Tag: Bharti Airtel

Telco Cloud Deployment Tracker : Is 5G SA getting real?

5G SA core: Will 2H23 finally see momentum?

At the end of 2021, we predicted that 5G SA core deployments would significantly accelerate in 2022, but they did not. There were 21 launches of converged 5G NSA/SA or pure 5G SA cores in 2022, against 18 in 2021. In the January 2023 update of our tracker, when we reviewed telco cloud activity for 2022, we shifted all the outstanding deployments once expected in 2022 to 2023. Some of these deployments had been announced for over two years and this made 2023 look as if it might become the year of 5G SA.

Now at the half-way point in 2023, there have been only seven 5G SA (including converged 5G NSA/SA) core deployments so far:

  • Although few in number, these deployments are significant either by their scale (Reliance Jio in India) or by virtue of the importance of the operators involved: E& (introduced in the UAE in March); and Vodafone (in the UK in June).
  • And for Orange, which is engaged in 5G SA deployments across its entire European footprint, the launch of a first country (Spain in February 2023) is encouraging progress.

But it is legitimate to ask whether the remaining 30 5G SA launches that we still have pending for 2023 are likely to take place in the remaining six months (as our Tracker currently reflects). Or will they in fact trickle in over the next few years or even not happen at all?

Global deployments of 5G core by type, 2018–2024

Source: STL Partners

 

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Why have SA 5GC deployments gone off track?

Our September 2022 report 5G standalone (SA) core: Why and how telcos should keep going provided some pointers as to why operators are slow in jumping to 5G SA. These remain valid today:

  1. 5G SA requires significant investment, for which (in some markets at least) there is no clear ROI because the use cases that would leverage 5G SA capabilities (in terms of latency, bandwidth or high volume of connections) are yet to emerge, both on the consumer and the enterprise fronts, as are the ways to monetise them.
  2. Many operators are still weighing up their strategy for partnering with the hyperscale cloud providers. In particular, this relates to the role of public cloud as an infrastructure platform for 5G SA deployments and the role hyperscaler infrastructure can play in accelerating SA network coverage.
  3. Some of the leading operators that are yet to launch SA are also among the main supporters of open RAN and/or are engaged in fibre rollout projects: those conflicting investment requirements may create delays and a need for phasing in some of the rollouts.

To fully exploit 5G SA requires an organisational evolution within telcos. To reap its benefits as both a pure connectivity enabler and as a platform for innovative services, telcos need to undergo an evolution in their processes and organisations to support cloud practices and operations. This doesn’t happen overnight.

In APAC where SA is steaming ahead, greater telco ambition and strong state support have spurred deployments

One way to address the question of stalled 5G SA deployments is to examine what has driven the deployments that have taken place. Will the use cases involved there drive a bigger wave of deployments globally?

While there have been 13 (converged 5G NSA/) SA core deployments in Europe, 31 have taken place in APAC. They involve the leading operators in China, Japan, the Philippines, Singapore, South Korea and Taiwan. The roll-outs support bandwidth-hungry consumer use cases such as gaming, AR/VR, HD/4K content streaming, VoNR, etc. Some operators, such as NTT Docomo, SK Telecom and the Chinese players, have made SA available to support a limited number of private networking and industrial IoT use cases. Factors driving these deployments include:

  • State support or mandates for 5G SA (China and South Korea)
  • Consumer enthusiasm for and early adoption of 5G, with the SA version offering tangible performance gains over 4G
  • Rich ecosystem of local device manufacturers and app developers, and a commitment by operators to invest in new use cases and services
  • Ability to offload ‘power users’ of bandwidth-hungry, latency-critical services off the 4G and 5G NSA network and willingness from those users to pay a premium for these benefits (the three Chinese operators have seen modest ARPU increases between 2020 and 2022 of between 2.5% and 5.2% per annum)
  • Pre-existing local and metro fibre, supporting 5G SA backhaul.

Effective deployments of 5G SA and converged 5G NSA/SA cores by region, 2019-23

Source: STL Partners

 

Table of Contents

  • Executive summary
  • Deep dive: Is 5G SA getting real?
  • Regional overview
  • Operator view
  • Vendor view

Related research

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Telco Cloud Deployment Tracker: Deploying NFs on public cloud without losing control

In this update, we present a review of telco cloud deployments for the whole of 2022 and discuss trends that will shape the year ahead. Fewer deployments than expected were completed in 2022. The main reason for this was a delay in previously announced 5G Standalone (SA) core roll-outs, for reasons we have analysed in a previous report. However, we expect these deployments to be largely completed in 2023. 

