Growing interest among operators to use PON technologies to offer enterprise customers an alternative to traditional Ethernet services is increasing 25GS-PON-capable OLT ports being deployed into service provider networks. Because of the increase in total 25GS-ready ports, as well as the consensus that a growing percentage of those ports will be used to deliver enterprise and leased line services, we have increased our forecasts for 25GS-PON equipment revenue (both OLT ports and ONTs).
In our most recent forecast, published in July, we increased cumulative 25GS-PON equipment revenue between 2022 and 2025 from $315M to $588M worldwide, with the majority of revenue coming from the North American and Western European markets. While that increase is significant by itself, it’s important to bear in mind that cumulative XGS-PON equipment spent during that same period will easily push $7.7B. But XGS-PON will be the dominant technology across residential FTTH networks, whereas 25G-PON will be used strategically by operators for high-end residential services, enterprises, campus environments, access network aggregation, and wholesale connections.
Through the end of 1Q23, a total of 550K 25Gbps-Capable OLT ports have been delivered to the market, largely via combo cards and optics that can support 2.5Gbps GPON, XGS-PON, and 25GS-PON from the same hardware and using the same ODN. If we assume that an average of 100-200K 25GS-capable OLT ports are purchased by service providers every quarter, by the end of 2023, there will be >1M 25GS-capable OLT ports. Continuing that incremental increase through 2025 yields over 2 million 25GS-capable OLT ports purchased by service providers. Further, let’s assume that a low single-digit percentage of those total ports are turned up to deliver enterprise services. The potential net result is anywhere from 500k-700k OLT ports in service delivering enterprise, wholesale, and mobile transport services.
That is the relatively modest strategy behind 25GS-PON: To finally expand the applicability of PON technologies beyond residential networks. Though it has been discussed by vendors and operators for years, we are finally seeing that many operators have earmarked PON as a network-flattening technology across their residential, enterprise, mobile transport, and wholesale networks. Though there certainly have been instances of operators using GPON for mobile backhaul and business-class Internet access, those use cases have been relatively limited. The combination of XGS-PON and 25GS-PON is really the first to give operators the flexibility they require to be able to address many customers and applications across the shared infrastructure. While some operators envision sharing an ODN across these use cases, others prefer to separate their ODNs because of concerns around security and significantly different SLAs. Nevertheless, PON technologies beyond XGS-PON are already central components of a larger discussion around simplifying access and edge network connectivity.
Though the ITU has determined that single channel 50G PON as defined in its G.hsp.50pmd specification is the next generation technology it will move forward with, the increasing use cases for PON combined with those use case requirements for additional speeds beyond what XGS-PON can provide have opened the door for 25GS PON as a potentially important tool in operators’ toolboxes. The current strength in fiber buildouts and the need to address new use cases today has resulted in a list of operators who simply can’t wait for 50G PON to be fully standardized, tested, and productized. As such, other industry standards group, including the Broadband Forum, are working with 25GS-PON and looking at developing testing and interoperability standards for the technology.
While standards bodies have traditionally defined which technologies get adopted and when there are certainly cases where operators have placed their thumbs on the scales in favor of a preferred option. These choices don’t generally go against what the standards bodies recommend or are working towards. Instead, they satisfy a more immediate internal requirement that doesn’t mesh with the proposed standardization, certification, and product availability timeline defined by the standards bodies and participating equipment suppliers.
Larger operators, including AT&T, BT Openreach, Comcast, and Deutsche Telekom, have also become far more comfortable over the last few years defining standards and pushing them through other industry organizations, such as ONF and the Broadband Forum. These operators know they have the scale, market potential, and, most importantly, internal technology and product development engineering teams to drive standards and thereby influence the product roadmaps of their incumbent equipment suppliers.
And that’s what appears to be happening with 25GS-PON. The growing list of service providers taking part in the 25GS-PON MSA has a general consensus around their PON technology choices: Use GPON and XGS-PON today for the bulk of your residential FTTH deployments, and then add in 25GS-PON using the same equipment and ODN where it makes strategic sense.
This strategy is no different from other access technology strategies and deployment models seen in the past. From ADSL to ADSL2+, VDSL to G.fast, and GPON to XGS-PON, broadband access networks are in a constant state of upgrade. It just so happens that they are now being extended to support other use cases and other end customers. The PON market, as well, has always been one offering different technology options to suit each operator’s unique use case requirements and competitive dynamics. That flexibility is proving to be particularly beneficial in today’s hypercompetitive broadband environment, in which each operator might have a different starting point when it comes to fiber deployments, but likely has similar goals when it comes to subscriber acquisition and revenue generation. In this environment, many operators have clearly said that they simply can’t wait on a promising technology when they need to establish their market presence today. And so, the vendor ecosystem has responded again with options that can steer them down a path to success.
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As analysts, we are increasingly asked to speculate on how Artificial Intelligence will impact various segments of enterprise and service provider networks. My colleague, Stefan Pongratz, began our collective responses to these requests with anexcellent piece on how AI will impact mobile RAN investments.
For my piece on how AI will impact broadband networks, I thought I would start by posing the question to ChatGPT, the generative AI platform, to see what it would suggest as AI’s impact on broadband networks and services. My specific query was “How will artificial intelligence impact broadband networks and services?” Here are the verbatim results:
Artificial Intelligence (AI) is poised to have a significant impact on broadband networks and services in several ways. Some of the key impacts include:
Network Optimization: AI can be used to optimize the performance of broadband networks by analyzing data in real-time and making adjustments to network configurations. This can lead to better utilization of network resources, reduced congestion, and improved overall network efficiency.
