Readout: Ericsson's Mobility Report June 2024

 

It has been a few years now, since Ericsson has taken to provide a yearly report on their view of the evolution of connectivity. Alike Cisco's annual internet report, it provides interesting data points on telecom technology and services' maturity, but focused on cellular technology, lately embracing fixed-wireless access and non terrestrial networks as well. 

In this year's edition, a few elements caught my attention:

• Devices supporting network slicing are few and far in-between. Only iOS 17 and Android 13 support some capabilities to indicate slicing parameters to their underlying applications. These devices are the higher end latest smartphones, so it is no wonder that 5G Stand Alone is late in delivering on its promises, if end to end slicing is only possible for a small fraction of customers. It is still possible to deploy slicing without device support, but there are limitations, most notably slicing per content / service, while slicing per device or subscriber profile is possible.
  
  
• RedCap (5G reduced Capability) for IoT, wearables, sensors, etc... is making its appearance on the networks, mostly as demo and trials at this stage. The first devices are unlikely to emerge in mass market availability until end of next year.
  
  
• Unsurprisingly, mobile data traffic is still growing, albeit at a lower rate than previously reported with a 25% yearly growth rate or just over 6% quarterly. The growth is mostly due to smartphones and 5G penetration and video consumption, accounting for about 73% of the traffic. This traffic data includes Fixed Wireless Access, although it is not broken down. The rollout of 5G, particularly in mid-band, together with carrier aggregation has allowed mobile network operators to efficiently compete with fixed broadband operators with FWA. FWA's growth, in my mind is the first successful application of 5G as a differentiated connectivity product. As devices and modems supporting slicing appear, more sophisticated connectivity and pricing models can be implemented. FWA price packages differ markedly from mobile data plans. The former are mostly speed based, emulating cable and fibre offering, whereas the latter are usually all you can eat best effort connectivity.
  
  
• Where the traffic growth projections become murky, is with the impact of XR services. Mixed, augmented, virtual reality services haven't really taken off yet, but their possible impact on traffic mix and network load can be immense. XR requires a number of technologies to reach maturity at the same time (bendable / transparent screens, low power, portable, heat efficient batteries, low latency / high compute on device / at the edge, high down/ up link capabilities, deterministic mash latency over an area...) to reach mass market and we are still some ways away from it in my opinion.
  
  
• Differential connectivity for cellular services is a long standing subject of interest of mine. My opinion remains the same: "The promise and business case of 5G was supposed to revolve around new connectivity services. Until now, essentially, whether you have a smartphone, a tablet, a laptop, a connected car, an industrial robot and whether you are a working from home or road warrior professional, all connectivity products are really the same. The only variable are the price and coverage.
  
  5G was supposed to offer connectivity products that could be adapted to different device types, verticals and industries, geographies, vehicles, drones,... The 5G business case hinges on enterprises, verticals and government adoption and willingness to pay for enhanced connectivity services. By and large, this hasn't happened yet. There are several reasons for this, the main one being that to enable these, a network overall is necessary.
  
  First, a service-based architecture is necessary, comprising 5G Stand Alone, Telco cloud and Multi-Access Edge Computing (MEC), Service Management and Orchestration are necessary. Then, cloud-native RAN, either cloud RAN or Open RAN (but particularly the RAN Intelligent Controllers - RICs) would be useful. All this "plumbing" to enable end to end slicing, which in turn will create the capabilities to serve distinct and configurable connectivity products.
  
  But that's not all... A second issue is that although it is accepted wisdom that slicing will create connectivity products that enterprises and governments will be ready to pay for, there is little evidence of it today. One of the key differentiators of the "real" 5G and slicing will be deterministic speed and latency. While most actors of the market are ready to recognize that in principle a controllable latency would be valuable, no one really knows the incremental value of going from variable best effort to deterministic 100, 10 or 5 millisecond latency.
  
  The last hurdle, is the realization by network operators that Mercedes, Wallmart, 3M, Airbus... have a better understanding of their connectivity needs than any carrier and that they have skilled people able to design networks and connectivity services in WAN, cloud, private and cellular networks. All they need is access and a platform with APIs. A means to discover, reserve, design connectivity services on the operator's network will be necessary and the successful operators will understand that their network skillset might be useful for consumers and small / medium enterprises, but less so for large verticals, government and companies." Ericsson is keen to promote and sell the "plumbing" to enable this vision to MNOs, but will this be sufficient to fulfill the promise?
  
