5G Won’t Boost Cellular Until 2021

Release time:2017-07-19
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source: Rick Merritt
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Despite enthusiasm over 5G, spending on cellular base stations will continue a significant decline over the next three years before returning to growth in 2021, according to a new report from Dell’Oro Group.

The report is roughly in line with the outlook from infrastructure giant Ericsson that reported worse than expected quarterly results. Dell’Oro predicted a high single-digit percentage decline in base station sales this year followed by two years of declines in low single digits. Ericsson expressed hopes that the market would be flat in 2019.

The news underlines the precarious position for wireless vendors. They are making significant investments now in 5G technologies and services while navigating the end of major 4G deployments.

“The lull is impacting all regions and all vendors, impacting all three leading vendors, although so far, Huawei has weathered the downturn better than Ericsson and Nokia,” said Stefan Pongratz, a senior director and analyst at Dell'Oro. “We see some promising signs in North America, but the China market is expected to contract 2017, and Europe will overall see a near-term decline.”

For its part, Ericsson reported a $145.3 million second-quarter loss, with both sales and gross margins below consensus forecast, according to a Reuters report that said the company will make cuts of about a billion dollars.

The rapid rise of LTE, especially in China, drove base station sales to a peak of $33 billion in 2014. Since then, annual sales have fallen nearly $4 billion and will fall nearly $6 billion more before they nudge up in 2021, fueled by sales of 5G macro base stations and LTE small cells, said Pongratz.

Market watcher sees $10B revenue decline 2014-2020 for base stations as mainly LTE small cells get traction.
Market watcher sees $10B revenue decline 2014-2020 for base stations as mainly LTE small cells get traction.

“Cumulative radio-access network revenues between 2017 and 2021 are expected to represent the weakest period since we started tracking the market in 2000,” he said. “We’ll see some upgrades to LTE Advanced and Advanced Pro, but upgrade phases typically do not result in growth; they offset declines in macro base station volumes.”

Initial 5G deployments will be for macro base stations in frequency bands below 3 and 6 GHz, with 5G small cells for urban environments quickly following. Millimeter-wave services will account for less than 5 percent of carriers spending on 5G market by 2021.

Although small-cell revenues will quadruple from 2017 to 2021, most of that spending will be for LTE units, said the report. Traditional macro systems still make up more than 95 percent of the base station market, said Pongratz.

The initial 5G rollouts are aimed at expanding existing mobile broadband capabilities for smartphone users. “There’s no question that’s driving the market today and over the next couple of years.”

5G aims to enable two major new uses — massive deployments of devices for the Internet of Things and ultra-low latency services. However, “the impact of those new drivers remains uncertain,” said Pongratz.

