The traditional fall technology planning cycle for network operators isn’t over yet, but I’m already hearing a lot of interesting stuff, and also that most of the good stuff has already been discussed. Thus, it’s a good time to take a look at what operators really think about their 2019, and the specific technology areas that are going to advance toward (if not all the way to) reality.
Let’s start with the obvious, which is 5G. The good news, really good news for a lot of people, is that 5G is going to move with increased speed next year, and that’s only the beginning. The mixed news (bad for traditional mobile players and good for other network vendors) is that 5G isn’t going to move in as revolutionary a direction as some had hoped.
The two areas of primary 5G focus for 2019 are millimeter wave, in the US and in some other markets, and New Radio (NR) almost everywhere. I’m naming mm-wave first because despite the fact that only a half-dozen operators are committed to it next year (an eighth of those who gave me input), the dollar value for deployment is the largest for the 5G space. Half the operators on the list will likely account for over 80% of the money spent. New Radio has breadth, but it’s still taking baby steps even next year, and so while every operator on my list said they’d be doing some NR deployment, nobody thought it would amount to much more than “pre-positioning” assets for a bigger 2020 move.
What makes mm-wave so much an investment favorite is the fact that since it’s going to deploy as a FTTN hybrid to offer residential and some business broadband, it’s effectively close-ended technology. Operators provide both the nodal part and the home/business part, and so they can pick whatever flavor makes sense and be sure that everything will talk. NR requires mobile devices, mobile devices without NR services are illogical, and so there’s the classic who-moves-first-and-takes-the-risk problem. It can resolve only one way; operators will have to pre-deploy to encourage handset players to offer new devices, and users to take a chance and buy them.
Operators tell me that there will be some phones, primarily Android models (they say) with 5G (Qualcomm) chips roughly the end of Q1, and there will be some operators who deploy 5G NR (over the LTE core, for what’s called “Non-stand-alone” or NSA) some real NR sites around that same time. They expect early devices to cost something like a 50% premium over standard handsets, but these new gadgets will also support the traditional 4G LTE and even HSPDA bands as well. Think of them as early-adopter targeted, bragging rights primarily.
5G NSA is expected to expand quickly next year, though. By the end of the year, the operators I’ve gotten data from think they’ll have 5G coverage in most of the major metro areas they serve. They expect that by 2020, mainstream 5G devices will be available, and that by 2021 they’ll be offering 5G NSA services “widely through their service area”. By that time, 5G device premiums will have fallen to less than 15%.
The second thing operators say has gotten the stamp of approval is carrier cloud, but according to what they’re telling me, there’s still a lot of haze surrounding what’s going to happen there. One reason is that about a third of operators call what they’re expecting to start deploying “carrier cloud”, another third “edge computing” and the final third simply lumps hosting in with other projects, ranging from 5G to video and ad delivery. That spreading of commitment is what’s making me nervous; it seems to me that they’re lumping a lot of hopes into a “carrier cloud” bucket, and most of those hopes would have to be fulfilled to make something really happen.
The problem with carrier cloud is that it’s not an incremental commitment. For carrier cloud to work economically and operationally, an operator would need to deploy several thousand servers and the proper cloud and lifecycle software tools. None of the operators said they had a budget to just build things in the hope that applications and paying customers would simply come along. To make matters even more complicated, there didn’t seem to be much of a consensus on what the software framework for carrier cloud would be.
Everyone, of course, thinks Linux is the foundation. The next level up, tool-wise, would normally be a cloud stack and orchestration. OpenStack only gets a nod from about 20% of operators, another 20% or so say they like containers and Kubernetes, and the rest are still “considering alternatives”. For lifecycle management, the truth is that only ONAP is out there at this point, but only about 15% of the operators thought there was any chance they’d adopt ONAP next year, and a third of that were sure they would—that comes to 4 out of the group.
One factor that’s confusing operators who have a general commitment to both 5G and carrier cloud is how SDN and NFV fit in. Fewer than 10% of the operators believed either SDN or NFV would be “major drivers” of either 5G or carrier cloud, and just over 10% thought SDN or NFV could contribute “significantly” to either 5G or carrier cloud deployments. However, nearly all operators believe that SDN and NFV will play a role in both 5G and carrier cloud.
Of the two, SDN is the one with the clearest mission. Every operator who believes in either technology believes in SDN deployment in carrier cloud, both for data center networking and for data-center interconnect (DCI). For most, they expect to pick a flavor of SDN from a vendor rather than adopting an open model, largely for integration and stability reasons. SDN in 5G has the support of less than half the operators, largely because there’s still confusion on exactly what the 5G ecosystem will end up looking like.
NFV has the widest variation in support of any of our new technologies. About a third of operators see NFV in virtual CPE (vCPE) missions, but most admit that their deployments will likely not follow the ETSI specs because they’re overkill for simple function-in-vCPE hosting. About 20% think they might use NFV in 5G down the line, perhaps 2021, but again they admit that what they’re really likely to deploy are cloud instances of packet core functions that don’t rely on the ETSI specs.
The biggest problem operators cite for NFV is the licensing fees for the VNFs. They say that the pricing that prevails so cripples the NFV business case that it often doesn’t make any sense at all to deploy it. Only about a quarter of operators will also admit that the rest of the NFV ecosystem isn’t in place—that in particular they need better lifecycle management tools.
This adds up to a 2019 that’s really mostly about the cloud, one that perhaps finally accepts that the future of network infrastructure isn’t a bunch of standards groups, but the adoption of cloud practices that have been around for as long or longer than either SDN or NFV. That’s good news in one sense; it shows a maturing of the thought processes. It’s bad news in that it says we’re spinning our wheels on a lot of initiatives that aren’t paying off.