  
• Network APIs are a possible first step to open up the connectivity to third parties willing to program it. Network APIs is notably absent from the report, maybe due to the fact that the company announced a second impairment charge of 1.1B$ (after a 2.9B$ initial write off) in less than a year on the 6.2B$ acquisition of Vonage.
  
  
• Private networks are another highlighted trend in the report with a convincing example of an implementation with Northstar innovation program, in collaboration with Telia and Astazero. The implementation focuses on automotive applications, from autonomous vehicle, V2X connectivity, remote control... On paper, it delivers everything operators dream about when thinking of differentiated connectivity for verticals and industries. One has to wonder how much it costs and whether it is sustainable if most of the technology is provided by a single vendor.
  
  
• Open RAN and Programmable networks is showcased in AT&T's deal that I have previously reported and commented. There is no doubt that single vendor automation, programmability and open RAN can be implemented at scale. The terms of the deal with AT&T seem to indicate that it is a great cost benefit for them. We will have to measure the benefits as the changes are being rolled out in the coming years.

HPE acquires Juniper Networks

On January 8, the first rumors started to emerge that HPE was entering final discussions to acquire Juniper Networks for $13b. By January 9th, HPE announced that they have entered into a definitive agreement for the acquisition.

Juniper Networks, known for its high-performance networking equipment, has been a significant player in the networking and telecommunications sector. It specializes in routers, switches, network management software, network security products, and software-defined networking technology. HPE, on the other hand, has a broad portfolio that includes servers, storage, networking, consulting, and support services.

 The acquisition of Juniper Networks by HPE could be a strategic move to strengthen HPE’s position in the networking and telecommunications sector, diversify its product offerings, and enhance its ability to compete with other major players in the market such as Cisco.

Most analysis I have read so far have pointed out AIOps and Mist AI as the core thesis for acquisition, enabling HPE to bridge the gap between equipment vendor and solution vendor, particularly in the Telco space.

While this is certainly an aspect of the value that Juniper Networks would provide to HPE, I believe that the latest progress from Juniper Networks in Telco beyond transport, particularly as an early leader in the emerging field of RAN Intelligence and SMO (Service Management and Orchestration) was a key catalyst in HPE's interest.

After all, Juniper Networks has been a networking specialist and leader for a long time, from SDN, SD WAN, Optical to data center, wired and wireless networks. While the company has been making great progress there, gradually virtualizing  and cloudifying its routers, firewalls and gateway functions, no revolutionary technology has emerged there until the application of Machine Learning and predictive algorithms to the planning, configuration, deployment and management of transport networks.

What is new as well, is Juniper Networks' efforts to penetrate the telco functions domains, beyond transport. The key area ready for disruption has been the Radio Access Network (RAN), specifically with Open RAN becoming an increasingly relevant industry trend to pervade networks architecture, culminating with AT&T's selection of Ericsson last month to deploy Open RAN for $14B.

Open RAN offers disaggregation of the RAN, with potential multivendor implementations, benefitting from open standard interfaces. Juniper Networks, not a traditional RAN vendor, has been quick to capitalize on its AIOps expertise by jumping on the RAN Intelligence marketspace, creating one of the most advanced RAN Intelligent Controller (RIC) in the market and aggressively integrating with as many reputable RAN vendors as possible. This endeavor, opening up the multi billion $ RAN and SMO markets is pure software and heavily biased towards AI/ML for automation and prediction.

HPE has been heavily investing in the telco space of late, becoming a preferred supplier of Telco CaaS and Cloud Native Functions (CNF) physical infrastructures. What HPE has not been able to do, is creating software or becoming a credible solutions provider / integrator. The acquisition of Juniper Networks could help solve this. Just like Broadcom's acquisition of VMWare (another early RAN Intelligence leader), or Cisco's acquisition of Accedian, hardware vendors yearn to go up the value chain by acquiring software and automation vendors, giving them the capacity to provide integrated end to end solutions and to achieve synergies and economy of scale through vertical integration.

The playbook is not new, but this potential acquisition could signal a consolidation trend in the telecommunications and networking industry, suggesting a more competitive landscape with fewer but larger players. This could have far-reaching implications for customers, suppliers, and competitors alike.

Cisco VNI global IP 2014: we live in a video world

As is now usual, after the february mobile Visual Networking Index, Cisco releases in June the global IP version. Here are a few interesting measurements and forecasts and some associated thoughts.

Global IP traffic's growth is slowing down somewhat, having grown five fold in the last five years and anticipated to grow threefold over the next five. This is not overly surprising, a 21% CAGR is a sign of a maturing market.

