The 5G Landscape August 2020 - Deloitte
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The 5G Landscape August 2020 Telecom Engineering Centre of Excellence (TEE), August 2020
Contents
Section
01 EXECUTIVE SUMMARY
02 5G NETWORKS LANDSCAPE
03 T E C H N O LO G Y T R E N D S & T H E 5 G E CO S YS T E M
04 U S E C A S E S A N D R E A L W O R L D D E P LO Y M E N T
05 HOW CAN WE HELP ?
© Strictly confidential - do not share 2
Executive summary © Strictly confidential - do not share 3
Executive summary
In a rapidly evolving 5G market, we believe the next 3 years to be the most transformative opportunity for
a next-generation connectivity service provider and enterprises
NEXT-GENERATION CONNECTIVITY .. AS HYPERSCALERS THREATEN TO … AGAINST A BACKDROP OF POLITICAL /
FOR ENTERPRISE MARKET… DISRUPT THE 5G MARKET SOCIAL CHANGE IN A CHANGING
VENDOR LANDSCAPE
Strategic importance & timing Convergence at the edge Governments driving Open
Next generation will transform enterprises, 5G use cases are extending Telco networks into the RAN
especially in the next 1-3 years hyperscalers environment
Governments are making funds available
specifically for Open RAN so technology players
can invest on it
A $1 bn market growing at 40% Extending to connectivity Evolving market structure
CAGR to ‘25 solution The current political landscape and resections on
Huawei will likely impact the market share of
5G growth is expected to be fueled by mobile Hyperscalers’ ambition is to control the network
existing network equipment supplier
private networks infrastructure in which their services rely
Network preference Long term ambition to own the Covid-19 will accelerate the
Key barriers to public slice adoption are security, E2E network digital economy
reliability and performance
Hyperscalers strategies involve owning more domains The pandemic has pushed companies to adopt
of the value chain as well as the end customer digital services, which consume network
relationship connectivity resources
© Strictly confidential - do not share 4
What is 5G? © Strictly confidential - do not share 5
Every new generation of connectivity capability enables fundamental process reinvention
The 5G disruption - from Consumer centric towards Industry & Verticals
1G 2G 3G 4G 5G
1980s 1990s 2000s 2010s 2020s
Analog Voice Digital Voice Mobile Broadband Faster/Better 3G Hyper-connectivity
Human-to-Human Voice and SMS, Low-speed 2007: Nokia, Motorola, IP-Based Network, High- Interconnected Devices,
data Siemens, Sony, and Ericsson speed Internet, streaming, Sensors and Systems
US vendors had 80% of APPs
had 67% of global handset
global handsets and US vendors fell to 18% for market; 2010: they had 26%
infrastructure markets handsets and to 40% for Asia accounts for 75% of
infrastructure Meanwhile, iOS and Android mobile devices sold
went from 18% OS market
share in 2009 to 82% in 2012 Huawei is #1 infrastructure
provider
© Strictly confidential - do not share 6
5G – Enables an exciting array of capabilities
Next gen connectivity delivers unique value additions such as Network Slicing, Private Networks, Ultra-
Reliability, Low Latency and High Speed
Enhanced Broad band - eMBB Ultra-Reliable Low Latency Communication - URLLC Massive Machine Type
Promises 20x the speed provided by current Achieves 99.999% availability as an inherent performance requirement Communications - mMTC
4G(LTE) Networks. Facilitating the demand for leading to virtually no dropped connectivity. Enabling highly critical
mMTC technology aims to provide
the coming decennium mission control capabilities
connectivity to a huge number of devices
Remote Process such as sensors that typically transmit and
Control Automation 4G receive only small amount of data
Latency
Self-Driving 5G sporadically and is therefore an enabler for
Smart Grid
Car IoT
Factory
20 Gbit/s Automation
Medical Mission CONNECTED DEVICES PER CELL
Control
Peak data rates for 5G, once 4G: ~50.000
Reliability
fully-deployed 5G: 1 bn
Network Slicing Private Networks
Allows service providers to build virtual end-to-end networks tailored to 5G technology permits organizations to establish self-contained, end-to-end networks
application requirements like low latency for mission control or high tailored for application and guaranteeing cellular grade, local security
capacity for industrial IoT
- 2/2 Matrix
Network Slicing Private Network
Specificity
Mobile Broad Band Communication, Internet
High Capacity 5G Logistic, Manufacturing
Network Public Network Network Slicing
Low Latency Medical, Virtual Reality
Geographically concentrated assets
© Strictly confidential - do not share 7
5G will support a range of Use Cases with different characteristics
…that will provide a disruptive leap forward considering the previous generation of telecommunications
ENHANCED MOBILE MOBILE DATA VOLUME
BROADBAND 10 Tb/s/km2
E2E LATENCY PEAK DATA RATE
1 ms 10 Gb/s
25 ms 5G
10 Gb/s/km2 350 Mbps
RELIABILITY 4G MOBILITY
99.999% 99.990% 500 Km/h
90 days 1 K/Km2
MISSION CRITICAL MASSIVE INTERNET OF
CONTROL THINGS
DEPLOYMENT TIME NUMBER OF IoT DEVICES
90 minutes 1 M/Km2
ENERGY EFFICIENCY
10% of current consumption
© Strictly confidential - do not share 8
5G Networks
Landscape
© Strictly confidential - do not share 9
Status of 5G networks from the MNOs’ point of view
An increasing number of Global Telcos are deploying 5G networks; most deployments are currently non-
Standalone but 37% of MNOs expect to deploy 5G Standalone by 2023
MNOs PoV Vendors PoV Enterprises PoV
5G Investments Worldwide (July 2020)
(According to status of most advanced operator investments)
388 MNOs investing in 5G
388 mobile operators are investing in 5G networks in the form of tests, trials, pilots,
planned and actual deployments
>100 MNOs have deployed 5G technologies
More than 100 mobile operators have announced that they have deployed 3GPP
compliant 5G technology in their networks
84 MNOs have launched commercial 5G services
84 mobile operators in 36 countries/territories have launched one or more 3GPP
compliant commercial retail 5G services
37% of MNOs to begin deploying 5G SA until 2023
37% of mobile operators plan to begin deploying 5G Standalone (SA) within the next
two years, according to an ENEA global survey to 41 MNOs
Launched 5G
Launched 5G Deploying 5G Investing in 5G N/A
With Limitations
Although Telcos have deployed a select number of commercial 5G offers, the transformation is at an early stage; suppliers of solutions such as RUs can support
Telcos in their transformation journey by providing the right precuts for the initial 5G NSA deployment and later evolution to 5G SA
Source: ENEA (2020), GSA Market Snapshot (July 2020), GSMA (2020)
© Strictly confidential - do not share 10The impact of Covid-19 in 5G rollouts (1|2)
The Covid-19 pandemic has rapidly increased traffic demand however it has not translated into additional
revenues; Telcos appear reluctant to commit to further investment until a new normal is reached
MNOs PoV Vendors PoV Enterprises PoV
Covid-19 Impact: Higher traffic demand and lower revenues CAPEX forecasts Pre and Post Covid-19
Due to unlimited data subscriptions, traffic increase did not lead to higher revenues for Telcos. A contraction of CAPEX spending is expected to decrease in 2020 due to Covid-19 but, in 2021, when there
2.5% to 5.7% in service revenues worldwide is expected is more clarity on the pandemic’s evolution, the investment is likely to accelerate
B2C B2B Mobile Digital 400
Video
Annual Mobile network
Source: ABI Research, Analysys Mason
Fixed Fixed Wholesale Economy
Revenue, 2019-2020
CAPEX (USD bn)
Change in Service
300
15
(USD billion)
5 200
-5 100
-15
-25 0
2020: Pre-C19 Forecast
2019 2020 2021 2022 2023 2024 2025
-35 2020: Worst Case Post-Covid Forecast
B2C B2B B2B Fixed Pre Covid-19 Post Covid-19
IoT
Mobile Mobile ICT Wholesale
• Although the Telco industry has been largely unaffected by Covid-19, it has
highlighted the need for MNOs to rapidly build a robust supply chain
Peak Traffic Increase Mobile Data Growth
According to Nokia, weekday peak Vodafone stated that mobile data MNOs will need to adopt technologies that can reinforce their readiness
45% data traffic worldwide increased 45% usage increased 15% across Europe
15% •
against future unexpected events
over its pre-pandemic levels during the first weeks of lockdown
Countries/ Telcos that continued/accelerated 5G deployment Countries/ Telcos that delayed 5G deployment
Telstra, Australia’s largest Telco, accelerated its 5G rollout to further support NW capacity Rogers, Canada’s largest Telco, delayed 5G rollout for marketing purposes,
demands and the economy recovery stating that customers currently have other priorities
© Strictly confidential - do not share 11Status of 5G networks from the vendors’ point of view
Huwaei restrictions has the potential to disrupt the market, however the direction in which the industry
moves is unclear. It might accelerate entry of disruptors or lead to further consolidation
MNOs PoV Vendors PoV Enterprises PoV
5G enabled devices 5G RAN market share forecast in 2023 5G services market size forecast
GSA has identified 317 devices that are 5G enabled, of which Data from April 2019, before the Covid-19 pandemic and the $42 bn market which is expected to grow at c.44%
135 are commercially available (July 2020) ban on Huawei from several countries CAGR to reach c.$250 bn
135 Smartphones (95 commercially available)
Ericsson
300
$256 bn
Others 250
85 CPE devices (indoor & outdoor) CAGR = 43.9%
22,9% 29,6%
200
USD Billions
49 Modules
150 $124 bn
22 Hotspots
22,7%
24,8% 100
Nokia $42 bn
5 Laptops 50
Huawei
0
21 Others (e.g. drones, tablets, TVs)
The ban on Huawei from several countries as well as 2020 2021 2022 2023 2024 2025
China’s response will likely impact the forecast, being
Increasing offers of chipsets for 5G devices, with expected that Huawei will lose a relevant percentage of 5G services is expected to expand aggressively
products commercially available from Hi-Silicon the market share that might be distributed between driven by new and innovative new cases across
(Huawei), Mediatek, Qualcomm, Samsung and Unisoc Ericsson, Nokia or smaller players business verticals
Despite Covid-19 pandemic, during Q1 2020 5G NR comprised between 20% and 40% of the overall RAN market. Strong 5G NR investment, particularly in China
and South Korea, helped the overall RAN market return to year-on-year growth after some contraction the previous quarter.
Source: Dell’Oro, Grand View Research, GSA Report (July 2020), Oxford Economics, Strategy Analytics
© Strictly confidential - do not share 12Current political landscape impact on 5G networks
Amidst the current political landscape and the restrictions on Huawei, governments are reconsidering
network architecture and appear to be increasingly shifting towards Open RAN to break vendor lock-in
MNOs PoV Vendors PoV Enterprises PoV
Huawei’s competitors are the immediate beneficiaries
Political conflicts with China resulted in key countries banning or
There is an opportunity for existing & new players to fill the big gap left and get a piece
restricting Huawei equipment to build new generation networks
of the market share that Huawei will lose with the ban
“USA has tried to dissuade other countries from allowing Huawei to provide
technologies in short tern”
“The United Kingdom has been urged repeatedly by its allies to ban Huawei
from its 5G infrastructure” Telcos might be impacted in several ways
“Australia banned Huawei from providing 5G technology in August of this year”
“India also reported Huawei was banned from participating in 5G trials in the Increased vendor lock-in due to Restriction in deployment models Reduced innovation caused by
fewer market options due to lower diversification lower competition
country”
“Japan would also ban Huawei from future purchases for its upcoming 5G
infrastructure” An opportunity for Open RAN/vRAN
“US senators
“The European Commission (EC) told member states to swiftly make proposed investing mor
e than $1 Billion in
progress on preventing dependency on high risk vendors in 5G networks,
New entrants will increase Policy makers and governments Open RAN technologies
starting with a thorough investigation into each operator’s supply chain. flexibility of choice and help are backing up financially Open and 5G-related
MNOs to bolster their supply RAN and creating opportunity research”
chain resilience for its adoption
Several countries have restricted chinese vendors in their 5G networks and China “retaliated” by awarding larger percentages of its 5G contracts to local companies.
