Telecommunications Infrastructure Archives - Page 7 of 40

5G has come a long way since the Korean operators launched mobile 5G in early 2019. In the first five years, operators have invested around $0.4 T globally in 5G-related capex, deploying 20 M+ macro and small cell radios. Even so, the results are mixed. From a RAN investment and coverage perspective, 5G has accelerated at a much faster pace than previous mobile technologies. Preliminary findings suggest that 5G already covers around 45% of the global population, according to Ericsson’s Mobility Report. To put things into perspective, LTE reached the same milestone in early 2016. In addition to the reduced gap between the advanced and less advanced markets, the capacity boost realized with the upper mid-band taken together with the proliferation of Massive MIMO is providing a step function reduction in data delivery costs. The SK Telecom 5G/6G white paper focusing on 5G lessons points to a 70% reduction in cost-per-bit relative to LTE. At the same time, 5G has so far been mostly about improving the economics and increasing the data buckets for the existing use cases. However, 5G has so far had limited success in expanding the use cases and reversing the carrier revenue trajectory.

As we look to the next phase of this 5G journey, any incremental technology advancements that can improve spectral efficiencies will be valuable in a world where spectrum is limited and both humans and machines consume increasingly greater amounts of data. Additionally, any enhancements that can promote the growth prospects for Enterprise/Private 5G and Cellular IoT (cIoT)—ultimately helping to realize more aspects of the broader 5G vision—will also play an important role in this next phase. The objective of this blog is to provide updates on the 5G Advanced blogs we previously posted and to review the technologies, opportunities, and RAN implications with 5G-Advanced/5.5G.

What is 5G-Advanced?

The 3GPP roadmap is continuously evolving to fulfill the larger 5G vision. In this initial 5G wave that began in 2018, 3GPP has already completed three major releases (new releases every 1.5 to 2 years): 15, 16, and 17.

These initial releases have been key to the success of both MBB and FWA. But there are still shortcomings that need to be addressed, in order to fulfill the broader 5G vision. Current plans for Release 18 and beyond (often referred to as 5G-Advanced or 5.5G) involve gradual technology improvements aimed at elevating 5G to the next level, creating a foundation for more demanding applications and a broader set of use cases. In addition to performance improvements and support for new applications, sustainability and intelligent network automation are also important building blocks in the broader 5G-Advanced vision (Ericsson).

Source: Huawei

Current priorities with 5G-Advanced include:

More capacity and better performance. Some estimates suggest that MIMO enhancements, better beam management, and full duplex technologies taken together with other advancements, including multi-band serving cell (MB-SC) and Extremely Large Antenna Array (ELAA) will deliver another 20% of efficiency improvements relative to today’s 5G. Enhanced uplink (UL) and multi-cell UL improvements could pave the way for greater data rate and latency improvements in the UL. For reference, Huawei defines 5G-Advanced as a site that can support at least 10 Gbps of cell capacity. ZTE is also targeting 10 Gbps+ with 5G-Advanced.

Expanded coverage. In addition to MIMO and IAB coverage enhancements, 5G-Advanced includes Non-Terrestrial Network (NTN) connectivity improvements, building on the NR/LTE-based NTN support that was introduced with Release 17.
More intelligence. Releases 15-17 already include some AI/ML features. 5G-Advanced will offer AI/ML enhancements in the RAN (including the air interface) and the management layers. In addition, Intelligent RAN and AI-powered analytics will help operators to improve the performance and proactively address network issues before they become a problem.
Energy savings. Release 18 includes a confluence of static and dynamic power-saving enhancements for the radios and the overall RAN. Also, the specification is targeting to define a base station energy consumption model with various KPIs to better evaluate transmission and reception consumption/savings.
Flexible spectrum (FD, DSS, CA). NR is currently based on TDD or FDD spectrum. Full duplex (FD), a 5G-Advanced contender, improves spectrum utilization by allowing UL and DL to share the same spectrum (FD should improve capacity and latency, especially in the UL). Release 18 also includes DSS capacity enhancements (increasing PDCCH capacity by allowing NR PDCCH to be transmitted in symbols overlapping with LTE CRS). Other spectrum-related upgrades with 5G-Advanced include multi-carrier enhancements and NR support for dedicated spectrum bandwidths below 5 MHz.
Critical IoT. 5G-Advanced includes multiple industrial and IoT related advancements. Release 17 included support for Time Sensitive Networking (TSN), which will be expanded in 5G-Advanced to support Deterministic Networking (DetNet).
RedCap IoT. NR-Light or Reduced Capability (RedCap) was introduced with 3GPP NR Release 17. 5G-Advanced will introduce lower-tier RedCap devices, seeking to find a better set of tradeoffs between cost, performance, and power consumption.
Ambient IoT. Passive IoT, sometimes referred to as Ambient IoT, will allow devices/objects to connect without a power source.
Sensing. Harmonized communication and sensing (HCS) is a Release 19 study item.
Positioning. Positioning is already supported in Release 16/17, though 5G-Advanced is expected to improve positioning accuracy and power consumption (Nokia has said sub-10 cm positioning is doable). In addition, Release 18 will include support for RedCap devices.