CDN

Surprisingly, more than half of the traffic next year should be local (as opposed to long-haul), which underlines the growing importance of CDNs to deliver content at the edge of the network.
CDN delivered in 2013 36% of the data traffic and are set to deliver 55% by 2018, with a growth spurred by OTT video. CDNs will deliver the 67% of all video traffic from 53% today.
I think here, mobile CDNs are not represented, which is unsurprising since most of the movement in that space has happened only recently. Mobile carriers CDNs will add to these numbers.

Mobile

Cisco predicts that mobile traffic (including wifi) will exceed fixed by 2018 (61 to 39% vs. 44 to 56% in 2013). Again, not so surprising, except we could see in my opinion fixed being overcome earlier than that. Machine to machine traffic over wireless, I think, is quite systematically underestimated.

Mobile data traffic, unsurprisingly still sees a 61% CAGR and will increase eleven fold by 2018.

Video

Video traffic will account for 79% of overall IP traffic by 2018 (66% today). If we add TV and video, we are looking at 90%...

OTT video viewed on connected TVs, consoles, sticks, etc... doubled in 2013 and is set to quadruple by 2018. I believe this is also under-evaluated. I think 4k will weigh heavily on these media and h265 / vp9 will be late to assuage the burden.

All in all, no great surprise this year, a confirmation of last year's trends. I believe that 4k, together with changes in so-called "net neutrality" provisions will accelerate most trends by 1 to 2 years.

Yay! free mobile broadband for all: Cisco and Google

Cisco

I don't like blogging on Friday. You people's mind is already on week-end and you don't care as much for the joys and anguish of the OTT video industry. I couldn't help it today, though...

Cisco VNI 2013 mobile video growth

As Cisco released the latest iteration of its Visual Networking Index, its CEO, John Chambers predicted at "All things D" D11 conference that improvements in mobile networks architecture and topology will progressively reduce costs and that mobile data will become free...
Not less expensive, inexpensive or cheap... free.
Wow, I am not sure how that happens. With the industry spending $300+ billions per year to increase networks capacity, and signs that LTE might need an LTE Advanced injection sooner than anticipated, the comment seems curious.
Cisco wants, like most of the enterprise vendors in the market to make wireless networks more IT than Telco. That means less differentiated boxes, more i/o, more centralized control, no proprietary interfaces, hardware, protocols. 
This is a good aim, but the reason why the Telco market has been historically highly proprietary has as much to do with its idiosyncrasies and politics (GSM, TDMA, CDMA, WIMAX, WCDMA, LTE FDD and TDD...IMS) than vendors. "Standards" have emerged by necessity but have always been the smallest common denominator for networks and functions to behave, leaving wide margin for vendor differentiation and proprietary "enhancements". That needs to be resolved first before you can see costs come down. At last, costs coming down do not necessarily equate prices going down... unless content starts to subsidize bandwidth like YouTube / Netflix with internet backbone. Talking about Google/YouTube....

Google

This week as well, Google made the headlines, speaking to the Wall Street Journal. The company was quoted having plans to deploy and operate wireless networks in Sub Saharan Africa and South East Asia. Orange CEO was boasting having made Google pay for traffic in Africa in February, that was a short victory.
After subsidizing internet infrastructure for YouTube traffic, implementing large scale wifi and fiber networks, Google is to build and operate wireless networks.The idea is that Google would build these networks to provide wireless broadband services that are proving to be great enhancements in people's quality of life, communication and prosperity, such as watching cats fall off TV sets on YouTube or playing massive multiplayer online games on Facebook.
More seriously, the implications of this move are tremendous. Google could have a completely integrated vertical content delivery form creation, to aggregation, to delivery and display. What will Google want in exchange for these investments? Maybe nothing, the CEO was quoted several times having Google working on wide ranging non-profit goals....
But then again, indirectly, maybe you will need an Android device to access these networks, or maybe Google talk, chat... will be free on these networks, but you will have top pay to use other apps or services...
Certainly, connecting the next billion subscribers to wireless broadband for free is an inspiring goal. The skeptics and cynics will see here another way to dominate a market by vertical integration.

Jury is out, but if you are a wireless network operator in these regions, you better start thinking about what that could mean to your business.

Video optimization 2.0, market reset

On the heels of broadband traffic management's show in London last week, I thought it was time to take stock of that market segment as most vendors have launched their second generation product recently.