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Planning for security in 5G networks requires a whole new approach compared to previous-generation networks to protect network infrastructure, according to a new technical report on 5G architecture and security published by the U.K. government.With 5G rollouts planned in some form or another around the world this year, the very fact that the architecture opens up opportunities for multiple players to operate on the network (rather than just a single network operator) could significantly increase the attack surface for connected devices, autonomous vehicles, and other use cases flagged up for 5G. Hence, the report suggests that a whole new mobile security strategy is needed and makes four significant security-based recommendations that the authors believe will protect vital infrastructure."Since the age of 2G, mobile networks have been some of the most secure things on the planet, helped by the fact that each one is controlled by a single network operator," said Peter Claydon, project director of AutoAir, one of the 5G testbeds in the U.K. that contributed to the report. "5G opens up mobile networks, allowing network operators to provide 'slices' of their networks to customers. Also, customers’ data can be offloaded and processed at the edge of the network without going through the secure network core. This report is a timely reminder of the security challenges that these new features raise."Regius Professor Rahim Tafazolli, founding director of the 5G Innovation Centre at the University of Surrey, added, 'Performance risk in such a complex network means that we need to reconsider many of our digital security processes."The report was produced as part of the U.K.’s 5G Testbed and Trials program, a government initiative to ensure that the U.K. plays a key role in 5G development. Three of the six 5G testbeds contributed to the report, along with the University of Surrey’s 5G Innovation Centre. The three testbeds were AutoAir, which is testing transport use cases; 5G RuralFirst, which is testing the use of 5G to enhance rural communities, and the Worcestershire 5G Testbed, which is testing industrial use cases of 5G.Key highlights are the challenges and inevitable trade-offs between cost, security, and performance in the development and deployment of 5G. In a new environment of multiple use cases, each with different performance requirements, along with the expected introduction of new market players, alignment and cooperation between parties will be essential. In addition, systems will need to be "secure by design," and new approaches, including the use of artificial intelligence (AI), will be required.New ways will be required to predict and pre-validate 5G network connections, leveraging mobile AI-based autonomous network technologies — from mobile phones and smart industrial machines to health-monitoring devices and smart home consumer devices. The networks will need to quickly and efficiently recognize these devices and confirm that they are secure without compromising user experience and performance. The paper also recommends:A cross-layered process that will allow end-to-end security for critical services such as the transport and logistics, health and social care, Industry 4.0, and rural connectivity solutions.An organization that is tasked to help monitor and encourage good security-by-design practice and set out and document an approach to designing secure 5G networks, applications, and services.Further testing of standards and security capability using existing U.K. test beds.The report highlights the scale of the challenge. The International Telecommunication Union (ITU) vision for 5G outlines use cases with very diverse technical performance and system requirements, requiring mobile networks to interconnect with different non-3GPP network technologies. It says that this cannot be achieved by a single network operator in their own domain, and hence, secured and trusted network-to-network interoperability is essential.The 3GPP’s 5G specifications define interfaces for inter-network communications, but further work is necessary to evolve interface functionality, performance, and security. To realize seamless interoperability, effective partnerships will be necessary between different network operators and equipment owners, such as transport companies, rural and local communities and authorities, and publicly funded organizations. To achieve end-to-end security, network boundaries need to be secured across all borders.Adding to the complexity are interconnection of 3GPP and non-3GPP networks, new 5G use cases with diverse requirements, and new 5G technologies, including evolutionary approaches in the mobile network. This adds new security vulnerabilities with a significantly larger attack surface, making it essential to thoroughly evaluate the risks and vulnerabilities and identify work items to alleviate them.The various challenges to deploy secure 5G networks while meeting the requirements of different 5G use cases also creates a trade-off challenge between network performance and security. The combination of increased network-to-network complexity, end-to-end cross-layer system security, and critical applications will mean that conventional security methods will not be feasible.Hence, new technology will be required to meet these challenges to prevent conventional security approaches compromising the required 5G performance. Context-aware networks and AI can process context transfer patterns and correlate them with user, device, application, and security context metadata to make predictive decisions. This will assist the network to make sure that the system setup is one step ahead of the dynamics of the user equipment behavior and context, therefore predicting and pre-validating the required end-to-end security and connection in advance of the device requesting the service.
2019-01-08 00:00 reading:492
Sivers IMA, developer of mmWave products, said that it will jointly develop a 5G base station chip with RF power product company Ampleon, which it expects to bring to market by the end of 2019.Both companies will jointly develop the product, and Ampleon will part-fund the Sivers IMA development by approximately MSEK 3.5 (about $400K). Ampleon will be the main sales channel to Tier-One OEMs for the product resulting from the project.Ampleon supplies sub-6-GHz RF power solutions for 4G and 5G cellular base stations, with the top macro cell telecom network OEMs among its customers. The new chip is being developed in response to demand from top-tier OEMs for state-of-the-art mmWave technology for their next-generation 5G base stations. The partnership aims to bring mmWave components to the market by the end of 2019.Anders Storm, CEO of Sivers IMA, said that it has already been working with Ampleon over the last year as part of a 5G consortium along with Fujikura and other undisclosed partners, which has resulted in a 28-GHz 5G transceiver chip, the TRX BF02, that is now ready for customer testing. The current chip will be able to address the small cell and customer premises equipment (CPE) market for fixed wireless access and some other use cases. The new chip development takes this one step further, to address specific demands from top-tier OEMs, to also offer a solution for 5G base stations.WiGig chip ready for volume productionSiver IMA also announced that its TRX BF01 WiGig chip is ready for volume production, having