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This blog post is a summary of RAN-related key takeaways from MWC 2019 Barcelona. For access to the full version, please contact daisy@delloro.com

RAN Optimism

The MWC event supported the premise we have communicated for some time that there are convincing reasons to be optimistic about the RAN market. One of the show’s key findings was a strong consensus that 2019 will be another solid year for the RAN market driven by growth in China, Korea, and the U.S.

While we have already projected that 5G NR would accelerate rapidly in 2019, key findings at the show increase our confidence level that 5G NR shipments and revenues will be material in 2019. We discuss the mobile infrastructure market’s 2018 performance in this press release.

Massive MIMO

Another key takeaway from MWC2019 was the strong focus on Massive MIMO. This increased confidence in the upwardly adjusted Massive MIMO projections we outlined in conjunction with recently published Mobile RAN reports. Given that operators have multiple tools in their toolkit to manage capacity (Figure 1), why are we so optimistic about the Massive MIMO opportunity in the sub 6 GHz spectrum? Learn more about Massive MIMO at Barcelona in this article.

Millimeter Wave

The Millimeter Wave (mmW) narrative has morphed somewhat over the past couple of years with the industry sentiment fluctuating about the role mmW will play for mobile applications. Even though the opportunity cost for operators with significant mid-band assets will be more favorable for

some time leveraging the macro grid and Massive MIMO, our view has always been that mmW will be an important technology over the long-term (there is no fourth alternative in Figure 1).

The most important takeaways from the event include: 1) mmW is now real, phones are coming to the market, and mmW shipments will be material in 2019, 2) The perception about Qualcomm’s mmW simulation is changing, 3) Findings validate our short-term and long-term forecast.

A summary of the latest Mobile RAN five-year forecast may be found here.

Open and Virtual RAN

In general good momentum during the show behind the shift towards opening up the RAN and moving away from proprietary hardware with Rakuten communicating its C-RAN (Cloud Radio Access Network) progress in Japan, Ericsson recently joining the ORAN Alliance, and Telefonica sharing its roadmap and ecosystem partners for Open Access – which did not include the larger macro RAN vendors for the SW stack or the radios.

Source: Telefónica

While there is no doubt that virtual RAN sceptics will be monitoring Rakuten’s performance when the company goes to live with its 5500 sites this fall, it remains to be seen how well true C-RAN systems will handle—for example, a site with 64T64R 100 MHz BW Massive MIMO systems, along with legacy 2G/4G systems.

To some degree, the event reminded both virtual and proprietary HW RAN proponents that both sides have something to bring to the table. Open RAN and Virtual RAN are making significant headway and there is excitement about this progress. However, the event did little to convince us of our long-standing thesis—that the shift toward RAN virtualization will eventually occur—but it will take time. Moreover, initially, it will be confined to non-traditional builds, e.g., new use cases, indoor deployments, greenfield deployments, and rural settings. Finally, after such deployments, it will need to be revised.

CBRS
The key takeaway from a CBRS perspective is the reduced risk that regulatory delays could eventually impact the ecosystem. With Pixel 3 and Galaxy S10 now supporting the CBRS band, the ecosystem will undoubtedly get a boost. In addition to Qualcomm’s Snapdragon X20/24, Sierra Wireless and Sequans Cassiopeia now also have production-grade modules.

Our CBRS forecast report, which suggests that will grow at a rapid pace between 2018 and 2022 with total RAN investments approaching $1 Billion and CBRS RAN shipments to eclipse half a million units. Learn more from my blog on the CBRS RAN market.

For access to the full version, please contact daisy@delloro.com

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After spending a few days at OFC 2019, I sat down and read through the notes I took during each meeting at the conference and concluded that I have fewer pages of notes for this OFC than in the past two OFCs attended. Kidding aside…This lack of notes was in no way an indication of the meeting quality. They were great meetings with a lot of information exchange. It was, however, an indication that nothing was “really” new at this conference from the past two conferences. In fact, at times, I felt a sense of Déjà vu.