The market leader, Bytemobile (with 55% market share of deployments), started the trend this summer, when launching their new dedicated appliance, the T-3000. While this is not strictly a new version of their Unison product, it is a new computing platform sold as an appliance, departing from the software infrastructure business model. It is a first step towards solving some of the scalability issues experienced by the former solution, that saw dpi, policy, charging, web and video optimization inextricably amalgamated, whether you wanted to use all products or not. It gets rid as well of these expensive load balancers that were a high cost low yield proposition. Bytemobile is not the only one to experience price pressure and to take the knife to load balancing as the bandwidth requirements increase.

Mobixell, with 16% market share, seems to be at last in a position to digest their 724 solutions acquisition. While both product lines were quite complementary and had little overlap, it was a tough proposition for Mobixell to acquire 724, rationalize the technologies and workforce and face the ire of their traditional resellers and OEM (NSN, Huawei, Ericsson...). These were weary to see their supplier compete head to head with them in mobile broadband as Mobixell was rolling out 724 seamless gateway proposition along with their streaming and transcoding platform. The result saw Mobixell practice a tough price attrition in the market, helped by a low cost structure (724 solutions technology comes with integrated routing and inter process UDP-based communication that provides great scalability at low cost). Mobixell announced the launch of the new product release, called EVO, taking some of the computational power to the cloud. While some are skeptical about how much can be accomplished in the cloud for real time video optimization, it certainly is a good step towards cost and CAPEX containment worth exploring.

Flash networks with 8% has been quite busy on the market, silently plowing ahead, upgrading existing customers and winning a handful of deals. They have announced the new version of their product and are as well taking a big step in technology investment in that space.

Ortiva wireless with 3% market share has seen some very good progress this year, bagging some good high profile accounts, nearly tripling their year on year revenue, from an admittedly small footprint. The company has not announced a new version of their product yet, staying on their existing appliance model.

Skyfire labs, with 2% market share, a very innovative start up with a cloud based approach, evolved from their tablet and smartphone browsing app has also been able to grab some high profile tier 1 carrier, together with high profile VAR agreement with infrastructure vendors.

Openwave, with 1% market share, as you know, has had a very busy year on the corporate and financial front (here, here, here, and here), but has not announced much from a product, technology or customer standpoint. They are fighting for their survival and seem to be focusing to a return to financial stability (PS revenue increase, licensing of their patents to Microsoft) before investing further in technology or customer acquisition.

NSN has been developing their homegrown technology, wanting to end the reliance on their traditional partners in the space and came out with a very basic first attempt, focused around loss-less transmission. Nowadays, they are trying to push their "liquid" network concept and seem to be going at it in a fairly scattered manner.

These new product announcements signal, beyond the usual technology investment from start ups and established vendors, a market reaching a level of maturity fast, only 2 years after inception. Some might even say that this segment is commoditized before having really taken off. According to my calculations, this is a market that has generated about $90 millions for vendors this year. We can see from the number of players why price attrition plays an important role, even though traffic is increasing fast. We will see some consolidation and attrition in that space soon, as insufficiently capitalized vendors wont be able to sustain the market growth.

RGB networks, Juniper, Cisco, Huawei, Acision are all active in this space too, while others are preparing to enter the market. The market share are {Core Analysis} calculations, part of an upcoming report on the mobile video optimization space. Details and questions can be addressed here or at patrick.lopez@coreanalysis.ca.

Cisco to deliver "Wireless TV" to AT&T

In a press release dated Oct. 25, Cisco announced the newest addition to Videoscape product line:
the wireless TV solution, composed of a Cisco access point and wi-fi enabled receivers.

The solution is being rolled out first at AT&T Uverse customers and allows basically a centralized HD DVR operation distributed wirelessly to as many receivers and TVs in the house.

This launch is advertised as the industry's first wireless IPTV deployment. While the innovation is minor (adding wifi to a DVR is hardly exceptional), the in-home close network deployed by Cisco with the dedicated access point can have interesting developments.

Surely, as connected TVs start appearing and accessing OTT content, whoever is going to control the home gateway, including the wifi access is going to be able to manage and in some cases enforce access within a walled garden.

I might be cynical here, but i would not be surprised if the access point and the home network delivered by AT&T was somewhat restrictive in term of the content it delivers. It is probably dedicated only to the broadcasting managed services offered by AT&T and does not offer OTT access.

In that case, it would mean another box to manage in your home (the access point), and potentially interesting issues when it comes to you selecting which wifi network to connect to with your connected TV, Bluray, net box or unmanaged DVR.
It will be interesting to see how this new offering fares with AT&T customers.