We also review deployments of NFs on the public cloud in 2022. While few in number, they are significant in scope, and illustrate ways in which telcos of different types can deploy NFs on public cloud while retaining control over the management and ongoing development of those NFs.

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CNFs on the public cloud: Recent deployments illustrate how to avoid hyperscaler lock-in​

Few telcos have yet deployed critical network functions on the hyperscale cloud, as discussed in this report. However, significant new deployments did go live in 2022, as did tests and pilots, involving all three hyperscalers:​

​Recent deployments and trials of CNFs on public cloud

Source: STL Partners

In our recently published Telco Cloud Manifesto 2.0, we argued that telcos thinking of outsourcing telco cloud (i.e. both VNFs/CNFs and cloud infrastructure) to hyperscalers should not do so as a simple alternative to evolving their own software development skills and cloud operational processes. In order to avoid a potentially crippling dependency on their hyperscaler partners, it is essential for operators to maintain control over the development and orchestration of their critical NFs and cloud infrastructure while delivering services across a combination of the private cloud and potentially multiple public clouds. In contrast to a simple outsourcing model, the deployments on public cloud in 2022 reflect different modes of exploiting the resources and potential of the cloud while maintaining control over NF development and potential MEC use cases. The telcos involved retain control because only specific parts of the cloud stack are handed over to the hyperscale platform; and, within that, the telcos also retain control over variable elements such as orchestration, NF development, physical infrastructure or the virtualisation layer.

In this report, we discuss the models which the telcos above have followed to migrate their network workloads onto the public cloud and how this move fits their overall virtualisation strategies.

Previous telco cloud tracker releases and related research

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Reliance Jio: Learning from India’s problem solver

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Introduction

This year marks the 25th anniversary of mobile networks in India. The huge potential of the market has attracted many players (even as recently as 2016, there were 12 mobile operators in India). But most have had their fingers burned by the complexities of this market, as well as intense competition, particularly following the entry of Reliance Jio in September 2016.

In the past four years, Reliance Jio has gone from strength to strength, becoming the leading telco in terms of mobile subscriber numbers in December 2019, dramatically expanding internet access and driving adoption of digital services across the country. It is not an exaggeration to say that Jio played a major role in the digital transformation of India to date.

Evidence of Jio’s impact on the Indian market

Source: STL Partners

Jio leads Indian telecoms

By delivering broad societal progress and value, Jio has been able to overcome many of the regulatory and political challenges that have hindered other new entrants to the Indian telecoms market. Jio is in good standing as regards its future ambitions in the digital environment, helping it to attract over USD20 billion in investment between April and July 2020 from Facebook, Google and other international investors.

In India, Reliance Jio has trialled elements of a Coordination Age approach, setting out to solve various socio-economic problems by matching supply and demand, while moving up the value chain to unlock further sources of revenue growth.

At the time of Jio’s entry, India was still predominantly a 3G market, with voice calls being the main application. Although there were a multitude of plans on offer and the retail price per minute was among the lowest in the world, mobile communications remained out of reach for many (not helped by high license and spectrum fees that translated into upward pressure on pricing).

Reliance Industries recognised an opportunity to use the advent of 4G technology to build a data-first telecoms player that could support its wider aspirations to develop a globally competitive technology business in India. Accordingly, it obtained a nationwide license to operate a 4G network and encouraged take-up with a promotion that offered customers free voice calls forever.

The existing operators rushed to defend their market positions by dropping their prices resulting in a price war that destroyed value in the market and has led to consolidation and insolvencies such that, aside from Jio, only two privately-owned operators remain – with the real possibility that the market will shrink further and become a duopoly.

STL Partners covered the success of Jio’s disruptive market entry strategy in Telco-Driven Disruption: Will AT&T, Axiata, Reliance Jio and Turkcell succeed? report in 2017. This report considers Jio’s strategy in the context of the Coordination Age. It looks at what this has meant for the market and highlights the implications for operators in other developing markets.

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Table of Contents

  • Executive Summary
  • Introduction
  • Interventionist government shapes market
    • Mobile market overview
    • The shifting sands of policy
  • Jio overtakes the incumbents
  • The rise of Reliance Jio
    • Leveraging the strength of a conglomerate
    • Restructuring and renewal
  • Major emphasis on partnerships
    • Start-ups
    • Global technology partners
  • Competitor positions
    • Bharti Airtel faring better than Vodafone Idea
    • Competitors’ relationship with the government
  • Conclusions
    • Lessons for telcos in developing markets
  • Index

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