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Operator Transitions to 5G SA Core Decline YoY in 2023

  • Operator migrations to 5G SA remained low in 2023, despite more than 60 operators investing.
  • Asia-Pacific continued to lead the deployment charts, while Europe gained momentum.
  • Total number of deployments between 2020 and 2023 reached 55.
  • Key deals in leading markets helped Ericsson maintain top spot, followed by Nokia, Huawei and ZTE.

Seoul, Beijing, Boston, Buenos Aires, Fort Collins, Hong Kong, London, New Delhi – February 29, 2024

The number of mobile operators transitioning to a dedicated 5G core decreased to 12 in 2023. Although numerous operators have been running 5G SA core pilots, they have yet to move forward with the transition because they believe the existing architecture is sufficient to meet the current network demand. Another reason for the staggered deployment is the prevailing macroeconomic headwinds and lack of monetization opportunities with 5G.

The transition should increase following the introduction of 5G Advanced starting in 2025, which promises a plethora of new features that will help improve device and network capabilities, lower OPEX costs and introduce new use cases. However, operators need to urgently prioritize the deployment of 5G SA cores to maximize the potential offered by 5G Advanced.

The delay in turning on 5G SA implies that we might see a bunch of rollouts in a shorter time starting H2 2024 and running into 2025, rather than steady rollouts spread out across the next three to four years.

The gradual penetration of 5G SA into Tier-2 operators and nations with smaller geographic areas appears to have begun as MNOs seek to improve user experience. According to Counterpoint Research, about 30 nations have at least one operator running a 5G SA network commercially. Counterpoint Research forecasts that transitions in H1 2024 will remain sluggish before gaining momentum in H2 2024, which will continue into 2025.

Cumulative 5G SA Commercial Deployments by Region by 2023
Exhibit 1: 5G SA Deployments by Region, by 2023

As indicated in Exhibit 1, the Asia-Pacific region had the highest number of deployments, followed by Europe. North America, Middle East and Africa, and Latin America trailing behind.

Key Points

Key points discussed in the report include:

  • Operators – 55 operators have commercially implemented 5G SA, with many more in the testing and trial stages. We are seeing a mix of countries adopting 5G Standalone, with some Tier-2 carriers in LATAM launching 5G SA services. The rate of deployment was slightly faster in H2 2023, with some important Tier-1 operators in developed nations shifting to 5G SA, although the list of MNOs currently in the trial phase is still quite extensive.
  • Vendors – Ericsson’s role as a leader in 5G SA is expanding, and the Swedish company has the largest market share among all cloud-native core providers. Nokia follows Ericsson in terms of the number of deployments of its 5G core. Both have a considerable number of vendor deals with operators that have not yet been commercialized. South Korea’s Samsung and Japan’s NEC are primarily focused on their respective domestic markets, but they are expanding their reach to Tier-2 operators as the focus shifts to vRAN and Open RAN solutions while emerging vendors Parallel Wireless and Mavenir are collaborating with operators in Europe, the Middle East, and Africa.
  • Spectrum – Most operators are installing 5G at mid-band frequencies (n78), which give higher speeds and better coverage. Some operators have also started offering commercial services in the mmWave wave n258 bands. FWA and other eMBB are currently the most common use cases, although edge services and network slicing are also gaining traction.
  • Use Cases – Operators are looking for ways to monetize 5G services, as they are struggling to make the ROI from their investments in 5G. Globally, operators are trying to extract better returns from consumer networks before taking their 5G services deeper into enterprises. Although FWA is a promising application for 5G SA monetization, there are many other use cases that operators can look into to increase their ROI, including network slicing, live broadcasting, XR applications, and private networks.

Report Overview:

Counterpoint Research’s 5G SA Core Tracker, January 2024 is a culmination of an extensive study of the 5G SA core market. It provides details of all operators with 5G SA cores in commercial operation at the end of 2023, covering market share by region, vendor, and the most popular deployed frequency bands. Further, the tracker provides details about the 5G SA vendor ecosystem split into two categories – public operator and private network markets and touches on the potential monetization opportunities for telecom operators across different domains and use cases.

Table of Contents:

  • Overview
  • Market Update
  • 5G SA Market Deployments
    • Commercial Deployment by Operators
    • Network Engagements by Region
    • Network Engagements by Deployments Status
    • Leading 5G Core Vendors
    • Mobile Core Vendor Ecosystem
    • 5G Core Vendors Market Landscape
  • Outlook
  • 5G Standalone Use Cases – Consumer and Enterprise

Background

Counterpoint Technology Market Research is a global research firm specializing in products in the TMT (technology, media and telecom) industry. It services major technology and financial firms with a mix of monthly reports, customized projects and detailed analyses of the mobile and technology markets. Its key analysts are seasoned experts in the high-tech industry.

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press(at)counterpointresearch.com

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LeapFrog Semiconductor develops RISC-V based AI-enhanced DSP for Wireless Infrastructure

Virtually all commercial open RAN deployments to date have used COTS server hardware based on Intel’s x86-based compute with or without FPGA hardware acceleration. While x86-based platforms are adequate for initial prototyping and low bandwidth deployments without acceleration, they are, however, expensive, power-hungry and highly inefficient for high-traffic, low-latency use cases requiring FPGA acceleration. Hence not the best choice for deployment at scale.