Predictive Maintenance: AI-powered analytics can help predict potential network failures or issues before they happen. By analyzing data from various network components, AI can identify patterns that indicate impending problems, allowing for proactive maintenance and reducing downtime.
Enhanced Customer Service: AI can be employed in customer service applications to provide personalized support, answer customer queries, and troubleshoot common issues. AI chatbots can handle a significant portion of customer interactions, improving response times and overall customer satisfaction.
Quality of Service (QoS) Improvement: AI can monitor network performance and prioritize certain types of traffic based on user demands. This can ensure that critical services, such as video conferencing or online gaming receive higher priority and a better quality of service.
Network Security: AI can play a crucial role in identifying and mitigating cybersecurity threats on broadband networks. By analyzing vast amounts of network data, AI can detect unusual patterns, potential attacks, and vulnerabilities, helping to enhance network security.
Network Traffic Management: AI can optimize network traffic routing, especially in scenarios with dynamic traffic patterns. It can analyze real-time data to redirect traffic through the most efficient paths, reducing latency and improving user experience.
Content Optimization: AI can analyze user behavior and preferences to personalize content delivery. By understanding individual preferences, AI can recommend content, advertisements, and services that are more likely to resonate with specific users.
Network Planning and Expansion: AI can assist in planning and expanding broadband networks by analyzing demographic and usage data. This can help service providers determine where to invest in network infrastructure, ensuring that resources are allocated efficiently.
Resource Allocation: AI can help allocate network resources based on demand and usage patterns, dynamically adjusting bandwidth to accommodate peak periods and preventing network congestion.
Network Virtualization: AI can be utilized in software-defined networking (SDN) and network function virtualization (NFV) to optimize the allocation of virtual resources, making networks more flexible, scalable, and cost-effective.
While AI offers numerous benefits to broadband networks and services, it also presents challenges, such as ensuring data privacy, addressing ethical concerns, and maintaining transparency in decision-making algorithms. As AI continues to evolve, its impact on broadband networks and services is likely to become even more profound.
This might be dangerous to say, but I couldn’t have said it any better myself. All of the network impacts ChatGPT identified are definitely aligned with what we hear from broadband service providers around the world. This is especially true when it comes to proactive network and infrastructure management.
We are already seeing a small, but growing list of operators using machine learning tools as a first step in improving the overall reliability of their broadband access networks. Comprehensive, active monitoring of fiber broadband networks and optical assets has generally been reserved for long-haul and metro Ethernet networks. But for broadband access networks, fiber monitoring has generally been limited to identifying physical fiber cuts or bends and then rolling a truck so a technician can use a handheld OTDR or PON power meter to determine the location of the physical issues. Broadband network operators have always struggled with balancing cost and reliability, which is why they have typically relied on reactive toolsets as opposed to proactive ones.
But with the increased investment levels and long-term strategic significance of fiber broadband networks for both enterprise and residential applications, service providers are increasingly introducing machine learning and AI platforms to help them anticipate and correct network issues before they are impactful. Self-healing broadband networks are the goal.
Beyond ChatGPT’s fairly astute responses, there are also other impacts that AI will have on broadband network spending and services:
AI will Result in Additional Subsidies to Expand Broadband Accessibility and Affordability
COVID-19 was the first of a two-part wave of governments understanding the need for their citizens to have access to broadband and, in many cases, subsidizing the expansion of broadband networks to reach previously unserved locations as well as subsidizing the affordability of those services to learn, work, and engage in commerce from home.
AI—particularly generative AI—is the second part of that wave that will keep governments investing in the broadband networks and services of the future. Somewhat lost amidst all the speculation of how transformative generative AI will be to GDP, as well as how individuals even interact with the Internet and each other, is the fact that no government and no service provider, for that matter, wants to be known as the entity that left its citizens or its subscribers behind.
Therefore, we expect legislators in many countries will push for additional investments to be made to expand the availability and affordability of broadband services. Along those lines, AI tools will prove very useful in the critical task of mapping and identifying locations and communities that lack necessary broadband speeds. In the US, for example, AI tools are being used throughout the BEAD (Broadband Equity Access and Deployment) process to get the most accurate determination of broadband availability at the census block level to start. Ultimately, these datasets can be further parsed so that availability and performance can be determined at a per-street level. The goal, of course, is to ensure that the capital is used as efficiently as possible to eliminate broadband deserts. But AI tools will eventually help governments and service providers determine where their speeds and service levels might not be evolving quickly enough to support the needs of their communities and ensure that a broadband divide doesn’t become an AI divide.
The combination of AI and the Metaverse will Drive Increasing Traffic Requirements
The metaverse is often cited as a reason why service providers need to deploy fiber networks despite today’s applications and content generally not taxing those connections. Though the metaverse will ultimately have an impact on broadband service requirements in both enterprise and residential networks, it is the combination of generative AI and the metaverse that will really be a catalyst for speed growth and continued latency and reliability improvements.
