5G and the Network Transformation Opportunity

Most operators I talk with agree that some sort of network transformation is essential to both managing costs and creating new revenue-generating services. The challenge for them is figuring out how to go about it, not only in terms of technology options but in terms of making a business case for changes. Promised savings in capex or opex may be helpful, but operators tell me that they’re still a hard sell in justifying a major network upheaval. Wouldn’t it be nice if transformation were budgeted? Well, it sort-of is, with 5G.

5G has more than its share of entertaining ideas that don’t rise much above the entertainment level, but however much many 5G applications may be overhyped (and most in fact are), that doesn’t alter the fundamental truth that 5G is happening. It’s got a budget, backing in the C-suite, and early 5G deployments are showing the technology can sell itself based on the status 5G brings. That makes 5G an important vehicle in transformation of the network, but the role of 5G and where and how it might impact networks and network vendors isn’t well understood.

I’m finding that even a lot of operator planners are confused by how 5G networks would be built. Part of the confusion lies in the fact that the 3GPP standards for 5G New Radio (NR) and 5G Core imply that 5G networks are separate from other networks, which some operators believe isn’t true. I’ve taken some time to chat with 5G operator planners to get an idea of what they’re thinking, and translate that into some kind of explicit model.

What I’ve found is that it’s best to think of 5G in terms of what I’ll call zones. If we do that, it’s possible to map implementation options with a fair degree of consistency. If we add that inside these zones there are planes that divide functionality into layers, and we can get a pretty good idea of how 5G might actually be built.

Let’s start with our zones. The first zone, the 5G access zone, is made up of the 5G cells themselves, and the backhaul technology that aggregates traffic, usually at metro concentration points that define the “normal” range where user roaming occurs. Those metro points define the 5G core zone, which is the range of technology that supports what Evolved Packet Core (EPC) does in 5G. The 5G Core (5GC) connects to the data network zone, which defines the connection between 5G users and the network services they’re accessing, usually the Internet.

Just as there are three zones, there are three planes in my model, but not all planes are necessarily represented in all zones, particularly in the near term. The lowest plane is the user plane which corresponds to the data plane or traffic flows, and this is really IP connectivity. The middle plane, the control plane, is the set of behaviors that control the connectivity and traffic flow, and the highest, the service plane is where service features are hosted and coordinated.

Standards and industry initiatives vary in influence across the zones. In the access zone, it’s the 5G RAN (and emerging O-RAN) stuff that’s the most important. In the 5G Core zone, the 5G RAN and Core are both influential because the two interact there, and we also see the beginning of the influence of the IPSF and general IP standards here, and those dominate in the data network zone.

As far as technology is concerned, there’s a similar zonal shift in play. Within the access zone, operators seem to be focusing primarily on white boxes, largely because access-zone deployment doesn’t have a lot of current feature variability, so the devices there are much more like traditional fixed-mission appliances. The 5G Core zone, on the other hand, seems to be a place where both white boxes and general-purpose servers (in the form of edge computing) would be deployed. In the data network zone, my view is that we’re back to appliances, either proprietary routers or white boxes, because traffic has been sufficiently aggregated to justify specialized data-plane performance considerations. There is likely a service plane focus here too, because it’s more difficult to couple services to flows that have been highly aggregated, as they are in the data network zone.

All of this combines to say that the most contested ground in 5G infrastructure is the 5G Core zone, which is the metro area. The widest range of resources are deployed here, all the zones are likely represented here, and the primary feature value-add point in infrastructure is likely here too. Not only does that mean that deployments here will likely command the greatest profit margins for vendors, it means that wins in this area could percolate both outward toward the towers and inward to the data network, broadening the value of success in this critical space. If a vendor wants to play big in transformation, they almost certainly have to play big in the 5G Core zone, or they lose the contribution that 5G budgets can provide.

If you’re a hosted-function player like Dell, HPE, IBM/Red Hat, and VMware, you cannot afford to lose in this space, because this is where your best chance of building data centers would be found. If you’re a white-box player (like DriveNets), you’ve got to try to fend these hosting players off here, because the largest number of devices you can aim at are to be found here. Obviously, incumbent network equipment vendors like Ericsson, Huawei, and Nokia need to fend off everyone in this space. All of this jousting and fending creates some specific issues for us to watch.

The most significant of those issues is the integration of the data/user, control, and service planes into a common functional architecture. In a very real sense, the control and service planes give the data/user plane its personality, and those two planes also provide all the service value add potential. One example is that of network slicing; we have to be able to map slicing in some way to and through the data network zone or slicing benefits are confined to a metro area. Another example is edge computing or IoT services, which will require coordination of the service plane (for service discovery and composition), the control plane, and the data/user plane (the latter two for slice and QoS). There’s a lot of latitude for creative positioning in this planar integration story, because not much has really been said or done there.

Appliance vendors targeting the 5G Core zone are at a serious disadvantage unless they have 5G Core functionality, for the obvious reason that 5G Core defines the zone’s properties. That means white-box players will need to have a 5G strategy or they put their metro position at risk, which then could compromise either access or data network positioning, and they absolutely cannot afford to do that. The network equipment incumbents can’t afford to let their natural advantage in the access zone be stopped at the metro point, which is a particular risk given that 5G Core standards are still dribbling out.

What this all adds up to is fairly simple. The metro area is critical because it’s the place that best balances service personalization and economies of scale. 5G Core, combined with 5G RAN (NR for purists) targets the metro-area architecture, and 5G is funded. Hosting 5G O-RAN represents perhaps the easiest way to introduce edge computing. Everyone who wants to sell network equipment to operators needs to sell something for which there’s a budget, and 5G is it. To me, it’s inescapable that 5G is what will transform metro, and metro is the starting point for any kind of network transformation we can expect to see.