If 5G is a vast and confusing set of technologies, it’s just as vast and confusing at the competitive level. If you do a bit of Internet research on 5G you’ll find that a few key vendors seem to be offering all the collateral. Ericsson tops the list, with Huawei and Nokia behind. Below them, there’s an array of players and even standards groups that are hoping to ride the coattails of 5G onward to fame and fortune. If buyers actually have all this to choose from, can we ever hope they’ll make a decision and deploy? Can buyers tolerate a vendor lock-in with a big player, or can they find a path to building an open 5G network by summing a bunch of small parts?
Operators tell me that these two models of 5G, the one-stop-shop or the open federation, on the table, and while we don’t see this specific view much in articles and tutorials, it’s what is really going to drive 5G wherever it goes. What we need to do then is to fit the news into the models.
5G is a big interactive collection. Operators could make the whole question of assembling the pieces and having them work together easier by picking one vendor. Ericsson, who has its own challenges in the revenue and profit area, is banking on 5G to make its numbers for years to come. One of my contacts there tells me that in business planning sessions, 5G shows up as the big opportunity all the way through 2023.
Nokia is in a similar situation. While the company has a broader IP network product line than Ericsson, it’s still facing the challenge of convincing buyers who see profit per bit falling that spending more on pushing bits is a smart approach. One thing that’s been true about 5G for the last three years is that operators have put it into their long-term budget planning without much question. That means that linking some equipment/software proposal to 5G gets it a seat at the financial table, at least.
Huawei can afford to be a bit more circumspect on 5G prospects because they are profitable and have the broadest product portfolio of any major network vendor. Still, they see a risk in 5G because if the future does indeed depend on 5G for CFO credibility, then they have to play strongly there. That’s a challenge for Huawei because they’ve historically focused on being the price leader more than the new-technology driver.
It’s tempting to look at the 5G market as a war between these three players, but here’s an operator comment (suitably sanitized) that demonstrates the first of several levels of complexity. “5G is really three layers. There’s the New Radio stuff that’s distinctly 5G. There’s the virtual or slicing piece, which is a combination of mobility, subscriber management, and virtualization like NFV. Then there’s everything from backhaul through the whole metro and cloud infrastructure, which isn’t 5G any more than wireline.”
The point this comment makes is that what’s distinctively 5G is really a veneer on a big onion. A vendor who has an ecosystemic 5G solution (like Ericsson, Huawei, and Nokia) have to establish their 5G creds in a thin layer of technology, and then have that pull through a larger chunk of gear. That reality intersects with our second level of complexity, which is that 5G probably doesn’t deploy all at once.
Almost everything that a user would see as a 5G benefit comes along through the New Radio portion of the standards. The relationship between 5G and the handsets is largely established by the NR stuff too, and that combination has induced everyone to focus on NR first. Then there’s the fact that a millimeter-wave portion of 5G NR can be combined with fiber to the node to create an alternative to DSL in wireline broadband delivery. This 5G/FTTN hybrid could well end up deploying faster than the mobile part of 5G NR.
I want to win at 5G, says an ecosystemic vendor. 5G NR is first to deploy, hence I want to win in 5G NR. However, the whole 5G ecosystem is the target, so I need a 5G architecture. That’s why Ericsson, Huawei, and Nokia are taking such a broad 5G mission target at MWC. They have to convince buyers that their first step has to consider the rest of the path, the ultimate future. If they don’t, then an early win may not give the vendors much in the way of longer-term revenue growth.
So, are we in the battle of the 5G ecosystems? Maybe not, because of the second pathway that 5G could take, which is the open approach. Suppose the “5G ecosystem” were completely, effectively, defined? Every part, piece, feature, box, software component established and put in its rightful place? What we’d end up with is a war for best of breed for every one of the elements of 5G. Many vendors who specialize in one technology area would have a shot. Nobody would win it all.
The threat, from the perspective of the “open system 5G” vendors, is that same early-NR deployment. There are very few credible NR players besides the main ecosystem vendors, so if operators start with NR and pick one of those few credible players, that gives the player a leg up on the whole ecosystem and threatens the open model of 5G.
This is what’s behind the notion of the whole “Open vRAN” initiative, a Cisco idea to break the tri-opoly of those big ecosystem NR players. According to the press release I’ve linked to here, Cisco thinks that it’s time to collect all the various vRAN concepts into a single initiative and collaborate to develop that initiative and model as a viable NR option. The NR whole would be greater than the sum of its disconnected parts, in short.
It’s obvious that this approach is hardly compatible with the goals of Ericsson, who is perhaps the most dependent of the ecosystem players on a big 5G success. It’s obvious that this could represent a strain on the Cisco/Ericsson relationship, but the big truth is that it means that Cisco doesn’t want to rely on Ericsson’s 5G success to pull Cisco gear into a full 5G deployment. If the Cisco/Ericsson partnership is seen as a focus issue, the move doesn’t signal Cisco’s withdrawal as much as it signals that Cisco doesn’t think there’s anything real to withdraw from.
The big question here is whether vRAN is a real option or just a competitive spoiler. The “horse-designed-by-committee” comes to mind, particularly when you consider that open vRAN has a limited real benefit to operators if nothing broadly 5G-supportive comes along behind it. Remember that current standards initiatives like SDN and NFV are incomplete with respect to a full 5G infrastructure mission, and that it’s difficult to even find an open tutorial on 5G much less open elements for sale.
On the spoiler side, it’s hardly unlike Cisco to either rain on a market parade if they don’t look good in the space, or work directly to stall competitors’ progress. If they think the market might develop and don’t think Ericsson will get them enough of a piece, then an open strategy would be wise. That’s particularly true if we assume that an open RAN or open 5G option would require the same kind of standardization and federation of interests that have been ineffective in making real headway with SDN or NFV.
But perhaps Cisco sees more, and perhaps most of all, they see a future telecom market that could be dominated by mobile-infrastructure incumbents. If 5G is the way to the hearts of CFOs, then could the operator comments on 5G that I cited suggest that pulling wireline and wireless closer would favor incumbent wireless giants, among whom you could hardly count Cisco? Opening wireless via vRAN might then be a very wise move indeed.