At the conference 600 Gbps and 800 Gbps coherent optical components, DSPs, and systems were re-affirmed with samples, demos, and timelines.  As I understand it, the timeline for system availabilities are as follows:

  • 600 Gbps capable coherent line cards
    • Cisco’s NCS 1004, Infinera’s Groove G30 using Acacia’s DSP will be available by the end of March 2019
    • Fujitsu’s 1Finity T600 using NEL’s DSP was available one week before OFC
    • Huawei’s OSN with an in-house DSP will be available by end of March 2019
    • Nokia’s 1830 PSI-M with an in-house DSP will be available in 3Q 2019
  • 800 Gbps capable coherent line cards
    • Ciena is targeting the end of 2019 (I’m guessing last month of 2019)
    • Huawei by end of 2020 (I’m guessing last month of 2020)
    • Infinera is targeting 2H20 (I’m guessing the first month of 4Q 2020)

Nearly everyone talked more about 400 Gbps ZR in a QSFP-DD or OSFP form factor this year. This was the same as last year. However, now both Ciena and Infinera have announced plans for developing and manufacturing 400G ZR. So, there are definitely more companies interested in making and selling 400G ZR. We should see 400G ZR products and demo in OFC 2020.

The most interesting item I saw at OFC this year was probably a new product that Fujitsu is developing that they call Trans Lambda. It sounded like the company needed a couple more years to develop the product, but the concept was quite unique. The premise is that as the optical world hits Shannon’s limit, the use of L-band will increase. So, Fujitsu is working on a box that can shift C-band signals to L-band without an optical-electrical-optical conversion.  I’m looking forward to hearing how this technology develops and fits into the optical market in the future.

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2019 is the year of 5G. All of the pieces of the ecosystem are falling into place: the announcement of 5G smartphones is coming soon and numerous service providers are committing to 5G deployments this year. Following are my observations about the core from walking the show floor.

QUALCOMM
Qualcomm’s ceremony, which I unfortunately missed, brought together the industry leaders who made 5G happen in 2019, a year earlier than originally planned, with the 5G Non-Standalone (NSA) architecture. Qualcomm’s stand featured a live Dual Connectivity 5G NSA network demonstration of the combined bandwidth of three 20 MHz LTE carriers and four 100 MHz 5G carriers utilizing the 4G Evolved Packet Core (EPC).

For background information on the journey to 5G, see my previous blog, “The Twisted Road To 5G.”

Rakuten
“Cloud-Native” architecture at the core made the news at MWC.
The news was buzzing about Rakuten’s new mobile network being billed as “the world’s first end-to-end fully virtualized, cloud-native mobile network.” We got a chance to spend time with Tareq Amin, CTO, of Rakuten Mobile Network, Inc. and saw first-hand the network elements. The company is a new service provider in Japan with a license in the 1700 MHz band and 20 MHz of spectrum in the uplink and downlink (20×20). This provides a theoretical bandwidth of 400 Mbps with 256 QAM modulation and 4×4 MIMO. The network will launch as a 4G LTE network in October 2019 and will be 5G ready.

The following vendor news for the Rakuten network, focused on the core, was announced at the conference:

Rakuten has been open about its network deployment plans, encouraging the industry to learn from its pioneering efforts to realize an end-to-end fully virtualized cloud-native network. The company’s goals and plans are discussed here by CEO, Mickey Mikitani and here by CTO, Tareq Amin.

TELEFÓNICA
Telefónica’s Juan Carlos García, SVP of Technology and Architecture, outlined the company’s digital transformation plans, called the Telefónica Open Digital Architecture (TODA), for its fixed, mobile, and edge networks around the globe. TODA is an open architecture with disaggregated hardware and software that is fully virtualized for the radio access, the core, and the optical transport layer with software-defined networking (SDN). By 2022, Telefónica expects to start realizing the potential of TODA, completing the total transformation by 2025.

Casa Systems
At Casa Systems’ stand, Casa partnered with BT, demonstrating how its cloud-native 5G Packet Core with network slicing supports the convergence of fixed and mobile networks. Telefónica listed Casa Systems as a packet core partner in its TODA project. Casa Systems stated it is in trials with many Tier 1 service providers in North America and Europe.

Cisco, Ericsson, Huawei, Nokia, and ZTE
The top-five wireless core infrastructure vendors did not disappoint, each putting on a spectacular show with massive stands demonstrating its end-to-end technology prowess empowering 5G use cases, all enabled with their respective cloud-native cores. Their stands were packed with customers and potential customers leading to thousands of meetings. Each vendor had its share of press releases with 5G deals around the globe that are too numerous to name here. Links to the happenings at MWC19 from each of the top-five vendors may be found at Cisco, Ericsson, Huawei, Nokia, and ZTE.