Open RAN’s Massive MIMO Challenge

Solving the massive MIMO performance deficit is one of the key issues inhibiting an industry wide transition to open RAN. This challenge must be resolved before mainstream adoption of massive MIMO radios can occur. However, this will require a new breed of merchant silicon solutions designed specifically to efficiently process real-time, latency-sensitive Layer-1 workloads such as beamforming, channel coding, etc.

In early 2023, a number of vendors demonstrated alternatives to Intel’s x86 platform at MWC in Barcelona based on ASICs, GPUs as well as RISC-V architectures. Late last year, an interesting new contender – LeapFrog Semiconductor – appeared on the market. 

LeapFrog’s RISC-V Based Modular, Customizable And First Truly Software Defined Layer-1 Solution

LeapFrog Semiconductor is an early-stage fabless semiconductor company focused solely on developing next-generation Layer-1 silicon and software solutions for the mobile infrastructure and enterprise markets. Founded in 2020, it is funded and staffed by seasoned semiconductor veterans.

The San Diego-based start-up has developed a unique AI-enhanced DSP-based silicon platform based on the RISC-V architecture as well as a Network-on-Chip silicon design. The  result is a multi-core, distributed 5G RAN silicon platform, which is modular, customizable and flexible, thus creating the first truly software defined, AI-enhanced RAN solution.

LeapFrog’s DSP Chip

Known as the LeapFrog Processing Unit (LPU), LeapFrog’s DSP core uses a specialized Instruction Set Architecture (ISA) developed in-house that natively supports fine-grain parallelism. This means that Layer-1 computation is broken down into a large number of small tasks, resulting in a high level of parallelism. Together with its programmable NOC architecture which minimises communication and synchronization overheads, LeapFrog’s Layer-1 chip results in several unique benefits:

  • Power and area efficient design – LeapFrog claims that its SoC is significantly smaller than rival designs and boasts single-digit (<10W) power consumption.
  • Software-based Layer-1 solutions – LeapFrog’s RU and DU Layer-1 solutions are 100% software-based and are thus fully programmable, with no requirements for hardware-based accelerators.
  • AI-enhanced L1 chip solution – the LeapFrog chip includes in-line processing of AI and L1 algorithms, which includes AI-based channel estimation and other L1 algorithms. This results in a low-latency chip solution and hence improved RAN system performance.
  • Tile and chiplet-based silicon design – resulting in a scalable, customizable and modular design which can be optimized for different deployment scenarios. For example, chiplets can be combined to make different functions such as L1, I/O, CPU, etc.

In contrast, many rival open RAN chip designs currently under development are based on coarse-grained parallelism, thus necessitating the use of hardware accelerators or hard IP blocks. These designs are not as scalable as LeapFrog’s solution and offer very little flexibility with respect to changes in the computation logic. As a result, a new chip tape-out would be needed if any architectural or logic changes are required.

LeapFrog Network-on-Chip (LNOC)

LeapFrog has also developed a highly power efficient, programmable LeapFrog Network-on-Chip (LNOC) chip design which connects multiple LPUs to create a multi-core, distributed 5G RAN silicon platform. Leveraging innovations in chiplet and Die2Die (D2D) technologies, this results in a highly scalable, modular and flexible chip design complying with all 5G O-RAN specifications (Exhibit 1).

©Leapfrog Semiconductor

Exhibit 1: LeapFrog Semiconductor’s RISC-V 5G Layer 1 Silicon Architecture

LeapFrog believes that its LNOC design is currently the only chiplet-based 5G open RAN chip platform with a fully software-based RU and DU L1 solution that can be easily customized to suit different 5G deployment scenarios.  In addition, the company claims that its AI-enhanced L1 solution results in 50% to 100% better system performance and 10x lower cost and power compared to existing open RAN RU and DU platforms. Another benefit is that software development and testing can be performed on an FPGA platform, which is then transferred to LeapFrog’s silicon platform. This allows a faster time-to-market compared to alternative designs from other vendors. 

Target Markets

LeapFrog is targeting multiple markets with its unique LPU design. Chiplet based productization allows the same platform to scale all the way from small cell, fixed wireless access (FWA) to macro cell RU and DU market with a major focus on massive MIMO networks. Potential customers include small and large 5G infrastructure vendors, greenfield CSPs as well as hyperscalers. The company is also pursuing an IP licensing model for its general-purpose DSP targeting consumer/industrial IoT modems, wireless CPEs/gateways, automotive connectivity/sensor fusion as well as mobile handset modems. The IP is ready on FPGA now and was recently demonstrated at the India Mobile Congress and the RISC-V Summit in 2023. The chip design was tested in H2 2023 and delivery of samples to customers is expected to start in Q2 2024.

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Ericsson, Nokia, Samsung Witness 2023 Revenue Slump to Mark 5G Era’s First Record Low Year

  • Ericsson, Nokia and Samsung reported a slump in 2023 revenue after hitting a peak in 2022.
  • Operators worldwide have been judicious in their spending and inventory management.
  • Uncertainty remains as the industry shows no immediate signs of revival in 2024.

