H1 2021 CapEx Up Modestly for U.S. Operators, but Supply Chain Challenges Loom

John Byrne, Service Director

Summary Bullets:

  • Through midyear, U.S. network operators have performed as expected on capital expenditures, posting a modest increase in spend over last year’s COVID-dampened investment. T-Mobile USA stands out with a large year-to-year increase as it embarks on aggressive 5G buildout plans.
  • H2 2021 spending appears likely to also be up slightly compared to 2020; however, as evidenced by revised AT&T guidance, looming supply chain challenges could stymy some plans, particularly in fiber deployment.

A GlobalData analysis of U.S. operator financial results based on mid-year 2021 earnings releases shows capital expenditures (CapEx) spending increased just over 7% compared to COVID-impacted H1 2020. In total, the nine publicly reported carriers spent $38.5 billion in CapEx. GlobalData estimates that the big three operators that account for nearly 70% of total U.S. CapEx – AT&T, Verizon, and T-Mobile USA – spent just over $26 billion, up 6.1% from H1 2020. Continue reading “H1 2021 CapEx Up Modestly for U.S. Operators, but Supply Chain Challenges Loom”

25G PON Goes Live, Needs More Deployments to Break into Mainstream

Summary Bullets:

  • 25G PON is market ready and likely to become the technology of choice for operators seeking faster-than-10 Gbps FTTP now and in the near future.
  • Emir Halilovic, Principal Analyst

    The future of 25G PON directly depends on the magnitude of early operator demand and adoption of advanced use cases requiring 25G-specific capabilities.

The Nokia/Proximus announcement of world’s first 25G PON deployment at the end of May was a significant milestone for the global broadband industry. It primarily showed that the 25G PON technology is market ready and significantly outperforming XGS-PON, which is only now becoming mainstream. It also symbolized the increased importance of Europe as a competitive battleground for fixed broadband, which will only continue heating up with increased broadband investment fueled by national broadband plans and post-COVID recovery funds. Finally, the launch served to validate unique capabilities of Nokia’s Quillion chipset, currently the only vendor solution capable of delivering 25G PON. Continue reading “25G PON Goes Live, Needs More Deployments to Break into Mainstream”

Automation, AI, Cloud, and Services – The Foundation for 5G

Glen Hunt – Principal Analyst

Summary Bullets:

Fulfilling the Promise of 5G – 5G requires a fully automated and intelligent network infrastructure capable of delivering high speed broadband and new enterprise and industrial network services.

Taming Complexity – AI and agile cloud-based resources are necessary to deliver a fully digitized and flexible services environment, simplify complex network management and reduce operational costs.

5G network expectations have been well articulated, but meeting these lofty expectations is another matter. Today’s networks are multi-layer, multi-technology, and multi-vendor, which adds to the depth of the challenge at hand. The goal is to deliver new network and application services in a manner that satisfies on-demand user expectations over a network infrastructure that grows more complex over time.

The good news is that automation and AI technologies are steadily ramping up to address the complexity inherent in these multi-X networks; however, before automation and AI can be instrumented, the network infrastructure must be made programmable, a monumental task. The following analysis explores each of the key capabilities needed to establish an intelligent 5G network and note significant advances in vendor solutions. Continue reading “Automation, AI, Cloud, and Services – The Foundation for 5G”

Homeworkers May Be the True Market Opportunity for 5G Fixed Wireless

John Byrne, Service Director

Summary Bullets:

  • Operators and vendors have been targeting the U.S. market recently with a number of new offerings that enable enterprises to provide a secure IT and communications environment for their employees that are increasingly likely to work-from-home even after the pandemic subsides.
  • 5G proponents have thus far struggled to identify workable use cases for 5G fixed wireless, particularly as a replacement for fixed broadband. The incremental enterprise opportunity may represent the true 5G FWA use case.

Google became the latest big company to embrace an extended – and perhaps permanent – employment paradigm in which many employees will be working from home, at least part-time, for the foreseeable future. Google CEO Sundar Pichai announced March 5 that Google will allow approximately 20% of workers to stay home permanently, and most employees will be able to work from home two days per week. Google joins a host of companies embracing hybrid working environments even once pandemic restrictions have fully eased. Continue reading “Homeworkers May Be the True Market Opportunity for 5G Fixed Wireless”

T-Mobile US–Lumen Alliance Combines 5G and Edge: Is a Merger the Next Logical Step?

John Byrne – Service Director, Global Technology Telecom and Software

Summary Bullets:

• T-Mobile US and Lumen announced an alliance in April to sell packages of edge computing services and 5G wireless to enterprises in the U.S.

• The venture leverages the strengths and blunts the weaknesses of both companies. Longer-term, it could lead to a merger that would enable both companies to compete more effectively against AT&T and Verizon.

T-Mobile US and Lumen Technologies announced in April that they will embark on a strategic alliance to help business customers build, manage, and scale applications across distributed environments. The partners note that enterprise applications would benefit from Lumen’s hundreds of thousands of fiber-connected enterprise locations paired with T-Mobile’s large and fast 5G network. T-Mobile will also become a preferred wireless connectivity partner for Lumen, allowing for a more flexible and reliable connectivity solution for all enterprises. Continue reading “T-Mobile US–Lumen Alliance Combines 5G and Edge: Is a Merger the Next Logical Step?”