Summary
These are just a few examples from a small sample of participants at MWC19 Barcelona. What has not been detailed here are all of the use cases on display by numerous vendors and the 25+ service providers who were exhibitors. Every 5G uses case that has been envisioned was demonstrated.

With so many 5G smartphone announcements, service providers’ 5G network launch announcements, and 5G infrastructure vendors already delivering their launch plans, the 5G era is upon us. We have embarked on the connected society. Everything that I saw confirms our positive outlooks for the Wireless Packet Core and IMS Core markets. See you at MWC19 Los Angeles in the fall. (Also, see our blog, “Wireless Packet Core Market CAGR is projected to be 3 Percent.”)

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Huawei captured 29 percent share of the telecom equipment market, increasing its market share by 8 percentage points since 2013. 

 

We just wrapped up the 2018 reporting period for all the Telecommunications Infrastructure programs covered at Dell’Oro Group.

For 2018, the top seven equipment manufacturers were Huawei, Nokia, Ericsson, Cisco, ZTE, Ciena, and Samsung. Combined these seven companies accounted for about 80 percent of the worldwide service provider equipment market revenue.

Additional key takeaways from the reporting period include:

  • Following three years of decline, the overall telecom equipment market grew 1 percent year-over-year in 2018. The positive turn in the year was due to higher demand for Broadband Access, Optical Transport, Microwave, and Mobile RAN.  The remaining equipment—Carrier IP Telephony, Wireless Packet Core, SP Router and Carrier Ethernet Switch—declined in the year.  The two largest equipment markets in the year were Mobile RAN and Optical Transport.
  • The worldwide Mobile RAN market surprised on the upside and performed better than expected in 2018. In addition to the strong focus on LTE and LTE-Advanced, the shift toward 5G NR continued to accelerate throughout the year.
  • The worldwide Optical Transport market continued to expand for a fourth consecutive year driven by strong sales of DWDM equipment in China and to large Internet content providers for data center interconnect.
  • Huawei’s revenue share continued to improve in 2018—gaining about two percentage points of share annually in each of the past five years. During this period, Ericsson’s and Nokia’s market share declined about one percentage point annually on average until 2018 when both vendor held their market share flat.
  • ZTE’s share which had typically been at 10 percent dropped two percentage points in 2018 due to the U.S. ban that caused the company to shut down portions of its business during the second quarter.

Dell’Oro Group telecommunication infrastructure research programs consist of the following: Broadband Access, Carrier IP Telephony, Microwave Transmission & Mobile Backhaul, Mobile Radio Access Network (RAN), Optical Transport, Service Provider (SP) Router & Carrier Ethernet Switch, Telecom Capex, Wide Area IoT, and Wireless Packet Core.

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Amazon’s latest acquisition in its ever-growing WiFi technology platform is the mesh networking pioneer eero systems. The deal was announced on February 11, 2019.

Eero, along with Luma, was among the first home networking suppliers to optimize enterprise-grade mesh networking technologies for residential CPE. This innovation meets two goals: improving WiFi coverage by using a series of mesh-connected access points and providing an improved level of network control when compared to the clunky user interfaces typically found on WiFi routers.

Eero’s products and platforms address a growing set of problems with home WiFi. One common problem is that traditional home routers, while powerful enough to generate a signal for most of a home, often have limited and clunky user interfaces. This makes it challenging for users to set specific network parameters or preferences. A second problem in larger or older homes is that brick and cinder block walls can quickly dampen a WiFi signal, creating dead spots. Historically, these dead spots have been addressed through the use of WiFi extenders, which simply repeat the signal generated by the central access point.

However, the problem with traditional WiFi extenders is two-fold:

  • The extender can only do its job when it can detect the original WiFi signal.
  • Each time the signal is repeated or extended, signal loss occurs to the tune of a 30% to 60% reduction in throughput.

Mesh networking capabilities from Plume, eero, Luma, Google, NetGear, D-Link, and similar companies do a far better job of maintaining a clean wireless signal though they still rely on signal repetition. By spacing multiple units throughout a home, these systems effectively create multi-hop communications for wireless devices. Essentially, when a wireless device receives or transmits data, it is either the first leg or anchor in a WiFi relay race. The data transfer then hops from one access point to another until it reaches the primary access point, which is connected to the DSL, cable, or fiber gateway. The multi-hop attributes of a mesh network reduce the distance the wireless signal must hop from one point to the next.