Ericsson, Nokia and Samsung each announced a drop in overall 2023 sales in their earnings calls, citing macroeconomic challenges and a shrinking mobile network infrastructure market, as well as lower spending by operators, particularly in North America.

India was a silver lining for the Nordic vendors, as the unprecedentedly quick rollouts boosted their overall numbers. However, there was a slowdown among Indian operators during Q4 2023, as they plan to normalize their investments in 2024 following a capex-intensive 2023.

In 2023, suppliers made significant strategic decisions to reduce losses caused by external factors and transfer attention back to their core capabilities and cash-generating business sectors.

For the year 2023, Ericsson generated nearly $24.8 billion in revenue while its Finnish counterpart Nokia generated $24.1 billion in revenue. Samsung’s network division sales stood at $2.9 billion. Due to the changes in the business mix, its margin remained deflated.

Ericsson

  • Early adopters of 5G technology saw decreased sales, leading to a reported decline in revenue for Ericsson. MNOs in these areas continued to digest inventory and remained cautious with their spending.
  • Ericsson maintained its leadership in 5G Standalone deployments. Meanwhile, its cloud and network services business revenue remained unchanged YoY as the increase was offset in part by the decreased managed service revenues because of descoping and contract exits.

Enterprise Wireless Solutions (Cradlepoint) and the newly acquired Global Communication Platform Vonage helped drive growth in the enterprise category. Ericsson’s expansion into Enterprises will continue as it has made investments toward the development of the Global Networks Platform for Network APIs, which is viewed as a critical component in opening new revenue streams for customers.

Two charts showing Ericsson's Revenue by Segment & Region, 2022 vs 2023

Nokia

  • Nokia’s Mobile Network business had aimed for a resilient performance in 2023, despite the uncertain and challenging conditions in the worldwide RAN market. By the end of 2023, gross margin had improved significantly due to a shift in product mix towards software.
  • Nokia’s Cloud and Network Services business’ net sales were flat for the year but operating profit and margin improved due to digital asset sales and hedging. Nokia ranked second behind Ericsson in terms of the number of 5G Standalone core deployments.
  • The Network Infrastructure segment too saw revenue declines due to macroeconomic uncertainty and client inventory digestion. There was an increase in order intake in Q4 2023, which will be critical going into 2024. The performance of fixed, IP, and submarine networks deteriorated in 2023, while optical networks experienced small single-digit gains. Nokia anticipates some relief in H2 2024.
  • In 2023, revenue from enterprise customers increased by about 15% to $2.46 billion, with 151 new clients joining. Momentum in private networks continued with Nokia catering to more than 710 private wireless clients.

Two charts showing Nokia's Revenue by Segment & Region, 2022 vs 2023

Samsung

  • In 2023, the South Korean technological leader reported $2.9 billion in revenue, down from $4.2 billion a year ago.
  • Samsung saw similar consequences as its Nordic peers, but it remains optimistic about landing key deals for vRAN and Open RAN networks in 2024. Samsung has been a big player in this area with a few greenfield and brownfield deployments in North America and Japan.

Key Takeaways

2023 was a challenging year for network equipment makers. Operators around the world are exercising extreme prudence and judiciousness when it comes to network expenditure.

The industry also saw a big event at the end of the year, with Ericsson signing a $14 billion deal with AT&T to become the provider of its Open RAN-compliant equipment, effectively reducing Nokia’s market share in the NAM region.

Suppliers are certain that demand will rise and market spending will stabilize as a result of capacity requirements, emerging use-cases, more data traffic, and the integration of more mid-band radios, but the timeline remains uncertain.

Operators and manufacturers are also putting a lot of effort toward enabling 5G Standalone, incorporating Open architecture into their network infrastructure, and monetizing 5G services. Tier-1 MNOs in several countries have risen to prominence as 5G FWA has grown in popularity, but they are yet to capitalize on URLLC or mMTC use cases.

Another significant aspect that has been identified as critical in effectively monetizing 5G networks is the ability to provide users with premium access while also improving their experience through network slicing and enhanced UE Route Selection Policy. However, these are actionable items for the future that will provide results in the long run.

The short-term gains will come from efficient cost reductions and relevant automation that can standardize operations to make them more efficient, continued investments in and divestitures from core competencies, and attempts to capture any new emerging markets that may open as a result of geopolitical sanctions on Chinese vendors.

On the other hand, operators will undoubtedly play a critical role in recovering the RAN market. However, these operators currently show no signs of an early revival in their market forecasts as they wait for the ecosystem to further develop before deploying their infrastructure.

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Rapid Transition To L4 Automation Key To Successful 5G Network Monetization

Despite huge investments in 5G, network operators are still highly reliant on revenues from traditional voice and broadband data services and are struggling to increase ARPU. With 5G Advanced around the corner, they will need to continue investing heavily in new network infrastructure for many years to come, despite rising debt levels. As a result, the business models of many of these operators risk becoming unsustainable unless major changes are made.