Source: Nokia

Where are the opportunities?

Looking ahead, operators will continue to invest in new RAN technologies and architectures that will allow them to better navigate stable carrier revenue trends and increased network complexities. 5G-Advanced is not the only toolkit. But it will play an important part as the operators incorporate more virtualization, intelligence, and automation into their RAN roadmaps. AI and ML already play a role in current 5G, and they are expected to penetrate further across the RAN stack.

It might not be the most exciting revenue growth opportunity for carriers, but one fundamental aspect of 5G-Advanced will be to support more demanding consumer MBB applications. The days of exponential data traffic growth are clearly in the past; however, global mobile data traffic is still projected to increase threefold over the next five years, reaching 0.5 ZB/month by 2028 (mobile plus FWA). While operators are currently in a fairly good position from a capacity perspective, especially those not aggressively pursuing FWA, some of the technology improvements with 5G-Advanced can help to address capacity limitations in hotspot areas.

Since the base case is built on the assumption that AR/VR will comprise only a small part of total mobile data traffic throughout the forecast period, the successful introduction of a new AR device for the masses could significantly alter the data traffic growth trajectory and corresponding RAN requirements.

With 5G RAN growth now slowing and carrier revenues staying flat, both operators and enterprises appear cautiously optimistic about the industrial focus promised by 5G-Advanced. Private LTE/5G is trending in the right direction, but the market remains small. The slower start is not impacting the long-term growth thesis: proliferating cellular connectivity into enterprises and industrial settings where WiFi or public cellular connectivity is poor remains a massive growth opportunity. Although LTE and 5G NR Releases 15-17 are sufficient to address the majority of existing use cases, 5G-Advanced will provide important IoT and industry-focused enhancements.

Fueled by the vision that 5G has a growing role to play in the Factory of the Future, expectations for 5G and 5G-Advanced in manufacturing are rising. While WiFi and LTE still dominate the smart manufacturing connectivity market, our assessment indicates that 5G RAN revenues to support the manufacturing vertical are on the rise. In fact, manufacturing already accounts for a double-digit share of Huawei’s, Nokia’s, and Ericsson’s ongoing private wireless projects. Huawei recently reported that manufacturing constitutes approximately 40% of its enterprise ToB revenues, and its enterprise 5G RAN revenues experienced rapid growth in 2023

Nonetheless, it is still early days outside of China, and the majority of enterprises are in the exploratory phase when it comes to using 5G-based AGVs, Digital Twin, AR/VR, and quality inspections. The improved reliability, latencies, device costs, positioning accuracy, and UL throughput should all contribute to improving the industrial 5G business case, but as with most enterprise verticals, it will take time.

Another area gaining attention is RedCap, a 5G NR-based cellular IoT technology introduced in Release 17 and further improved in Release 18. RedCap offers “slimmed down” 5G capabilities, targeting mid-tier IoT use cases that require reasonable bandwidth and robust battery life, albeit not the most stringent latency requirements (though still suitable for many applications). Bearing in mind that the industry has been discussing Cellular IoT for decades now, expectations are more tempered this time around

Passive IoT, sometimes referred to as ambient IoT, is also contributing to the renewed interest in Cellular IoT. In addition to the improved economics compared to RFID-based sensors, Passive 5G-Advanced IoT solutions are expected to be advantageous from a power consumption perspective. According to Huawei, some passive IoT devices (C tags) should potentially consume 100 times less power than NB-IoT devices.

