Editor’s Note: With 2015 now upon us, RCR Wireless News has gathered predictions from leading industry analysts and executives on what they expect to see in the new year.
in·flec·tion point (noun)
1. Mathematics: a point of a curve at which a change in the direction of curvature occurs.
2. Business: a time of significant change in a situation; a turning point.
The telecommunications industry isn’t known for taking disruptive steps quickly, but it’s about to. And it will start in 2015.
To give you an example of the lightning speed within which the industry has worked, one need only look at some of the standardization bodies. Global spectrum guidelines are issued by the World Radio Council. WRC-15, to be held in 2015, will decide the agenda for “5G” frequencies in WRC-19, which will be held in 2019. That’s four years’ advance notice for an agenda. The functional separation and interfaces used for most networks is defined by 3GPP. R12 work started in 2013, was completed in 2014, and will result in product in 2015-16 – that’s three to four years from specification start to product. In telecom, we often think in terms of years, vs. weeks or months. But it’s all about to change.
Many carriers have watched over-the-top players produce an endless stream of services – going viral within weeks or months and producing annual sales compound annual growth rates of up to 50%, while the telecom industry as a whole is more in the 1 to 4% range.
This has been known for some time and there have been discussions for years about how to change it. I presented options back in 2007 on this topic many times, and many times since then. But starting in 2015, we will, for the first time, see action start to happen to address the issue. Large carriers are looking at overhauling their networks to move toward more cost-effective and agile cloud-based solutions. It will start with the core, but the RAN is definitely part of the longer term plan as well. Commercial deployments will start on a large scale in 2015. It may be old talk, but it’s new action.
In taking this action, the fundamental architecture of the network will change. But even more challenging is that organizations also need to change, as will the business processes used to support them. And this applies to vendors and carriers alike.
For example, current business models are vertical. A vendor supplies hardware, software and support – for a box. A box could be a digital switch, a packet core or an IP multimedia subsystem call session control function. RFIs, RFPs, contract awards and service -level agreements are all structured this way. The cloud model, however, is horizontal by design. We expect customers to buy hardware, software and support independently, much like layers in a cake, from both old and new vendors, and have even different vendors own the end-to-end SLAs. That subtle nuance implied by going from a vertical to horizontal model is actually not so subtle.
The objectives are lofty, with expectations of significant capital expense and operating expense improvements, and a system that enables agility, in particular, to compete with OTT players. In short, the desire is to have a platform that enables long-term competitiveness both within the telecom industry and with OTT players and, potentially, even with content providers.
On the radio access network side, the same structure is being considered. It is more technically challenging but equally rewarding and disruptive. Imagine base stations running on off-the-shelf hardware, virtualized, in a cloud and co-located with core functions. It was unthinkable only a couple of years ago, but now concept work is underway.
Riding on top of all this is the standardization framework that will be used for these future networks. We used to only look at International Telecom Union and 3GPP for guidance, but now some fundamental work, like the network function virtualization framework for the cloud, comes from the IEEE. The IETF and a host of other bodies are also playing increasingly significant roles. And these bodies do work in weeks and months, so that will pick up the pace of change, too.
2015 prediction: 5G closer to definition
Not to be outdone by the cloud movement, the 5G folks are also progressing toward defining the next generation of access and core technology. Yes, we do say it will take until 2018 for some early phases of 5G to appear at the Korean Winter Olympics, and in 2020 at the Japan Summer Olympics, and maybe even 2022 or more for a true blue, full-fledged 5G system. But it’s being defined now with 2015 being an interesting year for progress.
Why is 5G exciting? Because it will enable cellular to be used for a completely new set of use cases and new industries. With 1 millisecond latency, 10 gigabit per second speed and a focus on extreme reliability, we’ll see cellular used for things like autonomous cars, industrial control, safety systems and thousands of new wearable gadgets and household sensors that all interact with each other. Think of 5G as taking us beyond human connectivity to connecting all things.
The access network will use spectrum from 6 GHz right up to 90 GHz and will require new radio access technologies. Some of these frequencies were confirmed as technically viable in 2014. In 2015, steps will be taken to continue the theoretical work as well as look at practical implementations. In the core network, the cloud architectures being implemented today are presumed as a base for 5G, but will need to evolve to support native Ethernet connectivity, low-latency services and increasingly distributed architectures. We have draft views of how that can be done, and we might expect some parts of that plan firming up in 2015.
These two evolutions – cloud computing and 5G – will change the entire telecommunications landscape. They are a positive and formidable combination. For either or both, if we called 2014 a year of haze with some patches of sky here and there, then we might say that in 2015 some fog will start to lift in certain areas with a few patches of permanent blue and sunshine pouring in. And that’s exciting. It’s never been a better time to be in telecom and to be a CTO – because 2015 will be an inflection point.