This has polarized the market between the US, where chinese vendors are restricted, and China, where western vendors are restricted
Source: CNN, BBC, Light Reading
© Strictly confidential - do not share 13Status of 5G networks from the enterprises’ point of view (1|2)
As opposed to previous generations of mobile networks, 5G is expected to be driven by vertical industries
and a broad set of use cases is expected to transform both economies and societies
MNOs PoV Vendors PoV Enterprises PoV
Energy & We predict that about a third of the 2020-2025 private 5G Banking &
Materials market will come from the 3 first movers Insurance
Transportation &
Logistics Manufacturing
Consumer
Agriculture
Applications
Public Sector, Transportation &
Manufacturing Education & Logistics
Utilities
Public Sector,
Education & Potential Benefits Across Industries Construction
Utilities
Healthcare Cost savings due Higher efficiency Enhanced Retail
to automation in operations worksite safety
Source: Deloitte TMT Predictions 2020
© Strictly confidential - do not share 14Status of 5G networks from the enterprises’ point of view (2|2)
5G is expected to fuel future industry growth with over $12 trillion expected to be invested to support a
broad set of use cases and spark new era of enhanced digitization
MNOs PoV Vendors PoV Enterprises PoV
5G Market Size by Industry in 2020-2035 (USD billion) 5G Private Network Market Size
More than 12 trillion dollars in sales are expected to be generated by 5000 $4,570 m
global industry applications driven by 5G technology
4000 CAGR = 37.8%
USD Million
Transportation & 3000 $2,406 m
Manufacturing 4687 627 Logistics
2000
Consumer
Applications
2291 609 Banking & Insurance $920 m
1000
Public Sector, 0
Education & Utilities
1508 447 Healthcare
2020 2021 2022 2023 2024 2025
Retail 1198 389 Agriculture $ 500 m > $ 10 bn
Expected total investment in 2020 by 100 Expected investment by 2024 in cellular
Construction 732 330 Energy & Materials companies that began testing 5G mobile equipment and services
Private networks are a key 5G use case for the B2B and B2G market segments and have been gaining traction lately due to the emergence of technology trends
such as automation. In some markets, governments and regulators have been studying the possibility of allocate spectrum specifically for this type of networks
Source: Deloitte TMT Predictions 2020, IHS Markit, Grand View Research
© Strictly confidential - do not share 15Enterprises point of view on next-generation wireless connectivity in 2023
A recent Deloitte survey to understand organizations’ plans to adopt next-generation network uncovered
the majority of respondents expect to undergo a network transformation in the next 1-3 years...
MNOs PoV Vendors PoV Enterprises PoV
Deloitte surveyed 415 business and IT executives responsible for networking at their organizations in Q1 2020. The survey was performed in the US market and 70% of the companies
represented have more than 1 billion US dollars in annual revenue. Percentages may not total 100% due to a small number of “don't know” answers.
