While many of us were working from home during 2020, Mobile Carriers and Telecom vendors were busy launching commercial 5G networks.
Ericsson Mobility Report says that there are more than 100 commercial 5G networks and 220 million 5G subscriptions around the globe.
5G adoption is happening way faster than 4G back in 2009-2010. The same report projects 3.5 billion 5G subscriptions in 2026.
Majority of launched 5G networks in 2020 are utilizing NSA (Non Standalone Alone) architecture, i.e. existing 4G core network nodes handling 5G RAN and subscribers. (I’m going to write a separate post about architectural differences between 4G and 5G Cores)
2021 is a year of 5G SA (Standalone) networks deployment on a large scale. Some Early Adopters have done that already. Many more to come.
So, what challenges ICT providers and vendors are facing from 5G Core deployment perspective?
- Scalability. Mobile network data traffic grew 50 percent between Q3 2019 and Q3 2020. There is no sign that this trend will change any time soon. Add here much higher 5G Mobile Broadband speed for consumers. A lot of compute and network capacity is required to process this vast amount of traffic.
- Elasticity. 5G Core architecture allows now to build highly elastic applications capable for fast horizontal scaling. Infrastructure should support it. It just doesn’t make sense to provision capacity for peak hours traffic as we did it for 3G and 4G Core networks.
- Automation. Amount of Network Functions and their instances is so huge, that automation became mandatory requirement. Automated lifecycle and service discovery should be part of infrastructure design.
Hmmm… Sound like Cloud can help, isn’t it?
Indeed, there was a wave of acquisitions and partnership announcements during 2020:
- Microsoft acquired Affirmed networks
- Ericsson, Amazon Web Services and Telefonica are building 5G Core together
- Nokia and Google Cloud announced strategic collaboration
Key 5G ecosystem players selected partners among Cloud providers. Now vendors should address technical challenge – test, certify and polish 5G Core products on selected platforms.
Commercial challenge is different. Vendors should come up with new pricing model. The legacy one is based on amount of subscribers and hardware capacity, it is not applicable for “pay-as-you-go” Cloud financial model. I’m personally curious to see how 5G Core commercial offer and deal structure looks like.
The battle plan for 5G Core is ready now.
Consolidation of Telecom industry continues. In 4G era there were 7-10 major vendors, today this number shrank to 4-5. So, it is good that new players are coming on board.
What does it mean in long term?
First of all, Cloud providers are part of telecom world now. They will inevitably influence overall ICT industry path. Check out my previous article to get more insight on it.
Second, we should expect 5G Core vendors start to refactor Telco applications to utilize managed Cloud services.
Last but not least, we maybe will see All-in-Cloud Mobile providers, like we see it in Banking industry.
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