Overcoming Operator Challenges

To survive financially and benefit from their 5G investments, operators need to develop new revenue streams while reducing OPEX costs. To achieve this, they need to radically transform the way they operate their networks. Instead of a fixed architecture, a fully flexible and agile service platform is required with the capability of delivering a wide variety of services on-demand. This means that networks need to be cloud-based, software defined, highly programmable and ultimately completely automated. By making their networks agile, operators will be able to deliver a huge variety of services with user experiences and connectivity dynamically tailored to individual use cases, or even individual users. Over the next few years, Counterpoint Research believes that AL/ML driven automation will play a critical role in facilitating this business model transformation, allowing operators to develop new revenue streams while significantly reducing OPEX costs.

Transition to L4 Automation

Autonomous networks are networks that can run with minimal (and ultimately zero, i.e. zero-touch) human intervention while leveraging technologies such as AI, machine learning and edge computing. Operators have already started the journey to automation, which they plan to implement in stages. For example, most Tier-1 operators have reached either Level 2 or Level 3 and many plan to reach Level 4 automation by the end of 2025/26.

Compared to L3 automation, L4 offers many new features and capabilities. With L3 networks, O&M updates are implemented into the network manually and run to gauge the network’s response. This typically involves multiple iterations. In contrast, L4 automation offers the capability of using a digital twin, i.e. a virtual or digital copy of the physical network. This is essentially a simulation environment which enables network changes to be run hundreds of times in isolation, enabling the optimum parameters to be identified before they are implemented into the physical network.

L4 automation also enables improved data collection processes allowing operators to have greater visibility into the network. For example, L4 offers the ability to collect more data from a base station compared to L3. L4 can also collect data more frequently. As a result, L4 automation can offer predictive and preventative capabilities, where potential faults are identified and rectified, thus ensuring that base stations are always online. Operators typically do not want to implement automation for everything, with most focusing on two processes: network deployment and fault monitoring and maintenance.

Huawei’s RAN Digital Twin

Huawei has developed a RAN Digital Twin System (RDTS) which is used in conjunction with its IntelligentRAN architecture to leverage the new capabilities of L4 automation. Central to its operation are the following four new innovative features:

  • Improved Data Collection – it typically takes around 15 to 30 minutes to collect historical data on a conventional mobile network. By implementing L4, Huawei is able to do this in around 10-200ms, i.e. effectively in real-time.
  • Predictive O&M Capabilities – maintenance costs can be significantly reduced by using RDTS. For example, RDTS enables operators to predict equipment failures due to overheating boards and detect faults in optical modules and back-up power supplies by up to seven days in advance. Faults can thus be rectified before they disrupt network operations. In contrast, a conventional network may require 4+ hour post processing after a fault is rectified in the field.
  • Transition from KPIs to SLAs (Service Level Agreements) – using the RDTS enables operators to offer SLAs to their customers, resulting in new business opportunities and higher revenues.
  • Single To Multiple Target Optimization – conventional networks can only handle single target optimization, for example, energy efficiency. However, by using the RDTS, Huawei’s IntelligentRAN is able to perform multiple target optimization, for example, simultaneously optimizing energy efficiency and user experience.

IntelligentRAN L4 i-series solutions

In early 2023, Huawei launched its 3-layer, hierarchical IntelligentRAN architecture which has been deployed to date by more than 30 operators worldwide. IntelligentRAN enables the key capabilities of L4 autonomous networks to be realised. This includes intent-driven networking, intelligent sensing, multi-target decision optimization and proactive/predictive O&M. At its recent Global Mobile Broadband Forum in Dubai, Huawei announced three additional L4 i-series solutions:

  • iLiveStreaming – by means of dynamic allocation of time, frequency and space resources coupled with intelligent SLA trend prediction, Huawei is able to offer deterministic experience assurance delivering a reliability higher than 95% for uplink livestreaming.
  • iKeyEvent – using spatiotemporal traffic prediction technology, iKeyEvent enables network risks to be identified and hence predicted and monitored at big events such as major sports meetings. Emergency plans are then generated automatically and the control loop-closed within seconds.
  • iPowerStar – uses intelligent algorithms to manage end-to-end energy consumption across multiple network channels, including the time, space, frequency and power domains. Multi-target optimization helps operators minimise energy consumption without compromising on network performance or user experience. Huawei claims that iPowerStar reduces carbon emissions by 30%.

Operator Examples

In recent months, Huawei has demonstrated the benefits of using the RDTS system operating within its IntelligentRAN architecture with several of its operator partners. For example:

  • In the Middle East – Huawei demonstrated how the RDTS eliminates the need to perform multiple iterations on a live network (typically 20+ times with conventional O&M over 20 days) to just once with a RDTS network. Huawei claims that this enables operators to deploy new features and services ten times faster than with conventional O&M.
  • In China – by using Huawei’s RDTS in conjunction with its IntelligentRAN system, a Chinese operator was able to reduce the number of O&M site visits from 29,000 to 780 visits per year. According to Huawei, this reduces maintenance inspection and passive analysis costs by up to 90%.
  • In Europe – guaranteeing the performance of a live streaming service is very challenging. Prior to using RDTS, an European operator was able to get a 5 times package gain compared to the traditional streaming package. However, by implementing Huawei’s Live Streaming Solution, the operator was able to increase its SLA assurance from 50% to 90% enabling it to generate $200 per hour per package compared to the original $40 live streaming package. This certainty of guaranteed service experience will open up new business opportunities for operators.