> $50m US 50% of the responders plan to invest more than 1.4x more Growth of strategic importance of next-generation wireless
dollars… $50m USD. 22% More than $100m important technologies, such as 5G, to organization’s business success
Effect of next-generation wireless technologies within 3 years:
Most important characteristics for organizations to
realize their objectives with advanced connectivity Say it will transform Say it will transform
74%
Willing to explore
86% their organization 79% new providers
their industry
(Percentage rating each a Top 3 most important)
Performance
Security concerns 56%
63% 62% 46% Challenges for organization’s Concern about backward compatibility 38%
adoption of advanced of advanced Technologies are still too immature 29%
Data Speed Reliability and Resilience Coverage connectivity technologies
Difficulty identifying the right use cases 27%
(Percentage rating each a Top 3 most important)
Unsure of the business value / ROI 27%
Operational
61% 43% 39% Influencers guiding organization’s
next-generation wireless Organization's IT staff 65%
Security Scalability Interoperability networking decisions Technology vendors 42%
(Percentage rating each a Top 3 most Organization's executives 41%
important) Telecom operators 28%
© Strictly confidential - do not share 16Technology trends &
the 5G Ecosystem
© Strictly confidential - do not share 17The technology trends leveraged by 5G
5G is not just another Radio technology, it requires E2E network transformation and enables a new set of
capabilities
mMIMO & Small Cells
The mMIMO system is a radio technology that uses an especially high number of antennas (e.g. 64T64R)
to provide higher channel robustness and throughput. Small cells on the other hand are low power output radio access points
that can be deployed either indoors and outdoors to enable increased network capacity, density and coverage of 5G networks
Open RAN and Open vRAN Edge Computing
The development of hardware and software solutions with open Edge Computing is a network architecture approach that brings computing
standards and APIs leverages the adoption of COTS hardware, which power as close as possible to the data sources (e.g. IoT devices), thus
can lower costs and increase flexibility enabling reduced latency and backhaul bandwidth consumption
Trends
RAN Sharing Automation
RAN sharing involves the partial or complete sharing of the RAN The usage of cost effective and data driven automation powered by AI/ML,
network elements, such as the sites, the network core or even the Open API, data analytics and DevOps, enables a transformation in the way
spectrum, in order to accelerate deployments while reducing costs networks are operated, thus overcoming the complexity added by 5G
Network Slicing and Private 5G Networks
Network slicing is a network architecture approach that enables Telcos to create multiple logically isolated networks on top of a
common physical infrastructure, potentiating customized services. On the other hand, private 5G networks are LANs that use 5G
technologies to create a dedicated network in which the customer has full network control
© Strictly confidential - do not share 18What is Open RAN and why should Telcos consider it?
Open RAN uses COTS HW and standardized SW to support interoperable multi-vendor
Open RAN and
RAN ecosystems, provide CAPEX savings and foster greater innovation Open vRAN
WHY OPEN RAN AND OPEN
Open RAN and Open vRAN
vRAN?
RAN openness enables a software-centric approach based on COTS hardware, Breaks vendor lock-in
potentiating interoperable multi-vendor RAN ecosystems, in which the RU and Greater freedom for Telcos to partner with multiple vendors, enabling
CU/DU solutions deployed by the Telco can be from different suppliers “best in breed” solutions across MNOs value chain
Traditional RAN Cloud RAN Open RAN Open vRAN
Accelerates innovation
Radio Unit Enhanced opportunities for MNOs to deploy innovative products into
their networks, thus strengthen their portfolio
Interface
CU SW Simplified operations
Openness of RAN interfaces potentiates E2E automation through a single
DU SW solution with complete visibility of the network, simplifying operations
CU HW
Cost savings
DU HW
Telcos can generate cost savings through the lower CAPEX expenditure
Multi-Vendor Single-Vendor Virtualized on installing expensive proprietary hardware
Open RAN/vRAN aims to “open” interfaces so the industry can move beyond proprietary E2E solutions provided by a select number of vendors and move towards an open market
of best of breed solutions offered by several vendors. The need for MNOs to deploy new equipment for 5G can be an opportunity that Open RAN/vRAN vendors should explore
© Strictly confidential - do not share 19The Open RAN market (1|2)
Open RAN/vRAN adoption has moved beyond greenfield / developing country deployment
Open RAN and
and is increasingly being implemented in developed and competitive markets Open vRAN
OPEN RAN/vRAN COMMERCIAL DEPLOYMENTS IN OPEN RAN/vRAN
2020 MATURITY
As Open RAN/vRAN continues to gain traction it is approaching a critical phase
of mainstream adoption
Open RAN/vRAN Open RAN/vRAN
deployments
“I believe that in a 5 year horizon, OpenRAN would have failed if it’s
not the dominant architecture on how wireless networks are built”
CEO of Parallel Wireless, Steve Papa
Innovators Early Adopters Mainstream Late Adopters Laggards
Open RAN/vRAN based solutions are approaching the maturity phase in which they are seen as mainstream solutions. Vendors are aiming to consolidate such
position in the market in order to leverage the traction that Open RAN/vRAN has been gaining lately due to the technology and political context
Source: ABI Research, iGR, Mavenir, Mobile World Live
© Strictly confidential - do not share 20The Open RAN market (2|2)
The Open RAN/vRAN market is expected to grow and overtake traditional RAN in both public
Open RAN and
cellular and enterprise & industrial cellular segments over the next decade Open vRAN
REVENUE FORECAST COMPARISON FOR REVENUE FORECAST COMPARISON FOR
PUBLIC ENTERPRISE & INDUSTRIAL CELLULAR
The inflection point between traditional mobile networks and Open RAN/vRAN The inflection point between traditional and Open RAN/vRAN for the
is expected to occur during 2028, with open interfaces and COTS hardware enterprise & industrial cellular segment is anticipated to happen during 2027,
overtaking proprietary solutions one year earlier than in the public cellular segment
60 15
Inflection Point
50
USD Billion
USD Billion
40 10
30 Inflection Point
20 5
10
0 0
2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030
Traditional RAN Open RAN Traditional RAN Open RAN
Although the public cellular segment worth more than the enterprise & industrial segment, the latest is potentially easier to enter due to business verticals being
interested in use cases such as private 5G networks. OEM might have a greater opportunity to grow if it decides to focus on the enterprise & industrial segment
Source: ABI Research
© Strictly confidential - do not share 21What is RAN sharing and why should Telcos consider it for 5G?
RAN sharing involves the partial or complete sharing of the access network elements, such as the RAN Sharing
sites, the network core or even the spectrum
RAN sharing options and benefits for Telcos
Shared RAN Sharing • Active sharing generates majority of savings and allows for
Full Network differentiation
Not shared Passive Sharing Active Sharing Sharing
(GWCN)
– Passive sharing models are already in place and do not
Site Site + Mast MORAN MOCN present a significant change
Core Network – Telcos are not dependent on the RAN to differentiate on
services
Radio Controller
• Full network sharing offers further (saving) opportunities but will
Base Station increase complexity
– A shared dedicated core for mission critical services (e.g.
Site
C2000, military) provides enhanced resilience and
Mast availability
– Core network sharing adds significant (technical)
Spectrum
complexity, including:
CAPEX savings tbd 16% - 35% 33% - 35% 33% - 45% tbd – Lack of service differentiation between MNOs as
the core would provide a single basis for the 5G
OPEX savings tbd 16% - 35% 25% - 33% 30% - 33% tbd
network
Service differentiation + - – Managing risk given MNOs reliance on a single
Technical feasibility + - core network
Open RAN/vRAN can be used to simplify operations and processes associated to active RAN sharing, presenting an opportunity for both Telcos and hardware /
software vendors. OEM Players may take advantage of the potential necessity for RAN equipment adherent to Open RAN/vRAN standards
Source: GSMA, Berec Report Legend: MORAN – Multi-Operator RAN MOCN – Multi-Operator Core Network GWCN – Gateway Core Network
© Strictly confidential - do not share 225G technology ecosystem
The 5G technology ecosystem has the potential to accelerate innovation, leverage Open RAN/vRAN and
create synergies between the different stakeholders to support several 5G related use cases
5G Technology Ecosystem
Hyperscalers
Mobile Network Operators
Hyperscalers are companies,
MNOs are providers of typically platform and cloud
connectivity and are expected to providers, that have an
focus beyond that, 5G value chain, infrastructure designed for
leading to the creation of new horizontal scalability
business models and innovation
Systems Integrators
System integrators are companies
specialized in the process of
integrating the physical and virtual
elements that compose 5G
networks
Equipment Manufacturers
Equipment manufacturers include
all the hardware providers, from
network equipment (e.g. radio
Software Vendors
units) to the end devices (e.g. Software vendors are the
smartphones) companies responsible for
developing, for instance, vRAN
software and the virtualization
platforms
© Strictly confidential - do not share 23Mobile Network Operators: what are they doing?