Why It’s Already Time to Start Talking About 5.5G

Ed Gubbins, Principal Analyst

Summary Bullets:

• Huawei has begun promoting “5.5G,” assigning it three new capabilities related to faster uplink, real-time broadband, and harmonization

• 5G is already evolving faster than 4G; going forward, the conventions of technology branding may change

For much of the previous decade, the mobile telecom industry promised that 5G would arrive in 2020. Now we’re only a few months past 2020, and we’re starting to hear more about the next steps: 6G won’t arrive until 2030, but in 2025, there’s 5.5G. Continue reading “Why It’s Already Time to Start Talking About 5.5G”

TIP Spells Out What WAN SDN Controllers MUST Do

Emir Halilovic, Principal Analyst

Summary Bullets:

  • TIP MUST intends to accelerate SDN adoption in the WAN by defining requirements for WAN SDN based on real-life operator use cases.
  • The resulting architecture is open and will likely help fill the gap most vendors are unwilling or unable to address: the hierarchical controller space.

From the onset of attempts to implement SDN into telco WAN infrastructure, operators have faced two obstacles that severely limited its usefulness: lack of multi-vendor support and inability to control legacy environments. Telco equipment vendors have not been able to come up with a technical consensus that would solve these issues, for various reasons. Instead, most WAN SDN implementations have so far been restricted to one vendor’s equipment or have entailed costly integration of multiple vendors’ equipment under one domain controller. The results of these developments have so far been underwhelming; the market landscape remains fragmented, SDN adoption is slow, and the costs are high due to custom integration and operational support overhead. Continue reading “TIP Spells Out What WAN SDN Controllers MUST Do”

US Operators Signal Higher Capex in 2021 After a COVID-Dampened 2020

John Byrne, Service Director

Summary Bullets:

• Despite the impact of COVID-19, capital spending by US network operators was down relatively modestly in 2020, falling by around 4%.

• 2021 guidance from these operators shows a return to roughly similar levels as 2019. Continued demand for additional network capacity along with new 5G imperatives clearly remain.

An analysis of US operator financial results based on Q4 2020 earnings releases shows that while COVID-19 did slow capital investment, it could have been worse. Thanks to a flurry of activity toward the end of the year, the nine publicly-reported carriers, all of which spent in excess of $1 billion in capex, accounted for just over $67 billion in spending. That was down by approximately $3 billion, or 4.2%, compared to 2019. GlobalData estimates that the big three that account for nearly 70% of total capex – AT&T, Verizon, and T-Mobile USA – spent roughly $46 billion, down 6.1% from 2019. However, the bulk of the decline was attributable to AT&T. Continue reading “US Operators Signal Higher Capex in 2021 After a COVID-Dampened 2020”

MWC2021 Organizers Insist the Show Must Go On

John Byrne – Service Director, Global Technology Telecom and Software

Summary Bullets

• GSMA is moving forward with plans for an-in person MWC Barcelona event, though roughly half its normal size and with numerous COVID-19-related precautions.

• Despite moving the date back four months to June 2021, there are still many obstacles to overcome before an actual event will even be feasible.

After the GSM Association (GSMA) made the difficult decision to cancel Mobile World Congress (MWC2020), the largest mobile event in the world, last February, it spent months working with exhibitors on a revised package of discounts to future events. For most exhibitors, the compromise package meant agreeing to forego any cash refund. Instead, these companies agreed to a series of rebates on future events, including a 65% credit on MWC2021, a 35% credit on MWC2022, and a 25% credit on MWC2023.

The event, held annually in Barcelona, was originally scheduled for this week. However, last September the GSMA agreed to postpone the event by four months to hedge its bets, just as Europe was heading into its second wave of COVID-19 infections. The question now is whether even the additional four months will be enough time to carry off a physical event. Continue reading “MWC2021 Organizers Insist the Show Must Go On”

Mobile Operators Are Looking to Incubate Their Way to 5G Success

John Byrne – Service Director, Global Technology Telecom and Software

Summary Bullets

•T-Mobile US introduced a new incubator program designed to foster 5G innovation. Operators and networking vendors are increasingly in the business of seeding 5G innovation.

•The growing number of 5G innovation hubs highlights the growing challenge facing mobile operators hoping to monetize expensive 5G network buildouts.

Mobile operator T-Mobile US announced a new “5G Connected Future” incubator program in February that combines technology, academia, “Curiosity,” and seed money, in a bid to foster new revenue-generating 5G applications.

T-Mobile will collaborate with the Georgia Institute of Technology’s Advanced Technology Development Center (ATDC) on the program, which represents an expansion of T-Mobile’s Accelerator program. T-Mobile reports it has worked with 67 startup companies that have raised over $50 million in funding since participating in the Accelerator program, all focused on building immersive 5G-based applications such as augmented/virtual reality applications, holographic displays, and robotics. Continue reading “Mobile Operators Are Looking to Incubate Their Way to 5G Success”