March 10, 2017
Telecoms.com periodically invites expert third-party contributors to submit analysis on a key topic affecting the telco industry. In this article Bengt Nordstrom, CEO of telecoms consultancy Northstream, analyses the latest developments in the 5G standardization process.
The telecoms industry is buzzing with news and analysis on 5G – its capabilities, its impact on the industry and the roadmap that leads to commercial deployments.
The main 5G standardisation process is driven by the 3GPP, but as recently announced, there have been efforts to accelerate the schedule for trials and deployments of Non-Standalone 5G New Radio (NR). NR will use the existing LTE Evolved Packet Core (EPC) as the anchor for control and mobility management. Others are leading their own 5G efforts, with the likes of Verizon driving its 5G Technical Forum (V5GTF) initiative.
However, the timeline associated with these activities has conjured confusion for some in the industry. With timings for these efforts in mind, what’s with the rush? And do they create a potential division in the 5G standardisation process?
3GPP vs V5GTF
3GPP Release 15, which will introduce the first 5G NR specification called 5G Phase 1, is expected in mid-2018. 3GPP Release 16, or 5G Phase 2, will then bring the full 5G standard and is expected at the end of 2019. According to the current Release 15 timeline, the earliest deployments of 5G NR, based on standard-compliant 5G NR infrastructure and devices, will not be possible until 2020.
In light of this, a contingent of operators and vendors (including AT&T, NTT DOCOMO, Vodafone, Ericsson, Huawei, Deutsche Telekom) recently announced their collective support for the acceleration of the 5G NR standardisation schedule in order to enable large-scale trials and deployments of Non-Standalone 5G NR as early as 2019. This proposal introduces an intermediate milestone leading to the complete 5G standard.
Verizon, together with its V5GTF forum partners, including Nokia, Cisco and Intel, has been working on its own specification for fixed wireless access, which is not directly compatible, or easily upgradeable to the 5G standard being developed by the 3GPP. Verizon has already installed equipment for fixed wireless services based on this specification in more than 10 U.S. cities.
To better understand the reasons for these developments, we need to look at them in the context of overall market conditions.
Firstly, most operators are faced with increasing market saturation and are struggling to find new revenue streams. They are simultaneously experiencing price pressure and falling ARPU, which has led to capital expenditure (CAPEX) constraints. Beyond all the great promises of billions of connected devices and the Fixed Wireless Access (FWA) opportunity, there is a growing realism about how these promises would drive operators’ investments in the future. To upgrade mobile networks (core, radio and transmission) to 5G would require massive CAPEX investments that go significantly beyond the budgets that operators have today. Therefore, the most likely scenario for 5G introduction is a gradual process over the course of many years.
Secondly, the development of any standard is also an inherently long and gradual process. Not all features and specifications will be decided upon simultaneously. As such, Non-Standalone NR, which uses LTE functionality will allow operators to roll-out some 5G functionality before swapping out the EPC and LTE radio.
Thirdly, with the complex and interconnected legacy of any modern operator, shifting to a new generation technology poses a significant risk. By delaying that shift until the 5G standard is finalised, an operator may need to manage simultaneous transformations in several parts of the network. A gradual shift allows the operator to manage risks and complexities associated with a major swap.
What can operators expect?
From the operator’s perspective 5G promises to address many constraints, with spectrum and capacity limitations at the top of the list. The Non-Standalone NR approach, which will be forward-compatible with the full 5G standard, is an appropriate way to begin reaping the rewards of 5G technology without any disruption to the standardisation efforts under the 3GPP’s leadership.
The Non-Standalone approach is also attractive because it allows operators to start the gradual deployment of 5G in manageable chunks (both technically and financially). This enables them to address specific use cases such as FWA, massive MIMO, etc.; and to prepare their future investments according to market demand, as driven by NR-compliant device availability, which is likely to happen post-2020.
In contrast to Non-Standalone NR, the approach taken by Verizon and others under the 5GTF aimed to get a head start in developing technologies to primarily address the FWA opportunity in the USA. Competition for fixed broadband subscribers was a strong motivator. Verizon plans to commercially launch FWA this year, at least two years ahead of the Non-Standalone track. This advantage in time to market will be achieved by having a temporary ‘non-standard’ solution, which means that there will be some cost to adapt to 5G when it is released.
Since Verizon has limited its focus on the FWA use case, the cost to adapt to 5G will be relatively manageable; i.e. upgrading the radio components and potentially the CPEs, or switching to a new ‘5G’ ready CPE. In general, Verizon’s customers (mobile and fixed) are unlikely to suffer from Verizon’s approach.
In conclusion, the 5G standard is not under threat. If anything, the situation is much better than previous standardisation efforts which were mired in technology battles leading up to standards being settled. This time around, any adaptations seem to be within the same 5G family.
Bengt Nordstrom is CEO of strategic mobile telecoms consultancy Northstream, which he co-founded in 1998. A former CTO and Executive Director of Hong Kong mobile operator SmarTone, Bengt has also held senior management positions at Ericsson, Comviq and consultants Netcom. In addition, Bengt was a member of the Executive Committee of the GSM Association and chaired the GSMA’s Asia Pacific Interest Group.
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