Several mobile network operators around the world have been deploying solutions that are 5G Mobile Network
oriented and/or based on Open RAN/vRAN technologies Operators
Rakuten has deployed a fully native mobile network in commercial
cloud with open vRAN in Japan
In the land of the rising sun…
Telefónica conducted in 2019 successful open RAN trials in Brazil
…Rakuten launched the world’s largest vRAN and plans to extend it nationwide,
based on 4G
enabling ~40% lower costs when compared to traditional RAN deployments
As one of the founding members of the O-RAN, AT&T conducted Full automation
Internet
+ 4000 cell sites 5G ready
several demos and tests leveraging the alliance’s developments Cloud transport
RAN network
DC Edge DC Core
Verizon has partnered with leading vendors to successfully conduct 182 VNFs E2E Virtualized Infrastructure
vRAN testing as a move to independent hardware solutions Commoditized Hardware
Vodafone has active trials of the Open RAN framework ongoing in
Turkey, Mozambique, DRC, Ireland and UK
In the land of the crescent moon…
DISH is building the first software-defined 5G wireless broadband …by virtue of Parallel Wireless’ ALL G RAN solution, Vodafone Turkey was able to
network in the US, using an open and intelligent RAN architecture.
modernize its legacy network while supporting subscribers on all G technologies
Bharti Airtel deployed Altiostar's Open vRAN solution in several
25 Macrosites 2G 3G 4G
major cities in India
United Internet plans to deploy a nationwide fully virtualized 5G 70K Population Rural and Suburban area
network based on Open RAN technology
Source: Open RAN Policy Coalition
© Strictly confidential - do not share 24Hyperscalers: what is their role in the 5G transformation?
Hyperscalers are driven to modularize the network and push for cloud centricity as they expand Hyperscalers
their data-driven revenue streams through the analysis of dynamic data in motion
There is a symbiotic relationship between hyperscalers and 5G technology, where both rely on
the other to continue to succeed in the market
Hyperscalers need 5G to… 5G needs hyperscalers to…
• Meet their end to end connectivity - Hyperscalers seek to own the end • Create demand – It is the hyperscaler players who will create
user relations across the value chain to deliver the best user experience the new use cases for 5G networks and drive adoption as well
while lowering costs to consumers as customer traffic from those use cases
• Increase data capture to grow – With the increase in connected devices, • Rearchitect the network – Hyperscalers have been building their
hyperscalers are depending on capturing the data from these devices own carrier in the cloud via a global architecture in the 5G
and getting inside the network to manipulate this data in motion network to promote convenience and cost savings
Hyperscalers Market Motivations
Modularization Cloud Centricity New Data Streams
Hyperscalers aim to influence the 5G market Hyperscalers have the goal of using their Hyperscalers seek to capture data from all
to adopt standard APIs in order to potentiate cloud experience and knowledge to bring as connected devices across the supply chain in
modularization, thus providing the potential to many network domains as possible to the order to enable new use cases and deliver an
get greater ownership of the value chain cloud, which could provide them the ability to improved customer experience
deploy their own Telco Cloud
© Strictly confidential - do not share 25Hyperscalers: how can they infuence 5G networks?
Hyperscalers are expected to consider multiple approaches to influence 5G networks for their
Hyperscalers
benefit, from buying influence in key 5G players to coopetition with Telcos (1)
HYPERSCALERS APPROACHES TO INFLUENCE 5G NETWORKS
1. Rearchitect the network core 2. Buy influence in key players
Hyperscalers might leverage their experience and knowledge in Hyperscalers can also make use of their financial capacity to
cloud services and virtualization to transform the core of mobile become major investors in other key 5G players (e.g. Telcos,
networks, re-architecting it to better address 5G requirements hardware and software vendors) to influence the market
and enable new business models Real world: Microsoft has purchased Affirmed Networks to enable
telecommunication companies to deploy and maintain 5G networks via their
Real world: Microsoft has purchased Affirmed Networks to enable
telecommunication companies to deploy and maintain 5G networks via their Azure cloud
Azure cloud Approaches
3. Adjunct connectivity 4. Coopetition with Telcos (1)
Hyperscalers can address connectivity gaps in certain Hyperscalers can partner with Telcos to leverage the knowledge,
geographic areas through investments in satellites, balloons and experience and assets of each other in order to accelerate 5G
fibre cables, among others Standalone deployments and the ability to offer ultra low
Real world: Facebook has partnered with Deutsche Telecom to evaluate latency services through edge computing while competing for
Terragraph, a Facebook’s fixed wireless access solution that enables fibre-like Great potential for OEM to greater ownership of the value chain
speeds. They have deployed this solution as a trial in two towns in Hungary take advantage through edge
Real world: AWS has been collaborating with Verizon, Vodafone, SK Telecom
with promising results computing oriented products and KDDI to develop commercial edge computing services running on Telco’s
5G networks
Approach #4, Coopetition with Telcos, presents great potential for the OEM since it requires Hyperscalers & Telcos to invest in edge computing related equipment
to enable a set of 5G oriented use cases. Nonetheless, market activities on the other mechanisms should also be analyzed to identify possible opportunities
Source: Affirmed Networks, Terragraph (1) Coopetition is a term used to designate cooperation between commercial competitors for their mutual advantage
© Strictly confidential - do not share 26Hyperscalers: why could a coopetition with Telcos work? (1|2)
Hyperscalers & Tech players’ solutions rely heavily on Telcos’ connectivity, therefore paving the way Hyperscalers
for a stronger collaboration between themselves...