In gaming, VR, and AR applications, the combination of generative AI and the metaverse will dramatically improve how users interact with their environments. The ability to use natural language to create new worlds or to navigate those worlds while also being able to request statistics about those environments in real-time will result in a whole new universe of content creators, and game and application designers. Their ability to successfully create and interact with their 3D and immersive environments will depend largely on their connectivity.
Obviously, the data centers running the real-time engines powering these immersive environments will experience the biggest demand. But there is expected to be some distribution of processing at the device level and at the edge of networks, which means that broadband capacity and throughput will also have to scale up based on users’ requirements.
The impact of using natural language to search, shop, and interact online, as well as to control in-home or in-building IoT sensors, for example, will have a significant impact on overall traffic growth. Where online searches used to be fairly-static requests for particular URLs, using natural language to make similar requests, while a convenience for users, requires significantly more language model processing and broadband connections that can support high downstream and upstream speeds.
And it goes without saying that securing these interactions will be critical, which will also introduce additional bandwidth requirements as well as SLAs and service tiers that match subscribers’ levels of risk tolerance.
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The US broadband market has certainly become the most dynamic in the world. For decades, cable operators dominated net new subscriber growth, added millions of new homes passed annually, and compiled a dominant position in the market with a penetration rate of 65% or more. Even during the pandemic, cable operators saw their net subscriber additions per quarter accelerate, as they were able to poach dissatisfied DSL customers and attract first-time subscribers with the help of the FCC’s Affordable Connectivity Program.
But just as cable operators had reached their peak of subscriber growth, the rapid expansion of 5G-based fixed wireless access services put an end to cable’s quarterly gains. Now, the largest US cable operators are dealing with flat to modest net subscriber growth on a quarterly basis, with some quarters showing net subscriber declines. As a result, cable operator CEOs have started to change their tune slightly, moving away from calling fixed wireless an “inferior technology” to acknowledging its impact in creating a “high churn environment.”
But cable operator executives still continue to downplay the long-term impact that 5G FWA will have on their addressable share of broadband subscribers. They will claim that the pull-forward of broadband net subscriber additions during the pandemic combined with the general slowdown in new housing starts and moves—the typical drivers of subscriber growth—is the reason for the poor quarterly performance in new subscriber additions. They will continue to argue that 5G fixed wireless just doesn’t measure up to current DOCSIS service tiers—let alone any of the upgrades they are making through their mid- and high-split activities.
And yet both T-Mobile and Verizon continue to add FWA subscribers (both residential and small business) at a furious clip, with T-Mobile emphasizing that 51% of its fixed wireless customers come from cable operators. Verizon just announced the net addition of 384K FWA subscribers in 2Q23, pushing the company’s total subscriber base to 2.26M. Consumer FWA additions were 251K, while business additions were 133K. T-Mobile is expected to post even stronger subscriber gains in the second quarter, even as its FWA subscriber base in 1Q23 reached 3.2M through a net increase of 523K subscribers.
T-Mobile has a stated goal of serving 7-8 million subscribers by the end of 2025, while Verizon has a goal of serving between 4-5 million subscribers by the end of 2025. Collectively, that’s a potential subscriber base of anywhere from 11-13M subscribers. Those numbers don’t include the entry of AT&T in the 5G FWA market via its Internet Air service, which could net anywhere from 1.5-2M subscribers by the end of 2025, according to our estimates. Unlike T-Mobile and Verizon, which are offering their FWA services nationwide, AT&T’s service is aimed at retaining current DSL customers who are located in areas that will not be offered a fiber alternative as part of the company’s 30M-location fiber buildout. According to our estimates, that leaves an addressable market of approximately 13-15M locations. Though our take rate estimates are relatively low for the service, it is possible that AT&T could expand the reach of Internet Air if the service shows early signs of success at securing new subscribers and keeping churn rates low.
In total by 2025, the three major mobile operators could have a combined FWA subscriber base of nearly 15M, with a good percentage of those having shifted over from cable. And this only represents the potential subscriber drain caused by FWA. By 2025, fiber overbuilders will have dramatically increased their footprint with a product that is certainly going to have better take rates than any flavor of DSL offered over the last two decades. Suddenly, that 65% share of broadband subscribers in the US looks like it is poised to potentially drop well below 60% by 2025.
Cable operators will point to capacity issues as a major impediment to further FWA growth beyond the stated subscriber goals. But with the operators ready to unleash more C-band spectrum and likely to use that spectrum to harvest additional FWA subscribers, the short-term pain for cable operators doesn’t look like it is going to disappear.
And let’s not forget that if capacity does become an issue in certain markets, then both AT&T and Verizon can offer fiber as an alternative to ensure they don’t lose subscribers. From this perspective, T-Mobile is a bit of a wildcard. However, we believe T-Mobile will advance a strategy of partnering with open-access fiber network providers to offer a residential fiber service in markets where FWA capacity might be constrained.
Weathering the Storm
Cable operators aren’t standing still, of course. They are increasing the bandwidth and mix of service tiers through a combination of band splits and spectrum improvements in their access networks. They are improving the reliability and signal quality of their networks through DAA deployments. Compared with fiber overbuilds, these are relatively inexpensive upgrades that will pay dividends down the road.