Viewpoint

The business models of many network operators risk become unsustainable unless they fully embrace automation. L4 autonomous networks will allow operators to deliver an experience that is far better than with previous generations of mobile networks. With L4, intent-driven networking replaces policy-based network management, deterministic service assurance replaces best-efforts approaches while proactive O&M (leveraging predictive/preventive capabilities) is used instead of responsive O&M. Together, these new capabilities will enable operators to significantly reduce OPEX costs as well as generate new revenues.

However, there are still challenges ahead. Standards, or specifically a lack of collaboration among standards bodies and open-source groups, is perhaps the biggest challenge. In particular, the industry needs to define data standards and formats. Another challenge is transforming company culture and skills, for example, with respect to network operations personnel. Linked with culture and skills is a lack of a common understanding of key technologies: for example, is there a precise, industry agreed definition for intent-driven management? The development of open APIs will also be very important. Collaboration with industry and ecosystem partners, including device manufacturers, equipment suppliers and developers will be essential in order to bring the economies of scale needed to benefit all players.

This blog is sponsored by Huawei.

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Selected Highlights from ITU’s WRC-23 Meeting In Dubai

Held every four years, the ITU’s World Radio Conference (WRC) came to an end last week. During the 4-week long conference, 43 new resolutions were approved, 56 existing ones were revised while 33 resolutions were suppressed. Key highlights included:

  • 4G/5G Spectrum – WRC-23 identified spectrum for 4G and 5G which will be crucial for expanding broadband connectivity and developing mobile services. The new spectrum includes the 3,300-3,400MHz, 3,600-3,800MHz, 4,800-4,990MHz and 6,425-7,125MHz frequency bands in various countries and regions.In particular, the decision  to set aside the 6.425-7.125GHz band for licensed, mobile operations and to harmonise this band is very important for the mobile community. The 6GHz band is the only remaining midband spectrum currently available to respond to the data traffic growth in the 5G-Advanced era and is critical for manufacturers of the 6GHz equipment ecosystem.However, a  compromise was adopted in ITU Region 1 and Region 3, which means that the 6,425-7,125MHz band can also be used by Wi-Fi. Individual administrations will have the freedom to decide what happens in this frequency range.
  • HIBS spectrum – WRC-23 also identified the 2GHz and 2.6GHz bands for using high-altitude platform stations as IMT base stations (HIBS) and established regulations for their operations. This technology offers a new platform to provide mobile broadband with minimal infrastructure using the same frequencies and devices as IMT mobile networks. HIBS can contribute to bridging the digital divide in remote and rural areas and maintain connectivity during disasters.
  • Low-bands – WRC-23 also defined mobile use of more low-band spectrum in the 470-694MHz band in the EMEA region (Europe, the Middle East and Africa).In the UK, Ofcom has already released spectrum down to the 700MHz (694-790MHz) band for use by mobile networks, by shifting Digital Terrestrial TV (DTV) services into the 600MHz band and lower (starting around 470MHz). DTV is going to be around for a number of years yet, but once it does end (i.e. once people have shifted to broadband-based TV) then it looks increasingly likely that the bands will be used for mobile.
  • 6G Spectrum – prior to the start of WRC-23, the ITU adopted a resolution intended to guide the development of a 6G standard. During the conference, regulators agreed to study the 7-8.5GHz band for 6G in time for the next ITU conference in 2027. That spectrum band aligns with proposals from major incumbents for early 6G operations at spectrum bands between 7GHz and 20GHz.

The full version of this insight report, including a complete set of analyst takeaways, is published in the following report, available to clients of Counterpoint Research’s 5G Network Infrastructure Service (5GNI).

Report: Highlights from ITU’s WRC-23 Meeting In Dubai

Table of Contents

  • Key Highlights
  • Mobile Agreements
  • 5G Spectrum
  • 6G Spectrum
  • Terrestrial Broadcast Agreements
  • Satellite Agreements
  • Other Agreements
  • Analyst Viewpoint

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Mobile Operators to Invest Over $30 Billion in Open RAN Networks by 2030

  • Accelerated growth is expected from 2025 onwards after stagnation in 2023 and 2024.
  • Open RAN network investments to grow at a CAGR of 24% during the forecast period.
  • Asia-Pacific and North America will remain the largest Open RAN markets in the forecast period.
  • Europe is expected to record the fastest growth with a CAGR of 108% during 2023-2030.

Open RAN network investments have increased steadily in recent years, driven primarily by greenfield network operators in the Asia-Pacific and North American regions. However, following this period of rapid network build-outs, greenfield operators are looking to lower capex in 2023 and 2024 and focus on network monetization. Some Tier-1 operators, notably Vodafone, have announced major plans recently to deploy open RAN, but most brownfield network operators remain very cautious about additional investments in 5G infrastructure, particularly Open RAN, due to the uncertain macroeconomic climate.

