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Insights Tag: NTT DoCoMo

Qualcomm On Track To Launch Open RAN 5G Macro Base Station Portfolio

Qualcomm is in the midst of developing a suite of open RAN-based 5G infrastructure products. Two years ago, the vendor announced a new line-up of macro base station silicon with a target sampling date of mid-2022. As promised, the company started sampling its new products a few months ago with key customers and partners.

Qualcomm’s Open RAN Macro Portfolio

Qualcomm’s open RAN macro portfolio essentially consists of two products: the QRU 100 radio platform and the X100 RAN accelerator card:

  • QRU 100 Radio Platform – designed for use in 32TRx and 64TRx massive MIMO radios as well as much simpler 4TRx and 8TRx MIMO radios. The QRU 100 radio chip  includes transceivers, Layer-1 Low PHY baseband and beamforming processors and supports advanced cellular features such as RAN sharing, DSS, etc. In the case of mmWave applications, the chip also includes the RF front-end and antenna modules.
  • X100 RAN Accelerator Card – an in-line PCIe-based accelerator card based on the QDU 100 chip, which processes latency sensitive and compute intensive Layer-1 High PHY baseband workloads such as channel coding, demodulation as well as mMIMO processing. This reduces the number of CPU cores required and hence the overall cost of the DU. The X100 card supports all O-RAN Alliance defined baseband function split options (including future options such as 7.3) and operates at sub-6GHz and mmWave frequencies – Exhibit 1(a).

Qualcomm is partnering  with HPE and the X100 card is being tested in the server vendor’s telco-grade ProLiant DL 110 Gen 10 Plus server, which has been optimised for open RAN workloads. The DL100 server is capable of supporting four cards within its 1U server footprint. Qualcomm claims that the card consumes approximately 35W of power when 70% loaded.

The key target markets for the above products will be the public macro MNO market as well as the enterprise private network market.

©Qualcomm, Inc, NTT DoCoMo

Exhibit 1(a) Qualcomm’s X100 Accelerator Card and (b) Qualcomm’s OREC partners and roles

Testing and Validation Schedule

Qualcomm has been providing engineering samples of its hardware to partner vendors, which include Fujitsu, NEC and Mavenir, since around mid-2022. Extensive lab testing will start around the end of 2022 or early 2023 with commercial deployments expected to start towards the end of 2023.

In addition, Qualcomm intends to undergo extensive integration tests with its partners at NTT DoCoMo’s OREC facility in 2023. This will involve testing the X100 card on an Intel-based HPE Proliant server as part of a complete 5G base station solution configured as shown in Exhibit 1(b).

Carrier-Grade Layer-1 Stack

Very few chip vendors offer a production-grade RAN software stack. Instead, they typically offer a reference stack of Layer-1 algorithms. Hardening the Layer-1 stack is both an intensive and extensive process that requires considerable technical expertise and resources.

Traditionally, Qualcomm has provided its small cells SoCs with software, including Layer-1, for the sub-6GHz and mmWave small cells market via its FSM platform. Unlike many of its open RAN rivals, Qualcomm will continue this tradition and offer its own carrier-grade Layer-1 software stack for the QRU100 and X100 card, which can then be customized by the customer. However, this will be an evolutionary process, with features being added according to a calendar of releases and followed by extensive testing and tuning until the required performance and stability is achieved.

Qualcomm’s Role and Partner Ecosystem

Qualcomm’s role in the 5G infrastructure market will be as an open RAN chip solutions provider enabling many new radio OEMs to enter the market as well as supplying some traditional vendors. Qualcomm already dominates the small cells market with its FSM100 (and FSM200) solutions and has developed an impressive list of customers. Clearly, the goal here is to do the same in the macro base station market by offering a range of proven, pre-integrated open RAN-based chip solutions to a wide variety of vendors, thereby gaining market share at the expense of the incumbents. Partners to date include Fujitsu, NEC, Mavenir, Rakuten Symphony and Viettel.

Viewpoint

The open RAN/vRAN story is gaining momentum as major operators such as NTT DoCoMo, Verizon and others slowly transition to fully virtualized networks. Counterpoint Research expects this to accelerate during 2023, driven primarily by operators’ interest in leveraging the benefits of cloud-native architectures – rather than any clear-cut TCO benefits. These benefits include improved network agility, scalability and automation and will enable the introduction of new types of services.

Although the cost/performance differential compared to state-of-the-art, proprietary 5G base stations will persist, operators have an urgent need to introduce innovative new services in order to monetise their 5G networks. Counterpoint Research believes that this need will drive the adoption of disaggregated, virtualized RAN networks and that the benefits and flexibility offered by this type of architecture – for specific use cases such as as low-latency 5G MEC – will likely offset the cost/performance deficit for most operators.

 

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Open RAN: Again A Hot Topic At MWC in 2022

As expected, open RAN turned out to be a hot topic at MWC again this year with around 46 demos of O-RAN technology. On the operator side, there were a number of notable announcements from major legacy operators in Europe as well as NTT DoCoMo in Japan demonstrating continued progress towards more open RAN deployments.