What does this mean for the RAN forecast?

After a couple of years of exponential growth, 5G RAN investments are now slowing. Yet, it is still early in the broader 5G cycle, and total 5G NR plus 5G-Advanced RAN revenues are poised for further gains. Although the base case assumes that 5G-Advanced will not trigger another capex cycle, Release 18 and future releases are expected to play pivotal roles in this next chapter of 5G.

Predicated on the assumption that ongoing trials are successful, the ecosystem is in good standing, and the first part of the 5G-Advanced standard will be frozen in early 2024, the first wave of commercial deployments could become a reality by the second half of 2024 and into 2025.

5G-Advanced encompasses a broad array of technology enhancements. Some operators are already planning to upgrade their networks to support 10 Gbps (China Mobile recently announced the completion of 1K 5G-Advanced gNBs using 260 MHz of BW), while others might focus more on the IoT aspect. The majority of 5G base stations deployed in the latter part of the forecast period will incorporate some 3GPP Release 18+ features.

In short, 5G-Advanced is soon ready for prime time, with initial commercial deployments commencing in 2024. There is nothing wrong with a little bit of optimism and thinking big. At the same time, following the mixed results in the first 5G wave and the resulting rise in skepticism about the broader 5G business case, the industry now has an opportunity to recalibrate expectations.

In Dell’Oro Group’s January 2024 update to the Microwave Transmission & Mobile Backhaul Transport Five-Year Forecast report (2023-2028), a mixed outlook emerges. Here are some good news and bad news. Let’s delve into the highlights of these contrasting trends:

Good News

The good news is that the microwave transmission market entered a growth cycle due to the expansive 5G buildouts in 2021 and has enjoyed a steady pace of growth. Furthermore, we expect that there will be at least two more years added to this growth cycle, culminating in five years of market expansion. During this period, the microwave transmission market’s annual revenue will increase 22% and the cumulative revenue for that period will be nearly $17 billion. Other factors contributing to the near-term growth projections include:

Overall demand for more bandwidth by customers is expected to continue for many more years, requiring higher link capacities. As a result, the adoption of E/V Band systems is expected to be much higher, and the number of carriers per cell site is also projected to increase.
Revenue in Europe is expected to recover following a significant decline in 2022 and 2023 that was caused by the Russia/Ukraine war, unfavorable currency exchange rates, and macroeconomic uncertainty.
India surprised us on the upside in 2023. We do have concerns that spending in 2024 will be lower after such a strong start to rolling out 5G, but based on our understanding, outside of one operator, the 5G roll out in the country has really just gotten started.
Worldwide government initiatives to expand broadband coverage into rural areas should stimulate additional demand for microwave systems beyond mobile backhaul.

Bad News

Now for the bad news. The bad news is that the Microwave Transmission market, like many others, is cyclical. Therefore, following these five years of expansion, we are predicting the market to decline or contract for a few years. Specifically, we believe the Microwave Transmission market revenues will trend lower until the next growth cycle is initiated by 6G. Also, similar to past mobile generations, we anticipate that operators will focus on installing new 6G sites at locations with fiber before advancing to sites that use wireless systems for backhaul. So, the next growth cycle for microwave may not occur until 2030, meaning the market contraction period may also be five years in length.

There is one silver lining. Although the broader microwave market will be in a multi-year decline, we believe demand for E-band systems will continue to increase. We are forecasting E/V Band radio transceiver shipments to grow through 2028 at a 13 percent CAGR.

We just wrapped up our semi-annual Router Five Year Forecast report, refreshing our near-term and long-term market views. The following are some of the highlights of the January 2024 forecast report and key market trends for this year.