But in the short term, the two most important tools cable operators have to combat subscriber churn are price-competitive fixed-mobile bundles and RDOF- and BEAD-subsidized rural and edge-out projects. The subsidized projects, which major cable operators like Charter have already used to expand their homes passed footprint and will continue to use through 2025, will be a major source of annual homes passed, especially in a market where new home construction through the first half of 2023 remains lower than in 2022. These subsidized buildouts are in markets that are expected to have very high penetration rates and a guaranteed return on investment. Additionally, while the number of passings for the subsidized buildouts is well-defined, there are likely to be thousands of what are known as “synergy passings,” where locations outside the subsidized census blocks can also be addressed and captured.
On the fixed-mobile bundle side, the large cable operators have consistently added a disproportionate share of new mobile subscribers over the last few quarters and are also seeing the penetration rates among their broadband subscriber base increase. This mobile growth certainly provides a counter to FWA growth. But all things being equal, the major cable operators would rather have those broadband subscribers back.
The push and pull of subscribers isn’t expected to slow down anytime soon. Certainly, with inflation continuing to put pressure on household budgets, consumers are going to be focused on keeping their communications costs low and looking for value wherever they can find it. That means we are returning to an environment where subscribers take advantage of introductory pricing on services only to switch providers to extend that introductory pricing once the initial offer expires. That shifting and its expected downward pressure on residential ARPU will likely be countered by increasing ARPUs at some providers as they move existing DSL customers to fiber or, in the case of cable operators, move customers to multi-gigabit tiers.
The US broadband market is definitely in for a wild ride over the next few years as the competitive landscape changes across many markets. The net result is certain to be shifts in market share and ebbs and flows in net subscriber additions depending on consumer sentiment. One thing that will remain constant is that value and reliability will remain key components of any subscription decision. The providers that deliver on that consistently will ultimately be the winners.
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In our second blog on 5G Advanced, we outline the paths to 5G, and ultimately to 5G Advanced, regarding the 5G Core. We summarize the added functionality and refinements of the 5G Core in Releases 18 and 19 of the 3GPP standards. Finally, we review some of the implications and expected trends that 5G Advanced will enable. The heart of new monetization opportunities for Mobile Network Operators (MNOs) resides in the capability of the 5G Core to allow new use cases, some of which may still need to be imagined.
The Path to 5G Standalone (5G SA)
As shown in Figure 1, the path from 4G to 5G can take several routes—from the simplest to the most challenging implementation—including:
Dynamic Spectrum Sharing (DSS)—allowing 5G to run on 4G radio access networks (RAN)
5G Non-Standalone (NSA)—allowing Dual Connectivity (DC) between 4G eNB radios and 5G New Radios (NR); NSA utilizes the 4G Evolved Packet Core (EPC)
5G Standalone (SA)—which utilizes only 5G components
The 5G SA network essential components include:
5G NRs in a single configuration with or without Carrier Aggregation (CA)
5G NRs in a DC configuration
5G Core
Worldwide, 786 Mobile Network Operators (MNOs) have launched public 4G SA eMBB services, and about 200 of these have commercially deployed 5G NSA eMMB services (Source: GSA, April 2023). As of June 2023, Dell'Oro Group counts 43 MNOs implementing 5G SA eMMB networks (Figure 2).
5G Core
5G SA is the most challenging path for migrating to 5G. To walk this path, MNOs must transform their legacy LTE networks with EPC—which may have Physical Network Functions (PNFs) or Virtual Network Functions (VNFs) with a reference point architecture—to 5G SA networks with the 5G Core. The 5G Core embodies a modern cloud Service Based Architecture (SBA) with container-based Cloud-Native Network Functions (CNFs) that can operate on virtual or bare metal servers (Figure 3).
To take advantage of the promise of 5G, MNOs and Enterprises must deploy 5G SA, with its modern 5G Core cloud architecture, so they can enable new services and use cases that are not necessarily available in 4G and 5G NSA networks. There are two primary requirements needed to facilitate new enterprise use cases: networks that are (1) private and, at the same time, (2) deterministic with low latency.
Figure 4 illustrates how MNOs can meet the needs of enterprises with Mobile Private Networks (MPNs) with the 5G SA network architecture.The lowest cost 5G MPN for an on-premises enterprise network is via an MNO-provided 5G Dedicated MPN (a.k.a., Public Network Integrated NPN (PNI-NPN)) with an MNO partner. A unique Data Network Name (DNN) for the on-premises RAN ensures network privacy. An on-premises Multi-Access Edge Computing (MEC) node, which includes the compute and storage for the enterprise use cases, provides low latency and data sovereignty. For enterprises that require off-campus geographic coverage, the 5G Shared MPN (a.k.a., PNI-NPN) offered by an MNO can meet the requirement for a private connection via the Network Slicing Selection Function (NSSF) for the RAN and Public MEC node.
Over 10,000 MNO-provided MPNs have been implemented in China for various enterprises and institutions, with very few MNO-provided MPNs implemented outside China. Thanks to the broad implementation of Public Multi-Access Edge Computing (MEC) nodes by China's MNOs, enterprises with geographic coverage requirements can now run low-latency applications for real-time and near real-time communications via the MNO-provided 5G Shared MPN. In addition, many Chines enterprises worked with China's MNOs, placing Private MEC nodes on-premises at their physical locations; this enabled low-latency applications on campus via an MNO-provided 5G Dedicated MPN. In China, over 50 industries have now implemented low-latency applications in an MNO-provided 5G MPN environment.
In addition, over 800 enterprises in China have multiple campuses with 5G connectivity. Therefore, they leverage the 5G Wide Area Network (WAN), which enables high throughput Virtual Private Networks (VPNs) operating through the MPN intranet (MPN-VPN). Conventional VPNs must be routed through third-party servers to connect to the Internet; this lowers the downlink speeds and adds latency to the connection. In contrast, the downlink rate of MPN-VPNs is three times higher, and MPN-VPNs also have a 50% lower latency advantage for content traveling within the MNO's intranet. The 5G Core offers the important advantage of enabling the 5G WAN with a mesh architecture of the distributed User Plane Functions (UPFs).
The most straightforward way to meet the requirements for high throughput and low latency is for enterprises to build and operate 5G Standalone MPNs (a.k.a., Standalone Non-Public Networks (SNPN)). But, building and operating 5G SA MPN requires more capex and management know-how than an MNO-provided 5G MPN. For enterprises that lack the management know-how, outsourcing the construction and operation of their networks will increase their costs (Figure 5).According to GSA's May 2023 Private Mobile Networks report, there are 275 Enterprise-owned 5G MPNs worldwide, and 230 Enterprise-owned 4G + 5G MPNs worldwide, totaling 505 Enterprise-owned 5G MPNs. However, most of these are Proof-of-Concept (PoC) or field trials. They are located primarily outside of China.
The rollout of 5G SA networks has been slow. 5G NSA and 5G SA were both standardized in 2018. In 2019, 5G NSA networks began rolling out, followed by 5G SA networks in 2020. As noted, there are over 200 5G NSA networks today, and just over 40 5G SA networks. Except for the MNOs in China, Shared and Dedicated MPNs by MNOs that include the new 5G features, like network slicing and MEC, have been slower to roll out. Also, enterprises’ 5G Standalone MPNs have yet to progress to the volumes as predicted several years ago. Indeed, the industry seems to be stuck in limbo, with enterprises repeating the same two- and three-year Proof of Concepts (PoC) for many of their applications. In other words, we have not yet seen the coming to fruition of:
Industry forecasts of data growth are almost exponential, with no end in sight, driven by video. On the consumer side, streaming video and cloud gaming will be the drivers, and on the business side, applications enabled with Computer Vision will drive growth. Computer Vision is considered a "killer application" use case enabler, because of the many capabilities it has when coupled with the right AI/ML data analytics. Figure 6 lists top industrial use cases enabled by Computer Vision high-performance Artificial Intelligence of Things (AIoT) devices.
Eventually PoCs and trials will be completed, and Enterprises will start implementing these solutions. Some argue that 2023 will be a breakthrough year, during which more MNOs will launch 5G SA eMMB networks.
5G Advanced
Looking ahead to what comes next? 5G Advanced will emerge on the horizon, and it will enable vital new applications for the 5G Core. The 3GPP standards body defines 5G Advanced as Releases 18 and 19. No 3GPP specification will be 100% correct at inception. As lab, PoC, and field trials occur, the industry learns which refinements are necessary, and specifications are updated accordingly. Below is a list of advancements and new capabilities that are being defined and developed for Release 18 per 3GPP:
XR (Extended Reality) and media services
Edge Computing Phase 2
System Support for AI/ML-based Services
Enablers for Network Automation for 5G Phase 3
Enhanced support of Non-Public Networks Phase 2
Network Slicing Phase 3
5GC Location Services Phase 3
5G multicast-broadcast services Phase 2
Satellite access Phase 2
5G System with Satellite Backhaul
5G Timing Resiliency and Time Sensitive Communications (TSC) and URLLC enhancements
Extensions to the TSC Framework to support Deterministic Networking (DetNet)
Evolution of IMS multimedia telephony service to SBA
Personal IoT Networks
Access Traffic Steering, Switching, and Splitting (ATSSS) support in the 5G system architecture Phase 3
Proximity-based Services (ProSe) in 5GS Phase 2
User Plane Function (UPF) enhancements for Exposure and SBA
Generic group management, exposure, and communication enhancements
5G UE Policy Phase 2
Uncrewed Aerial System (UAS), Uncrewed Aerial Vehicle (UAV), and Urban Air Mobility (UAM) Phase 2
System Enabler for Service Function Chaining
Seamless UE context recovery
Multimedia Priority Service (MPS) when access to EPC/5GC is WLAN
3GPP's latest release is Release 18.1. The process will take us to the end of 2023 before Release 18 is frozen. Thus, we expect that more refinements and updates to the standards specifications included in Release 18 will be forthcoming.
Per 3GPP, early Release 19 studies include:
Network of Service Robots with Ambient Intelligence
Energy Efficiency as service criteria
Upper layer traffic steering, switching, and split over dual 3GPP access
Uncrewed Aerial Vehicles (Phase 3)
Satellite Access (Phase 3)
Roaming value added services
AI/ML Model Transfer (Phase 2)
Integrated Sensing and Communication
Ambient power-enabled Internet of Things
Localized Mobile Metaverse Services
Network Sharing Aspects
Future Railway Mobile Communication Systems (Phase 5)
Supporting Railway Smart Station Services
3GPP will publish the explicit content of Release 19 in September 2023.
What trends can we foresee? While nobody's crystal ball is perfect, some trends that we anticipate, other than the Computer Vision AI/ML discussed above, include:
Spatial Vision Technology
Spatial Vision Technology (a.k.a. naked-eye 3D) has caught the public's attention on massive new digital 3D billboards worldwide, like one in New York City, shown in Figure 7. Spatial Vision Technology provides an immersive 3D experience with the naked eye without needing VR glasses.
This concept has been around for almost a decade without achieving much commercial success. Still, with the advent of 5G and its high data throughput and low latency capability, new players are emerging to move this technology to the smartphone. It has already begun to emerge on laptop PCs, with the launch of two new laptops with 3D OLED screens from ASUS at CES 2023 in Las Vegas. These ASUS laptops may be the first to introduce naked-eye 3D on an OLED screen versus on an LED screen. Regarding a format that comes closer to a smartphone form factor, ZTE introduced a tablet with a 3D screen at MWC Barcelona 2023.
With any new display technology, such as HD, 4K, and 8K, generating new content can become a problem. In 2022, Huawei launched technology to convert 2D content to naked-eye 3D content, thus creating the required 3D content.
As naked-eye 3D technology takes off, processing that migrates network traffic from terminal rendering to cloud rendering will increase 3-fold to 10-fold.
IMS Core SBA
Integrating the IMS Core into the 5G Core SBA will upgrade voice and video calling with new immersive capabilities, like Spatial Vision Technology. The IMS Core SBA introduces Data Channel Media Function (DCMT) and Multimedia Resource Function (MRF). Applications envisioned are real-time voice translations from one language to another (as Hollywood depicted in the Star Trek TV series with the "communicator" in the 1960s); visualized voice calling; and intelligent processing of media. The intelligent processing of media, such as audio streams and video streams during calls, means that new calls can realize the functions of changing backgrounds and avatars, and audio streams can be converted into subtitles. These new functions, once added to the IMS Core, will enable a much richer user experience with three-channel communication capability (audio, voice, interaction) and native AI real-time media processing.
IoT enhancements
Though Reduced Capacity (RedCap) radios are not a 5G Core technology per se, they will reduce the cost and complexity of implementing IoT devices in a 5G SA network, thus enabling more use cases that the 5G Core will have to manage. One example noted in Figure 6 above is Artificial Intelligence of Things (AIoT); enterprises will use more AIoT devices with the introduction of RedCap-enabled AIoT devices.
A Personal IoT Network (PIN) is a configured and managed group of PIN Element(s) (PINE) that can communicate with each other directly, communicate with each other via PIN Element(s) with Gateway Capability (PEGC), or use a PEGC to communicate with devices or servers that are outside the PIN via the 5G network. A PIN includes at least one PEGC and is managed by PIN Element(s) with Management Capability (PEMC). The PIN can also have a PIN Application Server with an AF functionality. The PEMC and PEGC communicate with the PIN Application Server at the application layer over the user plane. With these self-managing PINs, PINs will move the industry toward the Massive Internet of Things (MIoT) (Figure 8).
Integrated Sensing and Communications (ISAC) will enable ubiquitous IoT. New sensing capabilities beyond today's position sensing capability will be improved in 5G Advanced and will be further refined in 6G. Figure 9 categorizes use cases into four functional categories across different applications/industries.
High-accuracy localization and tracking
Simultaneous imaging, mapping, and localization
Augmented human sensing
Gesture and activity recognition
Optimized UPFs
As 5G LANS are implemented, and different use cases are implemented within the same 5G LAN, the necessity for optimized UPFs arises. For Spatial Vision Technology and XR communications, a high-performance UPF will be required for a 10-fold increase in network traffic. For URLLC applications like Time Sensitive Networking (TSN), a special UPF will be necessary to handle higher concurrency connections and reliable and redundant backup without downtime. In addition, optimized UPFs are required for both media applications and MPN-VPNs.
Artificial Intelligence/Machine Learning (AI/ML) Data Analytics
AI/ML are the engines behind the Data Analytics required to automate real-time and near real-time decision-making based on raw data from IoT sensors and devices. In the case of the 5G Core, the data will be generated by events coming from all of the network functions of Network Analytics provided by the Network Data Analytics Function (NWDAF). The sheer volume of data that may need to be analyzed—on the scale of petabytes—could never be handled manually. MNOs will need to adopt a mix of analytic approaches for consumer and industrial enterprise use cases based on data types, workloads, and the business problems that users are trying to solve. There are three categories of Analytics:
Descriptive Analytics answers questions about what happened in the past
Diagnostic Analytics offers insights into why those events happened
Real-time Analytics (On-demand Analytics or Streaming Analytics) includes:
Predictive Analytics analyzes current and historical data to provide insights into what might happen in the future
Prescriptive Analytics suggests actions an organization could take based on those predictions
Cognitive Analytics automates or augments human decisions
Examples of which use cases employ which kind of analytics include: 5G Network Analytics via MWDAF using Predictive Analytics, and Digital Twin modeling using Prescriptive Analytics.
Generative AI
Generative AI refers to a category of artificial intelligence (AI) algorithms that generate new outputs based on the data on which they have been trained. Unlike traditional AI systems that are designed to recognize patterns and make predictions, generative AI creates new content in the form of images, text, audio, and more.
Generative AI uses a type of deep learning called generative adversarial networks (GANs) to create new content. A GAN consists of two neural networks: a generator that creates new data and a discriminator that evaluates the data. The generator and discriminator work together, with the generator improving its outputs based on the feedback it receives from the discriminator until it generates content that is indistinguishable from real data.
Generative AI has a wide range of applications, including:
Images: Generative AI can create new images based on existing ones, such as creating a new portrait based on a person’s face or a new landscape based on existing scenery
Text: Generative AI can be used to write news articles, poetry, and even scripts; it can also be used to translate text from one language to another
Audio: Generative AI can generate new music tracks, sound effects, and even voice acting
This section on generative AI was created using a language model AI trained by OpenAI. The AI was trained on a large dataset of text and was able to generate a new article based on the prompt given. In simple terms, the AI was fed information about what to write about and then generated the article based on that information.
Generative AI is a powerful tool that has the potential to revolutionize several industries. With its ability to create new content based on existing data, generative AI has the potential to change the way we create and consume content in the future
Whether it is creating new content with AI/ML or analyzing data with AI/ML, more compute power will be required, and if this compute power must meet certain latency requirements, AI/ML could drive up the demand for more edge computing or MEC.
Summary
While some believe that 5G SA and, subsequently, the 5G Core market and its associated applications, are developing slowly, we should remind ourselves that it is only the beginning of year 4 of a typical 10-year journey for a specific standard like 3G and 4G. 5G will have a journey similar to that experienced by 3G and 4G; namely, it will take about ten years before moving on to 6G. Because of the revolutionary move to a cloud-native service-based architecture, it may take a little longer for 5G to achieve the momentum that many anticipate. The good news is that 5G works. The lab, PoC, and field trials may take a little longer due to the nature of the technology and new use cases, but the technology is there. The 3GPP standards body has had a great vision, but it will take some time to bring it to commercial reality.
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Driven largely by the renewed focus on fixed broadband networks and services, industry standards bodies and their members are increasingly defining fixed network evolutions with cadences similar to those found in the world of mobile networks. Designed initially to enhance the benefits that 5G is bringing to mobile networks worldwide, these overarching frameworks of technology requirements, use cases, and implementation guidelines are intended to give service providers a blueprint for network evolutions that both complement mobile network evolutions while also enabling new capabilities for fixed broadband networks.
ETSI is the primary organization defining these frameworks through its Fifth Generation Fixed Network (F5G) working group. Prior to its establishment in 2020, there really was no coordinated effort among various standards organizations to define standards and goals for fixed networks. In the mobile world, the ITU, 3GPP, and GSMA have historically cooperated and delivered the standards for each new technology evolution. But on the fixed networks side, separate standards from the ITU, IEEE, ETSI, Broadband Forum (BBF), and the Optical Internetworking Forum (OIF) have resulted in a disjointed evolutionary path.
From ETSI’s perspective, harmonizing standards and evolutionary requirements across fixed networks is the best way to ensure networks that both complement and enhance mobile network evolutions. The utility of these frameworks in mobile networks is clear. But in fixed networks, the relevance is less clear, especially since fixed networks encompass everything from core transport networks to in-home connectivity. Coordination in mobile networks is essential while in fixed networks it isn’t necessarily a requirement. This is due to the simple fact that in mobile networks, spectrum availability defines the technology. In fixed networks, technology determines spectrum availability- and there are many ways to deliver that spectrum in the form of optical wavelengths, RF spectrum, etc.
Nevertheless, there is certainly value in laying out an umbrella framework of technical requirements, applications, and use cases that will underpin fixed network upgrades that complement mobile network evolutionary steps. And certainly, there is value in applying the framework’s principles to the emerging F5G networks of today to the anticipated F5G Advanced networks of tomorrow.
Defining F5G
Back in 2019, 10 companies jointly launched the F5G working group, which was approved by ETSI at the end of the year. To help define the Fifth Generation Fixed Network, it was important to clarify the previous four generations and their underlying technologies—similar to how Wi-Fi generations were recently re-named.
First Front Fixed Network Generations
Generation
Broadband Technology
Speed
F1G
PSTN/ISDN
64 Kbps
F2G
ADSL
10 Mbps
F3G
VDSL
30-200 Mbps
F4G
GPON/EPON
100-500 Mbps
The group also set out to define the characteristics of the Fifth Generation, which is the network most operators are currently building today. The three primary technical pillars of F5G were:
Full-Fiber connections (FFC) to every residence, business, room, and desktop, along with an expansion of fiber-based connections and density by 10x.
Enhanced Fixed Broadband (eFBB) to deliver symmetric, gigabit speeds to residential locations and 10 Gbps speeds to businesses.
Guaranteed Reliable Experience (GRE), defined by delivering minimal packet loss, a 10x reduction in latency, microsecond delays, and 99.999% reliability across the network and to every endpoint.
The coordinated evolution of in-home and in-building networks, the fixed access network, and transport networks is intended to provide enough bandwidth and Quality of Service to better accommodate today’s use cases, including online gaming, education, E-health, and the continued reliance on cloud applications in enterprise environments. Additionally, the goal is to be able to support forthcoming, high-bandwidth applications, including cloud-based VR and AR, as well as uncompressed 4k and 8k video. Finally, delivering a sustainable network built on passive fiber connections and active electronics that consume less energy and reduce network operators’ carbon footprints is a key tenet of the F5G framework.