Vodafone: 30% open RAN by 2030

Vodafone recently switched on its first open RAN 5G site, the first such site in the UK and also the first macro open RAN site in the UK.  The base station uses Samsung’s vRAN technology platform including the vendor’s own radios, with Intel Xeon based servers from Dell running a Wind River cloud platform. Capgemini Engineering and Keysight Technologies are providing the testing and acceleration. Vodafone announced that open RAN 4G and 5G antennas will be deployed from mid-2022 once interoperability tests have been completed.

Vodafone reiterated its plans to have 2,500 open RAN sites live by 2027 (the deadline for removing Huawei RAN infrastructure) and claims that 30% of all its European sites will be using open RAN by 2030.

Telefonica: small cell open RAN

Telefonica is the only other European operator to announce a major commitment to deploy open RAN. The Spanish company has announced that it will build out open RAN pilot sites in its core markets of Brazil, Germany, Spain and the UK to around 800 sites and that open RAN will constitute 50% of all new base stations by 2025. At MWC, the operator announced that it had deployed open RAN small cells in Munich, using radios from Airspan Networks, Altiostar’s vRAN software and NEC providing overall integration services. Telefonica plans to use open RAN based technology to provide densification of its 5G network in Germany.

 Orange: 2030 2G/3G switch-off target

Orange has already announced some ambitious goals declaring that all new hardware sourced by Orange in Europe should have open RAN interfaces from 2025 onwards. At MWC, the operator announced that it intends to switch-off its 2G and 3G networks by 2030. This involves phasing out 3G in Europe, except in its domestic market with 2G following by 2030. In France, 2G will be switched off by 2025 and 3G by the end of 2028.

Deutsche Telekom – open RAN mMIMO tests

Deutsche Telekom announced that it has deployed mMIMO radios using the O-RAN fronthaul specification at its O-RAN Town, a small open RAN test deployment outside Berlin. The operator is also the lead company behind a new open RAN testing lab called “i14y” with the aim of accelerating the deployment of open RAN and other disaggregated network architectures.

NTT DoCoMo: OREC and Shared Lab

NTT DoCoMo probably has the longest history of deploying open RAN having deployed the technology in its 4G networks several years ago. It now claims that it has around 10,000 open RAN base station sites as well as being the first operator to launch a commercial open RAN 5G service.

Although not physically present at MWC, NTT DoCoMo provided details of its latest open RAN initiatives, including its open RAN ecosystem (OREC), which currently consists of 13 vendor partners: AMD, Dell, Fujitsu, HPE, Intel, Mavenir, NEC, NTT Data, Nvidia, Qualcomm, Red Hat, VM Ware and Wind River – an interesting cross-section of competing vendors. The company hopes that OREC will accelerate open RAN deployments around the world.

The operator also provided an update on its Shared Lab initiative, essentially a vRAN testbed, which enables different combinations of open RAN components to be tested together. Counterpoint Research believes that NTT DoCoMo probably has more experience of open RAN interoperability testing than any other operator. At MWC, it announced that it was opening up its Shared Lab to other operators across the world. This will eliminate to need for other operators to build their own in-house labs, potentially saving time and money. Interestingly, the facility is available virtually and this was demonstrated at MWC. During 2022, NTT DoCoMo plans to accelerate its Shared Lab activities and is currently in discussions with other operators, notably South Korean operators, including Korea Telecom.

Viewpoint

As the announcements at MWC show, there is an increasing momentum behind open RAN from some of the biggest operators in Europe and Japan, with progress being made in overcoming the key challenges of interoperability testing and integration.

Resolving other challenges, such as performance, i.e. capacity and power consumption issues, will depend upon the availability of new merchant silicon solutions, which will dictate whether mMIMO radios can be used in open RAN networks. Commercial availability (from one vendor, Marvell) is only expected to start at the end of 2022. Although providing a major performance improvement compared to current Intel FlexRAN-based systems,* it remains to be seen how these first-generation, horizontally disaggregated systems compare with the best integrated systems from the likes of Huawei, Ericsson and Nokia. As a result, it is likely that the majority of open RAN deployments will still be non-mMIMO deployments during the next 2-3 years.

In many cases, open RAN deployments will also depend upon the pace of 2G/3G switch-off and the need to avoid disruption to customers as legacy platforms are phased out. Hence the targets set by operators may well be missed. In addition, Counterpoint Research doubts that the cost of open RAN  multi-vendor networks will turn out to be lower than single-vendor networks, as the need for integration and interoperability testing represents significant additional costs. Cheerleaders aside, the mainstream adoption of disaggregated networks will only happen when the operational benefits and flexibility offered by open RAN (and proprietary vRAN alternatives) outweigh and compensate for the hardware, power and system integration costs, while attaining the same high-level of network performance.

*Intel is fighting back – with new initiatives on several fronts, including with Cohere Technologies!