As a result, Counterpoint Research expects that the Open RAN market will stagnate during this and the next year. Investments will start to increase YoY after 2025 with network operators investing a cumulative total of more than $30 billion between 2022 and 2030. This represents a CAGR of 24% for the forecast period of 2023-2030.

A graphic showing an expected growth in Open RAN by 2030

Although the Asia-Pacific and North American regions will remain the largest Open RAN markets for most of the forecast period, Europe is expected to record the fastest growth with a CAGR of 108% between 2023 and 2030 as its Tier-1s finally start commercial deployments at scale, driven partly by the need to replace legacy Chinese 3G and 4G networks.

The Open RAN-compliant radio market to date has been dominated by Asian vendors Samsung, NEC and Fujitsu. However, Counterpoint Research expects that their market share will be impacted during the forecast period as other incumbents start offering Open RAN-compliant solutions.

Counterpoint Research’s recently published Open RAN Tracker is the culmination of an extensive study on the Open RAN market. The tracker provides details of all operators across different regions, covering both trial and commercially deployed networks, and market shares by region and by vendor.

Background 

Counterpoint Technology Market Research is a global research firm specializing in products in the TMT (technology, media and telecom) industry. It services major technology and financial firms with a mix of monthly reports, customized projects and detailed analyses of the mobile and technology markets. Its key analysts are seasoned experts in the high-tech industry.

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3GPP 5G NTN Standards Set To Dramatically Boost Mobile Satellite Addressable Market

Satellite communications is back in the limelight following the launch of Apple’s direct Satellite-to-Phone service earlier this year. Partnering with satellite operator Globalstar, the service provides SOS messaging for iPhone 14/15 users. Recently, the service was expanded to include roadside assistance via satellite as well. A host of similar services and partnerships have been announced between satellite operators and chip vendors/cellular operators during the past few months, including Inmarsat with Mediatek, Iridium with Qualcomm and most recently SpaceX with KDDI.

In addition to the incumbent operators, there are a number of new players such as AST SpaceMobile and Lynk Global. AST SpaceMobile has partnered with Rakuten Mobile and currently has one operational satellite in-orbit. It has been granted preliminary experimental licenses in Japan and in the US. Meanwhile Lynk launched a limited commercial “store-and-forward” service using three satellites in April. Both companies plan to launch full constellations over the next few years.

The Mobile Satellite Services (MSS) market has historically been a niche market due primarily to the fact that MSS is based on proprietary technologies. However, 3GPP is working with the satellite industry on a global standardized solution, called 5G Non-Terrestrial Networks (NTN). 5G NTN will enable seamless roaming between terrestrial and satellite networks, using largely standard cellular devices, i.e., eliminating the need for proprietary terminals and fragmented satellite constellations. This could dramatically increase the addressable market for mobile satellite services.

5G Non-Terrestrial Networks (NTN)

With the emergence of new Satellite-to-Phone services, there is now a widespread industry push to deploy NTN-based satellite networks as this would benefit the satellite industry and the wider mobile industry. However, 3GPP has been working on NTN for some time. For example, there has been an ongoing study on 5G NTN since 3GPP Release 15, while in 2022, 3GPP introduced two parallel workstreams in its Release 17 specifications addressing 5G satellite-based mobile broadband and low-complexity IoT use cases:

  • NR-NTN (New Radio NTN) – adapts the 5G NR framework for satellite communications, providing direct mobile broadband services as well as voice using standard apps. This will enable 5G phones operating on dedicated 5G NTN frequencies and existing sub-7GHz terrestrial frequencies to link directly with Release-17 compatible satellites. Release 17 also includes enhancements for satellite backhaul and the inclusion of 80MHz MSS uplink spectrum in L-band (1-2GHz) plus a similar amount of downlink spectrum in S-band (2-4GHz).
  • IoT-NTN – provides satellite support for low-complexity eMTC and NB-IoT devices, which expands the coverage for key use cases such as worldwide asset tracking (for example, air freight, shipping containers and other assets outside cellular coverage). IoT-NTN is designed for low data rate applications such as the transmission of sensor data and text messages.

Release 17 established the NR-NTN and IoT-NTN standards while the upcoming 5G Advanced Release 18 will introduce new capabilities, coverage/mobility enhancements and support for expanded spectrum bands. For example, there are plans to extend the NR-NTN frequency range beyond 10GHz by adding Fixed Satellite Services (FSS) spectrum in the 17.7-20.2GHz band for downlink and 27.5-30.0GHz for uplink.

Satellite IoT

Traditional mobile satellite operators such as Inmarsat, Iridium and Globalstar have been offering M2M/IoT type services for many years targeting various industry verticals, ranging from agriculture, construction and oil and gas to maritime, transportation and utilities. Some of the traditional FSS players, such as AsiaSat, Eutelsat and Intelsat, also offer M2M/IoT services over Ku or Ka bands.