Just as important as strengthening the home WiFi signal is the increased control users will have over their home WiFi experience. Eero’s access points and smart home manager app will allow users to control their WiFi networks, passwords, and devices. Control over the home network experience is being fought over by consumer electronics companies and broadband service providers alike.

Tying together the Amazon home experience

Eero adds a major puzzle piece to Amazon’s long-term plan to own the in-home IoT experience. Between Fire Sticks, Fire TVs, Ring video doorbells, Echo devices, and a growing list of appliances and consumer electronics with Alexa voice capabilities, pre-integrated, eero access points can ensure that these devices stay connected all the time.

Early on, eero differentiated itself from other mesh networking suppliers by including 802.15.4 radios on each of its access points. The 802.15.4 is an IEEE standard, designed for low-data rate and low-power consumption wireless communications. It is part of the 802.15 group of standards for what are called wireless personal access networks (WPANs). For example, 802.15.1 is for Bluetooth.

The 802.15.4 standard defines the MAC and PHY layers of the OSI model and provides a basis for other protocols and features to be added in layers 3 through 7. ZigBee, Z-Wave, WeMo, and Thread are common protocol stacks relying on the 802.15.4 standard. The eero devices currently use Thread, but nothing is stopping Amazon from incorporating its favored Z-Wave protocol on these devices. Z-Wave is Amazon’s home automation protocol of choice, as it is used in its Echo Show and Echo Plus home hub devices. Also, a much larger ecosystem of sensors, light bulbs, and other home automation devices relies on Z-Wave.

In fact, I fully expect Amazon to quickly provide eero mesh units using the Z-Wave protocol stack, so that the units could act as distributed home hubs. This would allow users to place smart devices throughout their home, rather than limiting them to areas near a home hub unit. Keep in mind that Z-Wave has a functional distance limit of 300 feet. In larger homes, for which eero access points are ideal, eero can eliminate WiFi dead spots, while also connecting bedroom light bulbs, window sensors, and other Z-Wave devices.

I don’t believe Amazon will integrate an eero-style access point into any of its Echo series of devices, as some have suggested. Amazon wouldn’t have bought eero if that was its strategy. Besides, the Echo devices already pump out their own limited WiFi signal. There is no need to raise its bill of materials (BOM) cost by adding a more complex WiFi chip and series of antenna arrays. After all, the purpose of Echo devices is to provide a voice-based connection to Amazon-hosted services and content, not to become expensive, all-in-one devices.

Eero gives Amazon a way to ensure always-on WiFi connectivity at home. This, in itself, is critical to the performance of Amazon services. More importantly, eero gives Amazon insight into how broadband customers use their home Internet service, which devices they use to access the Internet, and when and how the devices are used. Eero is invasive, for certain. As with any service, users will have to weigh the convenience offered against their privacy concerns.

But you can imagine a scenario where Amazon uses the data collected from eero access points to recommend smart light bulbs, DIY home security systems, window sensors, connected TVs, and other devices based on your data consumption habits and current network setup, among other parameters.

Beyond that, Amazon primarily wants to ensure that the content and services you rely on–including Amazon Video, Music, and Audible–all are performing at their peak. By providing home connectivity, Amazon can also more accurately identify the source of issues delivering 4K UHD video content. Is the problem at home, within the Amazon Web Services CDN, or in the broadband provider’s network? When you don’t own the pipe into the home but own everything else, being able to eliminate your network as the locus of the problem is absolutely critical.

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About the Broadband Access Market Research Report:

The Dell’Oro Group Broadband Access Report provides a complete overview of the Broadband Access market with tables covering manufacturers’ revenue, average selling prices, and port/unit shipments for Cable, DSL, and PON equipment.  Covered equipment includes Converged Cable Access Platforms (CCAP) and Distributed Access Architectures (DAA), Digital Subscriber Line Access Multiplexers ([DSLAMs] by technology ADSL/ADSL2+, G.SHDSL, VDSL, G.FAST), and PON Optical Line Terminals (OLTs), as well as all Cable, DSL, and PON CPE (Customer Premises Equipment.)