 

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Rakuten and Dish – 2022 Will Be A Critical Year For Greenfield Networks

Rakuten and Dish are pioneering the development of open, cloud-native 5G multi-vendor networks and operate in highly competitive and mature markets. Although with very different backgrounds, both are broadly similarly sized companies with established businesses. Both initially joined the mobile market as MVNOs and are at varying stages of deploying their own network infrastructure. However, there are also many important differences between the two companies, particularly with respect to their network architectures and vendor ecosystems.

Rakuten vs Dish

Rakuten has deployed a 4G network and ultimately intends to migrate all customers to a cloud-native 5G SA network. Dish will deploy a 5G SA core-based network from day 1. Rakuten has developed its own telco cloud with all network functions deployed at its own data centres located at various Rakuten premises. In contrast, Dish is adopting an “off-prem” model with the whole network running on AWS data centres, at least initially.

Rakuten relies mostly on single vendors with a heavy emphasis on its own in-house developed technologies and acquisitions. It also has ambitions to become a telco platform provider generating revenues from its software and technology expertise. Dish has generally adopted a dual-vendor strategy to avoid reliance on a single supplier. Although early days, Dish could conceivably follow Rakuten’s lead in time and similarly launch its own services platform.

Rakuten: Subscribers and Network Coverage

At the end of September, Rakuten Mobile had 5.1 million subscribers, having added just 2 million subscribers during the past 12 months, despite the recent expansion of its 4G network. In a country with a population of over 125 million, this is hardly a huge amount. In contrast, market leader NTT DoCoMo has more than 83 million subscribers.

Management still maintains – probably to alleviate investor concerns – that Rakuten will break even by 2023. It thus has a 12 to 18-month window to dramatically increase subscriber acquisitions. Offering much cheaper tariffs, the company is banking on consumers switching en-masse from bigger rivals, as well as finally being able to hit its 96% network coverage target in early 2022. However, in a largely cost insensitive market and with notoriously fickle consumers, will this be enough to attract sufficient new subscribers? Although the break-even target now apparently includes revenues from its telco software platform Symphony – perhaps a saving grace – management expects losses to be at their worst in the first quarter of 2022 but to improve from Q2 onwards.

In the likely event that Rakuten deviates from its planned 2023 break-even path, it is vital that the company can nevertheless show a substantial ramp up in subscriber acquisition over the next six months to demonstrate that its aggressive loss-leading pricing strategy can work in Japan. Otherwise, there is a danger that investors will start to lose confidence in the company, which may also extend to telco customers at its Symphony business.

                                     © Counterpoint Research, Data Source: Rakuten Group

Exhibit 1:  Rakuten Subscriber Growth

Dish: Network and Service Launch Plans

Against a backdrop of falling pay TV and MVNO subscribers, Dish faces challenges in both its established and new businesses. At its 3Q earnings call, the company reported 10,98 million pay TV subscribers, down 13,000 YoY and 8.77 million mobile subscribers, down 121,000 YoY. Up until now, Dish has been able to blunt the impact of its pay TV subscriber losses with higher prices. However, pricing power cannot last forever.

Dish claims that it will be able to build a fourth nationwide 5G network for $10 billion and plans to launch in its first market – Las Vegas – in early 2022. With regulatory deadlines to provide 70% population coverage by the end of 2023, it is now in a race against time to deploy its 5G network and make the business a success. As with Rakuten, network roll-out will be its biggest challenge initially. While using AWS for its core network may yield cost advantages, putting the entire 5G network in the public cloud is a risky bet, as the recent outages at AWS demonstrate.

Unlike Rakuten, Dish plans initially to target the wholesale and enterprise markets rather than focusing exclusively on the consumer market, where it lacks its rivals’ brand recognition. With its considerable spectrum assets, targeting the wholesale market looks like a no brainer. However, with limited network coverage initially, selling to enterprises will not be easy, plus Dish has no experience of working with enterprises.  Despite its recent ties with AWS, it will be challenging to generate revenues from the enterprise market.

The Endgame – Big Tech Takeover?

Building a commercially successful network from scratch with new, innovative technologies that promise significant cost benefits is easier said than done. Rakuten’s progress to date has revealed a lot of issues and there are lessons here for other aspiring greenfield networks. While the contract award with 1&1 Drillisch demonstrates that there is demand for its technology, this is a business where scale and mindshare are required to be successful. With continued high cash burn and a high credit risk rating, any disappointment on the subscriber front over the next six months could hit investor sentiment as well as impact its ability to expand its Symphony business.

Like Rakuten in Japan, Dish is smaller than its main rivals and may also struggle financially, particularly as it will need to offer substantial discounts to attract customers. Counterpoint Research believes that an eventual takeover by a big tech company such as AWS, Google, Microsoft or even Apple looks the most likely outcome for Dish, while over in Japan, open RAN ambitions by domestic vendors, coupled with national pride, will probably ensure that Rakuten Mobile will survive in some form or other.

 

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