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    What’s in Store for Telcos, Mobile Edge Cloud, 5G in 2020

    By
    CHRIS PREIMESBERGER
    -
    March 12, 2020
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      Telcos.

      Historically, the telecommunications industry has centered around three main hardware suppliers: Nokia (Finland), Ericsson (Sweden) and Huawei (China), with little investment in actual telco infrastructure during the past 10 years. According to a recent blog post by Qualcomm Ventures: “Venture capital (VC) firms and startups typically avoid wireless network infrastructure investments.”

      But thanks to 5G, this old rule of thumb is undergoing tremendous change. Qualcomm, in fact, just announced the launch of the Qualcomm Ventures 5G Ecosystem Fund to invest up to an aggregate of $200 million in companies building its 5G ecosystem.

      During the past year, the industry has seen a frenzy in the 5G start-up investment front, with companies such as Mavenir Networks seeing funding rounds totaling $105.3 million, Affirmed Networks achieving total funding at $155 million, Altiostar raising $357.5 million and several others.

      Startups now in a good position for success

      Startups that are addressing existing brownfield challenges in the industry are also seeing an uptick. For example, Parallel Wireless, having raised $8.8 million, builds every component of the cellular network through its evolution from 2G, 3G to 4G.

      With this disruption of the old telco model now unfolding, what are the key technology and investment trends? Here are 10 that we are either seeing now or expect to emerge in the next six months to a year.

      Our professional resource for this eWEEK Data Points article is Rajeev Madhavan, a founder and General Partner of Clear Ventures, where he focuses on early-stage technology investments. 

      Data Point No. 1: The move to a highly distributed infrastructure with numerous industry players will necessitate new virtualized, cloud-native systems to support it.

      With the move from an antenna-based system to a cloud-based system, now many more x86 boxes can be put under the antenna structure using an edge-cloud based system. Each antenna will contain thousands of mobile edge cloud centers.

      Data Point No. 2: Open source software will take the lead.

      By using Open RAN technology, U.S. telecommunications companies will get to 5G faster and more cheaply than they could via the old monolithic telco model of the past. O-RAN will allow a transition from the proprietary, vertically integrated, hardware model of the big three RAN equipment makers to a software-defined mobile network based on virtualization of the functions contained in the black boxes of old. Open interfaces will allow both small and large network operators to customize their own services without being beholden to the proprietary hardware suppliers.

      Data Point No. 3: As the industry moves to 5G, the age of human operators to deploy, optimize and operate the network and the complex set of software and end applications is no longer practical.

      Using O-RAN technology allows for AI-driven automation to completely reduce the amount of manual maintenance that is required. This AI revolution is now and will continue to play a significant role in reducing maintenance costs for telcos.

      Data Point No. 4: The monolithic-oriented legacy telco players will be faced with increasing pressure to keep up.

      These players could likely jump on the opportunity to build 5G on an Open RAN paradigm. If they don’t, they might see themselves leapfrogged like the Indian telcos of the past had been by Reliance Jio, which came into the market only a few years ago and said they wouldn’t support 2G or 3G.

      Data Point No. 5: The innovation taking place now in 5G will create new opportunities for greenfield telco operators–such as Rakuten in Japan–to enter and disrupt the space.

      In the U.S., DISH Network with its spectrum allocation from the T-Mobile/Sprint Merger agreements can enter the space and provide a much more cost-effective network. Similarly, the same innovation has been applied to telcos’ brownfield challenges. For example, Parallel Wireless brought Open RAN solutions to 4G and on down to 2G and is now doing the same with a 5G RAN based cloud-native architecture.

      Data Point No. 6: U.S. investment in 5G will necessitate a paradigm shift across the U.S., Europe and the world.

      With U.S. congressmen and women lobbying to subsidize our nation’s 5G rollout with more than $1 billion in funding, thanks to a recent bipartisan bill that was introduced in the Senate, U.S. development is set to at least keep up if not exceed China’s development. This investment will also be the catalyst to move the needle in the U.S.’s direction.

      Data Point No. 7: Growing concerns about privacy will further drive a more distributed model.  

      As a result of these privacy concerns, we’ll see a shift away from Huawei as well as other European players and the move toward U.S. players and other start-ups in Asia and across the world.

      Data Point No. 8: Mobile edge cloud will enable continuous innovation.

      This will open the door to an even wider playing field for consumers. From powering autonomous driving vehicles to streaming data across continents to deploying robots in use cases ranging from the smart home to manufacturing, and more, technology that improves how we live will be more quickly and easily accessible than ever before.

      Data Point No. 9: Using software for automating deployment, scaling and lifecycle management of Telco applications like O-RAN will change the way cell sites are deployed.

      By being able to run multiple instances of RAN Software, whereby each unit gets its own application pipeline, it dramatically changes the game, enabling cell sites to be deployed within a day. Managed private 5G mobile edge and regional data centers that use Kubernetes are increasingly gaining traction. As Kubernetes evolves, the ability to manage business applications via mobile edge RAN along with on-prem managed 5G offerings are also evolving.

      Data Point No. 10: Virtualization, automation and containerization solutions from startups will replace the telco black boxes with full network transparency.

      This will also create much more visibility, which will enable a higher level of security than ever before for telcos and their customers.

      If you have a suggestion for an eWEEK Data Points article, email [email protected].

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