Near-Term Trends for 2024

The level of market uncertainty remains higher than normal this year due to the following factors: 1) supply and demand imbalance among North American service providers; 2) wars in both Eastern Europe and the Middle East; 3) concern about or fear of an impending economic recession; and 4) higher borrowing costs created by governments raising interest rates.
The component shortage that disrupted the industry is behind us. But, the residual effect of this long supply chain disruption is expected to have some adverse market effects in 2024, particularly in North America where service providers may be sitting on excess inventory.
Although the full year 2023 results are not in yet (4Q23 reports to be completed in February 2024), Core Router revenue looks poised to grow 12% in 2023. That said, some market softness should be expected in 2024 following such a strong year.

Long-Term Trends beyond 2024

The longer-term view of the routing market remains positive, especially for High End Routers since the need for routing capacity will trend higher for many more years to come. We forecast that the cumulative revenue of High End Routers for the next five years will be 15% higher than that of the previous five years at nearly $70 billion.
Based on the annual shipment capacity we are projecting for the next five-years, we estimate that the cumulative network capacity from High End Routers will grow at an average annual rate of nearly 30% with the highest share contribution from 400 Gbps Ethernet and higher port speeds.

All major applications should contribute to Edge Router market growth over the next five years. While network capacity/transport will remain the largest contributor to the market revenue, Cloud DCI and fixed broadband should drive more of the growth in the next five years.

In 2024, the prospect of being the most exhilarating year for RAN revenue growth is unlikely. Analyst Stefan Pongratz shares the top trends in the RAN market.

“Inventory Correction,”“Inventory Realignment,” Or whatever term you prefer to call the root cause of 2023’s broadband spending slowdown will likely persist well into 2024. Without the benefit of fourth quarter numbers, total spending on broadband equipment in 2023 is expected to show a decline of around 10%. Early projections for 2024 indicate an additional 5% year-over-year decrease, as the lagging impact of interest rate increases to curb inflation will be felt more acutely. This additional 5% decrease would put total spending to around $16.5 B—roughly equal to 2021 spending levels.

The expected declines in 2023 and 2024 follow three straight years of white-hot growth in broadband network and service investments from 2020 to 2022. During this period, year-over-year growth rates reached 9%, 15%, and 17%, respectively. Similar periods of growth from 2003-2006 and 2010-2014 were both followed by two subsequent years of reduced spending, as operators—particularly in China—shifted their capital expenditure focus from broadband to mobile RAN.

The silver lining here is that very early signals regarding 2025 show a return to growth, as BEAD and other subsidization efforts begin to trickle down to broadband equipment suppliers. Well before that, pockets of growth in fixed wireless CPE, cable DAA equipment and CPE, and continued spending on PON equipment by tier 2 and tier 3 operators should make the broadband market one in which the headlines might communicate malaise, but a peek under the hood shows clear signs of resilience powering an inevitable return to growth.

Here is what we are expecting in this coming year:

Cable Operators Travel Different Paths to Fend off Fixed Wireless and Fiber

Just like last year, in the minds of cable consumers, cable operators find themselves stuck battling against the perception that they are the provider with inferior copper technology that can’t be flexible when it comes to offering plans that meet a consumer’s budget, like fixed wireless currently can. As a result of this situation, larger cable operators are seeing increased broadband subscriber churn and quarters of net subscriber losses.

Comcast is pushing hard to counter those perceptions and is already offering its X-Class Internet tiers, which offer symmetrical speeds of 2 Gbps in Atlanta, Colorado Springs, and Philadelphia. Additional cities are expected to roll out these service tiers in 2024. Comcast’s use of full-duplex DOCSIS 4.0 (FDX), including brand new CPE using Broadcom’s D4.0 silicon in a two-box configuration. Later this year, we expect to see a combined gateway that also incorporates Wi-Fi 7, as Comcast looks to battle back against FTTH providers by providing the most advanced residential gateway to customers.

Meanwhile, in 2024, Charter’s Remote PHY and vCMTS rollouts will kick into high gear. (At the time of this publication, we are awaiting fourth quarter earnings from both Harmonic and Vecima, the announced RPD partners for Charter’s buildout to determine how much equipment the operator purchased in advance of this significant deployment.) For Charter, which is employing Extended Spectrum DOCSIS 4.0, 2024 will also bring much wider availability of 1.8 GHz amplifiers and taps, as well as a choice of CPE with dedicated silicon for ESD, as well as silicon that combines both FDX and ESD variants.

Charter will likely also announce additional vendors for its upgrade efforts, as the operator has been public about its desire for a multi-vendor environment.

Cox will also begin rolling out 1.8 GHz amplifiers this year but, like Charter, will likely run those at 1.2 GHz until taps and CPE become more widely available.

Meanwhile, for those operators that weren’t part of the initial DOCSIS 4.0 Joint Development Agreement (JDA) with Broadcom (and for some of those who were), DOCSIS 3.1 Plus is quickly becoming an important stopgap measure to help increase throughput within the existing DOCSIS 3.1 framework by leveraging additional OFDM channels. Operators can either use existing integrated CCAP chassis (with either legacy line cards supporting 3 OFDM blocks or newer cards supporting 4 OFDM blocks) or vCMTS platforms. This can be combined with either DOCSIS 4.0 modems or modems designed specifically for D3.1 Plus deployments, which won’t require the additional gain amplifier (and cost) needed for full DOCSIS 4.0.

While it remains to be seen which type of CPE operators deploying DOCSIS 3.1 Plus will move forward with, the fact that there is significant interest in the technology means that there will now be additional operators who will likely move on from DOCSIS 4.0 and instead buy themselves time with DOCSIS 3.1 Plus before moving forward with fiber overbuilds. The biggest question here is just how many operators will do so.

Speaking of fiber, we expect to see additional FTTH deployments—both greenfield and overbuild—by cable operators around the world. Whether using Remote OLT platforms or more traditional OLT platforms, cable operators will take advantage of work being done at CabeLabs to standardize the integration of ITU PON into existing DOCSIS management frameworks. This will make it far easier for MSOs to deploy XGS-PON, as well as 25GS-PON and, potentially 50G- and 100G-PON.

XGS-PON to Dominate Fiber Spend This Year

The PON equipment market will be the most dynamic this year, with tier 1 operators outside of BT OpenReach and Deutsche Telekom, all continuing to better align their inventories with anticipated subscriber growth, as well as reduced homes passed goals. For larger tier 1s, the short-term reduction in homes passed goals will ultimately give way to a renewed construction phase beginning in 2025 that should propel the overall PON market through the end of the decade.

But while the tier 1s slow, there will be no slowing the continued efforts by tier 2 and tier 3 operators in both North America and Europe to both upgrade and expand their fiber networks. In fact, the same dynamic that played out in North America in 2023 will likely repeat in 2024, as tier 2, tier 3, utilities, municipalities, and co-ops all continue their buildouts.

The technology beneficiary will be XGS-PON, which already surpassed 2.5 Gbps GPON revenue back in 2022, but will more than double it in 2024. And in markets where operators are beginning to see cable operators deliver symmetric 2 Gbps services, there is a strong chance they will also sprinkle in some 25GS-PON to comfortably deliver symmetric 5-10 Gbps services.

Meanwhile in China, which is expected to show a marked decline in new OLT port shipments in 2023, will likely see another decline until 50G-PON rollouts begin in earnest later this decade. On the flip side, ONT unit shipments in China are expected to increase as FTTR (Fiber to the Room) deployments expand, delivering 2-3 ONTs per home as opposed to the traditional architecture of using a single ONT to terminate fiber.

Wi-Fi 7 Progress Will Accelerate

With the Wi-Fi Alliance recently announcing the opening of certification testing for Wi-Fi 7 products, don’t be surprised to see dozens of Wi-Fi 7 residential routers and broadband CPE models being deployed by operators by the end of this year. Early gateway models, though pricey, have already been introduced to the market and will become much more widely available this Spring, and then well before the Holiday season. As of our July 2023 forecast, we expect over 2.5 million residential Wi-Fi routers and broadband gateways to ship in 2024, though we are undoubtedly increasing this forecast based on the certification testing opening up.

Operators can’t wait to deploy Wi-Fi 7 products to help differentiate themselves in increasingly crowded broadband markets and to eliminate much of the confusion in the market with the coexistence of Wi-Fi 6 and Wi-Fi 6E.

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