Operators globally are certainly expanding their gigabit-capable fiber networks, with combined XG-PON and XGS-PON OLT port shipments jumping from 2.2 M in 2020 to 8.7 M in 2022. In part due to the supply chain issues that have plagued consumer electronics over the last two years, total residential subscribers connected to these speeds remain well behind the available infrastructure. Additionally, the current high interest rate environment has dampened consumers’ appetites for higher-cost, premium broadband connections in many Western markets. Nevertheless, operators continue to invest in 10G infrastructure as they continue to pass more homes and businesses.
Certainly, bandwidth consumption patterns aren’t going to change and will remain on their steady upward trajectory based on an annual CAGR of 35-40%.
Enter F5G Advanced
Because of this consistent growth in bandwidth consumption and because F5G was never envisioned as being the ideal end state of fixed networks, members of the F5G Working Group have proposed F5G Advanced as the next evolutionary step, ultimately leading to an F6G framework, following their colleagues on the mobile side who have proposed 5G Advanced to help 5G evolve to deliver a more robust set of capabilities. At its heart, F5G Advanced aims to improve upon the goals established within the F5G framework, with more widespread FFC, including fiber connections to the room and to a wider array of endpoints, faster eFBB through the deployment of 50G PON, and faster GRE through more widespread availability od deterministic bandwidth and latency.
In addition to those enhancements, F5G Advanced focuses on improved energy efficiency with a heavy focus on optical access networks and ONUs, in particular, which consume by far the most energy in aggregate.
Tightly coupled with reducing energy consumption is adding significantly more network intelligence through AI and machine learning. AI is envisioned as both a means to improve the operation of the network as well as a service that can be provided to customers. For service providers, the use of AI and machine learning has very practical use cases, including allowing them to:
Support automatic network planning and capacity upgrades by modeling how the addition of services and capacity will impact current and future network requirements as well as the need to add switching and routing capacity to support application delivery
Implement network changes automatically, reducing the need for manual intervention and thereby reducing the possibility of errors.
Constantly provide detailed network monitoring at all layers and provide proactive fault location, detection, and resolution while limiting manual intervention.
Simplify the service and application provisioning process by providing a common interface that then translates requests into desired network changes.
Finally, F5G Advanced seeks to make fixed networks more aware so that faults can be anticipated, isolated, and resolved, whether they originate in the home, the access network, or the optical transport network. Also, awareness means allocating bandwidth and setting latency based on applications being used, not just statically delivered to users. This is the concept of experience-oriented SLAs as opposed to the traditional method of service guarantees through bandwidth alone.
Key Technologies
F5G Advanced builds on the underlying technologies of F5G and includes platforms that deliver additional capacity from the transport network all the way to the home and business, are more energy efficient, are autonomous, programmable, and intent-based, are more secure, and can support end-to-end network slicing and deterministic latency.
The key networking technologies of F5G Advanced include:
50G PON
Wi-Fi 7
800G Optical Transport Networks
The use of 50G PON, which introduces Digital Signal Processors (DSPs), is key to the overall architecture because it is viewed as a convergence technology for residential, business, and wholesale fiber networks onto a single ODN. Mobile midhaul and fronthaul applications, expanding IoT devices and services, wholesale fiber access to microcells, aggregation of Wi-Fi7 traffic in a business campus environment—all of these can, in theory, be delivered using 50G PON. Other applications and use cases are certain to emerge as operators continue to reap the benefits of converting their disparate networks onto a shared ODN, with throughput and services delivered via 50G PON.
F5G-Advanced’s Impact on the Market
It’s difficult to assess what—if any—impact F5G Advanced will have on global equipment markets. Service provider networks differ significantly, as do their competitive landscapes, which often dictate the adoption of broadband access and in-home Wi-Fi technologies. Though operators are certainly moving in the direction of all of these technologies—and have signaled their planned adoption and deployment of these technologies within the next few years, they are likely to do so at different intervals that are distinct and based on individual market dynamics.
Two technology components of F5G Advanced that will certainly see global adoption by operators are Wi-Fi 7 and 50G PON. Already, a growing list of operators has submitted RFPs for new residential and business CPE with Wi-Fi 7 support. The combination of an increase to 320 MHz of spectrum, 4096 QAM, and multi-link operation (MLO) is exactly what operators have been looking for in their customer endpoints.
Though early, Dell’Oro Group believes total 50G-PON equipment revenue will increase from less than $3M in 2023 to $1.5B in 2027. Much more significant growth is expected from 2027 on, as operators begin to evolve their 10Gbps PON networks to next-generation technologies.
Beyond being able to anticipate future bandwidth growth coming from consumer applications such as VR, AR, online gaming, videoconferencing, and 8k video, 50G PON positions operators to address business services. Specifically, 50G PON allows a provider to offer four 10G Ethernet connections, split among multiple businesses. Additionally, 50G PON is ideal for POL (Passive Optical LAN) deployments, where fiber can be run to the desktop and deliver connectivity with less power, rack space, and less cooling than traditional point-to-point Ethernet architectures.
Similarly, 50G PON has applications in the backhaul of public Wi-Fi hotspots as well as private wireless LANs, both of which will see significant bandwidth growth with the availability and deployment of Wi-Fi 6E and Wi-Fi 7. Wi-Fi 6E allows individual subscribers to burst to 9.6Gbps while Wi-Fi 7 quadruples that throughput to nearly 40Gbps. Additionally, the Wi-Fi 7 standard defines extremely low levels of latency and jitter, which the evolving 50G PON standard is also incorporating.