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Mobile Communications September 2019 Viewpoints

Technology Analyst: Michael Gold

Progress toward Software-Defined Radio Standards

Why is this topic significant?

A large gap in 4G and 5G standards has inspired competing industry initiatives that seek to reinvent base-station radio technology.

Description

The dominant standards-development organization for cellular communications, 3GPP, specifies how cellular radios perform. But it plays only a limited role in specifying how to implement the radios, leaving many questions about what hardware resides in 4G and 5G base stations, what radio-related computing capabilities can reside elsewhere (in clouds and near base stations), and how these resources connect (fronthaul). Computers are too slow to calculate the radio-frequency signal that launches from an antenna, but they can take responsibility for a very large portion of the mathematical duties involved (baseband signal processing). The result can reduce the real-estate footprint of a base station and in some cases enable utility-pole-mounted base stations.

Some existing distributed-antenna systems and reduced-complexity base stations rely on local or regional computers for a range of duties, using proprietary fronthaul connections. Radios, computers, and software must be from the same vendor. Recent proprietary radio-access networks (RANs) exploit cloud and edge computers, but each vendor tends to control the aggregate RAN, including its connections, software, and design rules affecting equipment locations.

Most of the world's largest cellular services are united in an effort to produce RANs by mixing and matching radios, computers, and software from different suppliers. Mobile-network operators comprise all of the principal members of the O-RAN Alliance (the O stands for Open), which has published specifications for fronthaul and other communications links within RANs. Many large and small suppliers contribute to the alliance's efforts, including cellular-infrastructure-market leaders Cisco, Ericsson, NEC, Nokia, Samsung, and ZTE.

Similar goals for open-architecture radio designs are part of the mission of the Facebook-led Telecom Infrastructure Project (TIP), which aims to enable the maximum possible use of generic (white-box) hardware and infrastructure-automation software in every aspect of communications, including RANs. Though O-RAN Alliance and TIP favor different RAN technologies, many players participate in both groups. In addition, a new and distinct type of disaggregate RAN is emerging. Rakuten is currently testing its own solution, based on cherry-picking selected vendors' commercial off-the-shelf equipment, software, and managed services (see "Rakuten's Custom Cellular Network" in the September 2019 Viewpoints).

Implications

Many players perceive that using agile technologies will lead to business agility. Service providers could implement base stations consisting of white-box radios and computers, modify cloud-computing resources and managed-service suppliers at will, automate radio operations, and use artificial intelligence to boost radio performance at peak times and cut energy use at other times.

Most players apparently expect that any delays cloud computers and fronthaul networks impose will be manageable. But proprietary, optimized connections enable engineers to reduce delays to a bare minimum, for example, as Huawei uses them. The company appears to be absent from efforts to standardize disaggregate RANS.

Impacts/Disruptions

Financial performance of wireless-infrastructure-equipment specialists is mediocre to poor; Nokia lost money in 2018. Disaggregation of RAN technologies could squeeze the suppliers further, forcing them to sell radios instead of networks. Alternatively, open architectures might change the character of the industry, possibly buoying financial performance to be on par with that of leaders in data communications infrastructure. Cisco Systems, Juniper Networks, and others specialize in highly interoperable data-network switches, yet they enjoy healthy profit margins. Likewise, highly open architectures might be good business for both suppliers and buyers of cellular radios.

Scale of Impact

  • Low
  • Medium
  • High
The scale of impact for this topic is: Medium to High

Time of Impact

  • Now
  • 5 Years
  • 10 Years
  • 15 Years
The time of impact for this topic is: Now to 10 Years

Opportunities in the following industry areas:

Equipment manufacturing, semiconductors, radio-frequency components, smart antennas, software development, machine learning, managed services

Relevant to the following Explorer Technology Areas:

Rakuten's Custom Cellular Network

Why is this topic significant?

A leading e-commerce retailer is now readying a highly automated mobile service for availability in Japan starting in 2019.

Description

In 2018 and 2019, Japan's government assigned spectrum licenses to e-retailer Rakuten, which currently serves as a mobile-virtual-network operator but intends to roll out its own 4G service in 2019 and 5G service in 2020. The company expects the deployment to cost less than half the amount that its competitor NTT DoCoMo plans to invest in infrastructure in the next five years. Rakuten has cherry-picked a very limited set of offerings from each of several vendors and has assigned Nokia the role of integrating hardware and software, most of which Nokia is not supplying. With use of advanced cloud-computing technologies for switching, interconnection, and a virtual radio-access network, Rakuten also expects operations to be extremely efficient, with "an uncommonly small team" to run the network.

Nokia's hardware contribution is largely limited to stripped-down radios that reside at cell sites. Rakuten will concentrate baseband operations of tens of thousands of base stations at 4,000 sites in Japan, where computers from Quanta Cloud Technology will run virtual-radio-access-network software from Altiostar, using microprocessors and field-programmable gate arrays (FPGAs) from Intel. Standards do not specify the interfaces that connect the elements of Rakuten's disaggregate radios.

Tareq Amin, EVP and CTO for Rakuten's mobile-services business unit, had a similar title at Reliance Jio, which initiated service in 2016 with 4G-only technology and is now the world's third-largest cellular carrier, with more than 300 million customers. Amin recently expressed intention to "go global...Japan is just the beginning."

Implications

Rakuten is not alone in its efforts to reengineer infrastructure supply chains, but its initiative marks a milestone toward the goal of transforming the corporate culture of the telecommunications industry. Mobile-communications engineers might ultimately gain the ability that data-communications engineers have enjoyed, namely to build large networks entirely from commercial off-the-shelf equipment.

Impacts/Disruptions

Rakuten was aggressive in rejecting bundled offerings from equipment suppliers, yet on the demand side, the company expects to offer its customers novel bundles involving wireless services, e-commerce, payments, logistics, and streaming media. The company has leading market share for payment systems in Japan, including for its mobile-payments app, Rakuten Pay; its retail-payment smart card, Rakuten Edy; and its credit card, Rakuten Card. In a recent interview, Rakuten's Amin emphasized that the purpose of reengineering mobile-communications infrastructure is to allow creation of innovative services. Automation promises to allow Rakuten to focus on customer experiences rather than stewardship of infrastructure. Rakuten might succeed where Amazon.com failed—namely in binding an m-commerce retail brand with an m-commerce technology platform.

Nokia's willingness to work with nontraditional vendors reflects perceptions of some people in the telecommunications-equipment industry that time could be running out for the world's oligopoly of infrastructure suppliers. But software-defined networking might instead be a catalyst for stalwart vendors to rebalance technology portfolios and acquire small companies. Needs for Intel's FPGAs at 4,000 sites in Rakuten's network raises questions about whether champions of software-defined networking can build networks using only generic equipment. Moreover, remote radio heads at cell sites will continue to perform all of the highest-speed signal processes. Selection of Nokia as primary contractor and key supplier indicates that Rakuten perceived a need for experience. Disaggregate radio architectures might open networks to new possibilities, yet incumbent infrastructure suppliers might still prevail.

Scale of Impact

  • Low
  • Medium
  • High
The scale of impact for this topic is: Medium to High

Time of Impact

  • Now
  • 5 Years
  • 10 Years
  • 15 Years
The time of impact for this topic is: Now to 10 Years

Opportunities in the following industry areas:

Computer equipment, computer networking, cloud-computing software, software-defined networking, software-defined radio

Relevant to the following Explorer Technology Areas: