multiple O-RAN 7.2 macro and micro radio products supporting mmWave, sub 6 GHz Massive MIMO, and sub 6 GHz Non-Massive MIMO.

Source: Mavenir

NEC announced a major expansion of its O-RAN portfolio, adding 18 new O-RUs, covering both Massive MIMO and non-Massive MIMO (4T4R, 8T8R, 32T32R, 64T64R). NEC also recently announced its intention to acquire Blue Danube.

Another major announcement was Rakuten Symphony’s entry into the Massive MIMO radio market. Rakuten Symphony is working with Qualcomm, with the objective of having a commercial Massive MIMO product ready by the end of 2023.

Fujitsu also announced multiple enhancements to its macro and small cell Open RAN portfolio including new mid-band O-RAN compliant Massive MIMO radios with 2022 availability.

Recent Massive MIMO announcements should help to dispel the premise that the O-RAN architecture is not ideal for wide-band sub-6 GHz Massive MIMO deployments. We are still catching up on briefings, so it is possible that we missed some updates. But for now, we believe there are six non-top 5 RAN suppliers with commercial or upcoming O-RAN Sub-6 GHz Massive MIMO GA: Airspan, Fujitsu, Mavenir, NEC, Rakuten Symphony, and Saankhya Labs.

Putting things into the appropriate perspective, we estimate that there are more than 20 suppliers with commercial or pending O-RAN radio products, most prominently: Acceleran*, Airspan, Askey*, Baicells*, Benetel*, BLiNQ*, Blue Danube, Comba, CommScope*, Corning*, Ericsson, Fairwaves, Fujitsu, JMA*, KMW, Mavenir, MTI, NEC, Nokia, Parallel Wireless, Rakuten Symphony, Saankhya Labs, Samsung, STL, and Verana Networks* (with the asterisk at the end of a name indicating small cell only).

The asymmetric progress between basic and advanced radios can be partially attributed to the power, energy, and capex tradeoffs between typical GPP architectures and highly optimized baseband using dedicated silicon. As we discussed in a recent vRAN blog, both traditional and new macro baseband component suppliers—including Marvell, Intel, Qualcomm, and Xilinx—announced new solutions and partnerships at the MWC Barcelona 2022 event, promising to close the gap. Dell and Marvell’s new open RAN accelerator card offers performance parity with traditional RAN systems, while Qualcomm and HPE have announced a new accelerator card that will allegedly reduce operator TCO by 60%.

2022 Outlook

Encouraged by the current state of the market, we have revised our Open RAN outlook upward for 2022, to reflect the higher baseline. After more than doubling in 2021, the relative growth rates are expected to slow somewhat, as more challenging comparisons with some of the larger deployments weigh on the market. Even with the upward short-term adjustments, we are not making any changes at this time to the long-term forecast. Open RAN is still projected to approach 15% of total RAN by 2026.

In summary, although operators want greater openness in the RAN, there is still much work ahead to realize the broader Open RAN vision, including not just open interfaces but also improved supplier diversity. Recent Open RAN activities—taken together with the MWC announcements—will help to ameliorate some of these concerns about the technology readiness, though clearly not all. Nonetheless, MWC was a step in the right direction. The continued transition from PowerPoint to trials and live networks over the next year should yield a fuller picture.