qualified to the JEDEC standard JESD47JE (“stress-test-driven qualification of integrated circuits”), a global industry standard to ensure component reliability. Qualification tests consist of various stress-related tests, including simulated use over a long period of time (more than 10 years in normal use) and resistance to cold, heat, voltage, humidity, and electrostatic discharge. The TRX BF01 is a wireless multi-gigabyte chip that can be used for next-generation unlicensed 5G for fixed wireless access (FWA) to the home or mesh networks for backhaul. Sivers IMA claims that it is the only chip that can use the entire unlicensed 5G band all the way from 57 GHz to 71 GHz, a band now available throughout the United States and England to be used as free and unlicensed 5G spectrum.The TRX BF01 has already sold to Cambridge Communication Systems (CCS), which is now building unlicensed 5G systems around England in multiple locations. This month, CCS announced that its Metnet 60G unlicensed mmWave wireless solution delivering up to 12 Gbps per radio is now live in the historic center of Bath in England, delivering gigabit backhaul to support interactive 5G smart tourism applications and enhanced visual experiences using augmented reality (AR) and virtual reality (VR) technology.The deployment and go-live of CCS’s Metnet 60-GHz self-organizing mesh radios across the center of Bath is part of the 5G testbed program in the U.K. The test network is being delivered by key partners — including CCS, BT, Zeetta, InterDigital, and University of Bristol Smart Internet Lab — to demonstrate self-provision of 5G and Wi-Fi plus mmWave backhaul capabilities from CCS. The network demonstrates innovative use of the new 57- to 71-GHz unlicensed band and highlights the huge potential for the 14 GHz of spectrum — recently opened up by U.K. regulator Ofcom — for enabling the delivery of ubiquitous high-speed connectivity through gigabit 5G fixed wireless access services
2019-01-07 00:00 reading:418
Keysight Technologies today released the results of the Keysight 2018 State of 5G survey, which reveals that companies primarily invest in 5G technology to secure market leadership, meet customer demand, and take advantage of flexible and scalable networks.The Keysight 2018 State of 5G Survey shows more than half (54 percent) of companies surveyed are already adopting 5G technologies with 46 percent citing securing market leadership early in the 5G lifecycle as the primary driver for their investments. And, more than two thirds of respondents said they are actively seeking 5G test solutions to accelerate the development or rollout out of 5G technology.“To meet customer demand and establish market leadership, equipment manufacturers and service providers need early access to 5G test tools and capabilities,” said Kailash Narayanan, vice president and general manager of Wireless Devices and Operators at Keysight Technologies. “Keysight’s close collaborations with industry consortia and market leaders, deep technical experts, and end-to-end 5G test solutions are empowering the mobile industry to accelerate 5G product design development and commercialization.”Most respondents (63 percent) of the Keysight survey expect higher reliability and lower latency to create the biggest impact from 5G technology. These aspects are important to address new business opportunities. Respondents indicated that the top three benefits of implementing 5G technology are faster networks, greater IoT enablement, and connected car proliferation.By leveraging new and existing technologies including wider bandwidths in millimeter-wave frequencies, massive MIMO and virtualized networks, 5G will deliver a multitude of benefits to meet customer demand across a wide range of vertical industries.“The fact that many respondents are looking for test solutions means that those inventing and deploying the technology want to ensure their implementations perform as expected while securing a market leadership position,” stated Roger Nichols, 5G program manager at Keysight Technologies. “Many of these technologies, or combinations of technologies, are new to the radio communications world, which is why the industry is looking for tools to help them analyze, design, measure, and validate designs that rely on these technologies.”
2018-11-28 00:00 reading:303
A new report from International Data Corporation (IDC) presents IDC's inaugural forecast for the worldwide 5G network infrastructure market for the period 2018–2022. It follows the release of IDC's initial forecasts for Telecom Virtual Network Functions (VNF) and Network Functions Virtualization Infrastructure (NFVI) in September and August 2018, respectively.With the first instances of 5G services rolling out in the fourth quarter of 2018, 2019 is set to be a seminal year in the mobile industry. 5G handsets will begin to hit the market and end-users will be able to experience 5G technology firsthand.From an infrastructure standpoint, the mobile industry continues to trial innovative solutions that leverage new spectrum, network virtualization, and machine learning and artificial intelligence (ML/AI) to create new value from existing network services. While these and other enhancements will play a critical role, 5G NR represents a key milestone in the next mobile generation, enabling faster speeds and enhanced capacity at lower cost per bit. Even as select cities begin to experience 5G NR today, the full breadth of 5G's potential will take several years to arrive, which will require additional standards work and trials, particularly related to a 5G NG core.In addition to 5G NR and 5G NG core, procurement patterns indicate communications service providers (SPs) will need to invest in adjacent domains, including backhaul and NFVI, to support the continued push to cloud-native, software-led architectures.Combined, IDC expects the total 5G and 5G-related network infrastructure market (5G RAN, 5G NG core, NFVI, routing and optical backhaul) to grow from approximately $528 million in 2018 to $26 billion in 2022 at a compound annual growth rate (CAGR) of 118%. IDC expects 5G RAN to be the largest market sub-segment through the forecast period, in line with prior mobile generations."Early 5G adopters are laying the groundwork for long-term success by investing in 5G RAN, NFVI, optical underlays, and next-generation routers and switches. Many are also in the process of experimenting with the 5G NG core. The long-term benefit of making these investments now will be when the standards-compliant SA 5G core is combined with a fully virtualized, cloud-ready RAN in the early 2020s. This development will enable many communications SPs to expand their value proposition and offer customized services across a diverse set of enterprise verticals through the use of network slicing," says Patrick Filkins, senior research analyst, IoT and Mobile Network Infrastructure.The report, Worldwide 5G Network Infrastructure Forecast, 2018-2022 (IDC #US44392218), presents IDC's inaugural forecast for the 5G network infrastructure market. Revenue is forecast for both the 5G RAN and 5G NG Core segments and each of the three related sub-segments (NFVI, Routing Backhaul, and Optical Backhaul). The report also provides a market overview, including drivers and challenges for communications service providers and advice for technology suppliers.
2018-11-15 00:00 reading:461
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