Another player with a long history in satellite communications is San Diego-based chip vendor Qualcomm. The company was a founding partner and key technology provider in Globalstar and also developed satellite-based asset tracking service OmniTRACS. Qualcomm is still heavily involved in the satcom business and earlier this year announced Snapdragon Satellite, its Satellite-to-Phone service. More recently, it announced the availability of two Release 17 compatible GEO/GSO IoT-NTN satellite modems launched in collaboration with US-based Skylo, a NTN connectivity service provider, that enables cellular devices to connect to existing, proprietary satellite networks:

  • Qualcomm 212S Modem – a satellite-only IoT modem designed to enable stationary sensing and monitoring IoT devices to communicate with NTN-based satellites. The chipset is an ultra-low power device and can be powered from solar panels or supercapacitors.
  • Qualcomm 9205S Modem – enables IoT devices to connect to both terrestrial cellular and satellite networks and has integrated GNSS to provide location data. Typical applications include industrial applications requiring always-on, hybrid terrestrial and satellite connectivity for tracking assets such as agricultural machinery, shipping containers, livestock, etc.

Both devices are designed for low-power, cost optimized applications and support the Qualcomm Aware cloud platform, which provides real-time asset tracking and device management in off-grid, remote areas for IoT.

Most of the major chip vendors, such as MediaTek, Qualcomm and Sony Semiconductors, have already developed Release 17 compatible chipsets. This means that satellite-compliant 5G IoT devices could be available commercially by the end of 2023 and should become commonplace in 2024.

NTN Satellite Operators

Only a few NTN-based satellites have been launched to date. A noteworthy example is Spanish LEO operator Sateliot, the first company to deploy satellites complying with 3GPP’s Release 17 IoT-NTN standard. Sateliot currently has two satellites in orbit and recently carried out a successful roaming test between its satellite network and Telefonica’s 5G terrestrial network using an IoT device with a standard SIM card. Sateliot plans to start commercial activities in 2024. Ultimately, the company hopes to launch a total of 250 nanosatellites, which will enable it to offer global 5G IoT-NTN services.

No satellite operator presently supports 3GPP’s Release 17 NR-NTN standard for voice and data. Although AST SpaceMobile and Lynk Global have demonstrated two-way satellite-to-5G terrestrial communications, neither uses the NR-NTN standard, although they have plans to test the NR-NTN standard.

Satellite Déjà Vu?

Over two decades ago, the mobile satellite industry invested billions to launch a number of ground-breaking LEO-based voice and narrowband data constellations. Only a handful survived and even fewer have prospered. Will history repeat itself?

Although there are some parallels, Counterpoint Research believes that there are also some important differences this time. During the past 20 years, satellites have become much smaller, more capable and less expensive. Some of these satellites are based on CubeSat technology, which uses commercial, off-the-shelf (COTS) components, thus drastically reducing costs while accelerating time to market. This is particularly relevant to nanosatellites, many of whom are being developed to target the IoT-NTN market. Another important difference is that launch costs have decreased significantly due to the entry of new private launch companies, notably SpaceX.

Perhaps the most important differentiator between current and next-generation satellites, however, is that the latter will be based on 3GPP’s NTN standards. Historically, proprietary satellite systems have resulted in a limited range of low volume and hence expensive end user devices – a significant barrier to growth. As with 5G (and 4G before it), a common set of cellular-based standards will enable the mobile satellite industry – plus the vertical markets it serves – to benefit from the vast economies of scale of the cellular device ecosystem. This should result in higher volume chipset production, more affordable devices and services and hence a much larger market of end users. For instance, Sateliot estimates that the cost of satellite IoT connectivity will drop from hundreds of dollars per device per month to less than $10 per device per month.

Furthermore, the adoption of 5G NTN and its integration with terrestrial 5G will result in a truly seamless global telecoms network, with increased space segment capacity, resulting in more users benefiting from higher data rate services. This will lead to more applications and use cases thus creating more value-add for vertical market users. Clearly, this could lead to a significant expansion of the mobile satellite services market globally.

Related Posts

NG-LLS Fronthaul Interface – A Pivotal Moment For The 5G RAN Ecosystem?

One of the major challenges to the adoption of open RAN in 5G networks in dense, urban environments is its sub-optimal support for massive MIMO radios. While there are several reasons behind this performance deficit, a key reason is that the O-RAN Alliance 7.2x open fronthaul specification was not originally designed to accommodate massive MIMO radio systems. Recently, the O-RAN Alliance announced a new fronthaul interface specification designed specifically for use with massive MIMO radio systems in dense, high-traffic environments.

This Technology Report provides an objective analysis of the O-RAN Alliance’s Next Generation Lower-Layer Split (LLS) and discusses the implications of the new interface on the adoption of open RAN massive MIMO radios.

Key Takeaway 1: Impact of Incumbents

With the availability of the new NG-LLS fronthaul split, it “appears” that the open RAN community has united around a single specification which will enable open RAN to be adopted in high-traffic urban regions. This should be welcome news as it means that operators will be able to use open RAN technology across all parts of their networks, from rural deployments to dense, high traffic urban environments.  However, the NG-LLS standard has brought major incumbents such as Ericsson and Nokia into the open RAN limelight. While this brings scale and credibility to open RAN in the high-end 5G market, it also raises questions about open RAN’s goal of diversifying the radio supply chain and lowering barriers to smaller vendors.

Key Takeaway 2: Massive MIMO Use Cases Suitable for Split 7.2b

Although Split 7.2b has limitations when deployed in dense, high-traffic urban networks, Counterpoint Research believes that it will continue to be a good choice for other mMIMO use cases. For example, in uses cases with moderate traffic loads, where cell sizes are larger and where end-user mobility is low such as in Fixed Wireless Access applications. Radios based on Split 7.2b will also benefit from reduced complexity and lower costs compared to NG-LLS based radios. In future, the application of advanced AI/ML algorithms in the DU may narrow the performance differential between Split 7.2b and NG-LLS for some use cases.

Counterpoint Research – 5G SA Core Deployments Decelerate in H1 2023

  • In some markets, operators await evidence of successful use cases before switching to 5G SA.
  • In H1 2023, the Asia-Pacific region continued to lead in terms of 5G SA Core deployments.
  • Ericsson led the overall market followed by Nokia, Huawei, ZTE, Samsung, and Mavenir.

Counterpoint Research’s recently published July update of the 5G SA Core Tracker is a culmination of an extensive study of the 5G SA market. It provides details of all operators with 5G SA cores in commercial operation at the end of H1 2023, including market share by region, vendor, and the popular frequency bands for deployments. Apart from that, it touches upon the potential monetization opportunities for telecom operators across different domains and uses cases.

Last year, there was steady growth in the commercial deployment of 5G Standalone (SA), with more than 20 operators moving to 5G standalone core. However, the pace slowed down in H1 2023 with the number of operators launching commercial 5G SA ranging in single digits. The primary reason for the slowdown in commercial deployment of 5G SA was the restraint arising from global macroeconomic factors and the lack of a clear picture of 5G monetization for operators. Although the pace of commercial deployment has slowed down in 2023, operators are working on monetization avenues, and are working on SA-specific use cases, including on-demand network slicing and FWA.

Most of the 5G SA commercial deployments have been in developed economies, and Counterpoint Research expects the next bulk of network rollouts will take place in emerging markets. This will drive the continuing transition from 5G NSA to 5G SA.

Exhibit 1: 5G SA Deployments by Region, H1 20235G SA Commercial Deployments by region

As shown in Exhibit 1, the Asia-Pacific region led the segment, followed by Europe and North America, with the other regions – Middle East and Africa, and Latin America – lagging.

Key Points

Key points discussed in the report include:

  • Operators – 47 operators have deployed 5G SA commercially with many more in the testing and trial phase. Globally, most of the deployments are in developed economies with those in emerging economies lagging. Although the pace of deployment is steady in developed markets, it is progressing slowly in emerging markets, and in some markets, operators are biding their time and looking for evidence of successful use cases before switching from 5G NSA to SA. The ongoing economic headwinds also delayed the commercial deployment of SA, which was seen in H1 2023.
  • Vendors – Ericsson and Nokia lead the 5G SA Core market globally and are benefiting from the geopolitical sanctions on Chinese vendors Huawei and ZTE in some markets. South Korea’s Samsung and Japan’s NEC are mainly focused on their respective domestic markets but are expanding their reach to Tier-2 operators and emerging markets, while emerging vendors Parallel Wireless and Mavenir are working with leading operators in Europe, and Middle East and Africa.
  • Spectrum – Most operators are deploying 5G in mid-band frequencies, n78, as it provides faster speeds and good coverage. Some operators have also launched commercial services in the sub-GHz n28 and mmWave wave n258 bands. FWA seems to be the most popular use case at present but there is a lot of interest in edge services and network slicing as well.
  • Use Cases – Operators are looking for avenues to monetize the 5G services, as they are struggling to make the RoI from their investments in 5G. Although FWA is a promised application for 5G SA monetization, there are many other use cases that operators can look into to increase their RoI, including network slicing, live broadcasting, XR applications, and private networks. Although eMBB is the most widely used 5G use case currently, MNOs need to move to 5G SA to leverage URLLC and mMTC use cases.

Report Overview

Counterpoint Research’s 5G SA Core Tracker, July 2023 provides an overview of the 5G Standalone (SA) market, highlighting the key trends and drivers that are shaping the market, along with details of commercial launches by vendor, region, and frequency band. Additionally, the tracker provides details about the 5G SA vendor ecosystem split into two categories – public operator and private network markets.

Table of Contents:

  • Overview
  • Market Update
  • 5G SA Market Deployments
    • Commercial Deployment by Operators
    • Network Engagements by Region
    • Network Engagements by Deployments Status
    • Leading 5G Core Vendors
    • Mobile Core Vendor Ecosystem
    • 5G Core Vendors Market Landscape
  • Outlook
  • 5G Standalone Use Cases

Background

Counterpoint Technology Market Research is a global research firm specializing in products in the TMT (technology, media and telecom) industry. It services major technology and financial firms with a mix of monthly reports, customized projects and detailed analyses of the mobile and technology markets. Its key analysts are seasoned experts in the high-tech industry.

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