Summary Bullets:
- GlobalData recently published its comprehensive set of 2020 predictions across mobile and fixed access, transport and routing, and telco software and services.
- The predictions here represent some of the most intriguing industry trends that vendors and operators will need to track closely in the coming year.
Standalone 5G Rollouts: Mobile operators will begin to deploy standalone 5G, which doesn’t rely on an LTE core. Because the first wave of 5G, non-standalone, heavily incentivizes operators to simply add 5G to their existing 4G infrastructure, some operators will use standalone 5G as an opportunity to trial new suppliers and architectures, including virtual core suppliers and Open RAN architectures. The timing of deployments will depend in part on how quickly operators can transition their voice services, since 5G won’t offer a circuit-switch fallback option, as 4G did.
Proving 5G Value: Mobile operators will continue to struggle with proving the value of 5G mobile broadband to consumers, as indicated by recent reports of unimpressed 5G customers thus far in South Korea. At Mobile World Congress 2020 (the year that has been hailed for most of the previous decade as 5G’s arrival date), vendors will once again, for at least the third year in a row, emphasize that 5G is ‘here’ and ‘real.’ At the same time, they will also concede that the enterprise use cases at the heart of the 5G value story are still at an early stage of development.
Shifting RAN Vendor Landscape: It’s too difficult to predict whether more countries will follow the U.S., Australia, New Zealand, and Japan in erecting barriers to Huawei and ZTE’s participation in their network infrastructure markets. But in any case, what has already transpired – combined with the cloud of uncertainty it casts over the future – will likely have several near-term effects in 2019.
Private LTE Comes of Age: All the attention paid to 5G services in 2019 will obscure the significant growth of private LTE ecosystems in 2019. RAN vendors will be hard at work forming and bolstering coalitions with a range of ecosystem players, including robotics and automation IT suppliers, and creating solutions for factories and campuses based on the reliability, maturity, and performance of LTE. 5G can wait.
WiFi Fights Back: Members of the WiFi ecosystem will maintain a public (and direct lobbying) campaign to challenge the 3GPP’s proposal to use 5G in unlicensed spectrum. As they did with license-assisted access (LAA), WiFi proponents will argue that unlicensed 5G will interfere with and disrupt WiFi networks. This time around, they may point to LAA’s current lack of momentum to argue that unlicensed 5G won’t be popular either. Meanwhile, the next generation of advanced home gateway solutions, which leverage both mesh and managed WiFi technologies, will begin to be introduced by fixed and converged operators to boost their value proposition in the home.
Automation in Transport Moves Beyond Theoretical: In 2020, vendors will continue to showcase the success of the first commercial deployments for their transport network automation solutions. These success stories should provide a necessary impetus for adoption of evolved NMS-SDN solutions and, in some cases, could accelerate network installed base replacements, if the ROI is compelling. Most vendors’ automation solutions still focus on limited OpEx savings resulting from decreased management workload. In 2020, vendors will focus on automation solutions that open up new revenue opportunities by making provisioning much faster and exposing network resources to clients and partners much easier, driven by embedded telemetry and rich analytics to interpret network traffic and service demands.
Silicon on Steroids: The latest networking silicon available in 2019 delivered more advanced telemetry information to support monitoring. Telemetry continues to drive advancements in automation and O&M activities which are critical to maintaining quality of experience and further reducing OpEx. Telemetry will not be limited to the edge and core of the network, but will move to the access layer and even into the radio access network (RAN) to aid in visibility and in O&M operations. 2020 has brought the next generation to market using the latest in silicon design; merchant silicon vendors continue move forward, but have competition from the large IP equipment vendors such as Cisco, Juniper, Nokia, and Huawei, as well as optical transport vendors such as Ciena and Infinera which continue their investment in photonics.
Router and Switch Performance Explodes: Just a few years ago, the capacity and port speeds supported by networking gear were typically 1G access, 10G aggregation, and 100G in the core; however, heading into 2020, we see this multiplying to 10G access, 100G aggregation, and 400G for the core nodes. This obviously goes to addressing the massive projections of continued growth and expansion as the market moves into the 5G era, but the speed at which this has occurred is remarkable. The added performance has been made possible through continued R&D investments of massively expensive silicon and photonics advances, which not only provide the muscle but do so with reduced power consumption per bit and a significant reduction in physical port size.
Webscale Techniques Become the Norm: Webscale operators made their presence known several years ago, when they threatened to build their own gear unless vendors listened to their demands and stepped up to deliver on their requirements; the key areas of focus at the time were simplicity, performance, and cost. Moving into 2020, the difference between traditional telco gear and webscale gear has all but vanished; simplicity through automation and analytics as well as high-density 100G/400G Ethernet ports now prevail, and power has been reduced to .15 Watt per Gbps of data transported. Pressure to disaggregate components of vendor solutions has fueled open interfaces at all levels of the architecture, enabling operators to run vendor software on white box platforms or run open software on vendor-supplied platforms that are optimized for specific network applications (like environment hardening).
5G Changes the Traffic Mix: As new 5G services and applications drive more routed IP traffic into the network, the traditional role of switched layer 2 Ethernet traffic is being sidelined and replaced by more dynamic routed IP flows. This is prevalent in the mobile backhaul and business Ethernet services domains, which were the last frontier that could claim a cost and simplicity advantage by remaining at Layer 2. The maturation of SDN, which supports a centralized control plane and distributed data plane, can now leverage simplified routing based on protocols such as segment routing and Ethernet VPN (EVPN), minimizing the need for complex management and control intelligence in the network nodes. This results in the best of both worlds since operators can offer advanced services while not incurring added management complexity within their network infrastructures. The promise is that network equipment can be less expensive as a result – but, in reality, that portion of the proposition may be a bit of a pipe dream, given the need for increased capacity and speed.
5G Transport to the Fore: Transport will become the new 5G battleground for packet and optical vendors in 2020. In the beginning of the year, most emphasis will be on time-sensitive networking (TSN) switches that will serve most initial 5G standalone deployments. Later in 2020, optical access vendors will join the fray with 25G and possibly 50G PON-based solutions, further increasing the number of options that operators will have for serving 5G X-haul. This goes especially for operators with fixed access deployed and those that intend to deploy 5G small cells. The space for WDM-based transport will be limited geographically and appear mostly in China and other areas with plentiful fiber plant. Finally, new technologies in optical transport, like Infinera’s XR Optics, will enter testing and possibly shake up the market for mobile transport even further.
The Year of 10G PON Not Happening (Again): Interest in XGS-PON will remain marginal in 2020, and its market momentum will mostly be limited to greenfield deployments (where its pricing makes sense) and limited upgrades in areas where fixed access competition is high and operators have revenue incentives to deploy. Operators will not be able to find a clear business case for 10G PON and will instead center their future deployment plans on faster – as of yet not finalized – PON standards, like 25G and 50G PON. Faster-than-10G PON technologies promise much higher versatility for operators, primarily in serving 5G X-haul. This is not only due to the higher transport capacity promised with 25G and 50G, but also due to the more stringent timing and synchronization methods vendors are working into the new PON technologies. Also, 25G and 50G PON will be able to serve emerging streaming gaming, AR, and VR applications much better than XGS-PON.
Members of GobalData’s Telecom Technology & Software analyst team contributing to this report include:
- John Byrne, Service Director
- Ed Gubbins, Senior Analyst
- Glen Hunt, Principal Analyst
- Andy Hicks, Principal Analyst
- Emir Halilovic, Principal Analyst