Approach #4: Coopetition with Telcos – The Competition Side
R&D INVESTMENT % OF REVENUE COMPETING FOR THE VALUE CHAIN
Hyperscalers & Tech players have greater potential to disrupt the industry and Telcos, Hyperscalers & Tech players are expected to control the infrastructure
offer the web based services that consumers typically seek due to their typically and platforms and continue to rely on each other while competing for greater
higher investment in R&D when compared to Telcos ownership of the value chain
17% 19%
16% Hyperscalers & Tech players might seek to host the 5G network
13% 13% cloud in the future but Telcos will not want to relinquish control of
the core network
8%
Telcos aim to combine their connectivity offer with the web based
1% services requested by customers but Hyperscalers & Tech players
will want to avoid losing market size to Telcos
AT&T Apple Amazon Microsoft Alphabet Ericsson Facebook
Hyperscalers & Tech players are expected to compete with Telcos for greater ownership of the value chain: while Telcos want to offer web based services, a market
controlled by Hyperscalers & Tech layers, these want to gain higher control of the connectivity infrastructure in which their services rely
© Strictly confidential - do not share 27Hyperscalers: why could a coopetition with Telcos work? (2|2)
… since strong partnerships can be fostered to tackle the increasing demand of edge solutions by Hyperscalers
complementing each other gaps
Approach #4: Coopetition with Telcos – The Cooperation Side
HYPERSCALERS & TECH PLAYERS
TELCOS LIMITATIONS
LIMITATIONS
Lack of assets in end user proximity Limited Cloud expertise
Despite having core DCs spread worldwide, have few local Win-Win Telcos can take advantage of the advanced expertise in Cloud
edge DCs and PoPs deployed Situation related technologies and services
Lack of last mile connectivity Long time to market
Require Telcos’ services and expertise in the last mile of Telcos typically have a longer time to market when it requires
connectivity to deliver their services building capabilities outside connectivity
Low field technical support Low experience with AI/ML technologies
Overcome
Do not have a truck roll process in place to address possible Telcos can take advantage of advanced knowledge of AI/ML
limitations by
issues in the physical infrastructure based technologies to improve CX
partnering based on
Limited service deployment
each other core Less know-how on developing applications
Lower levels of experience in direct-to-consumer service capabilities Telcos typically have less know-how on developing web
deployment services and applications
Telcos struggle to build software and cloud infrastructure platforms that compete with Hyperscalers & Tech players but these might want to avoid a high capital
intensity business and owning a large local network footprint, opening the doors to partnerships between them
© Strictly confidential - do not share 28System Integrators: what is their role in 5G?
System Integrators are expected to be involved in 5G network operations due to their experience System Integrators
integrating multi-vendor networks
5G leverages COTS Hardware and NW Virtualization, which can restrict the ability of full-stackers to integrate/operate networks. Thus,
5G System Integrators Role
Telcos might need an SI that can act as an information broker and integrator between competitors in multi-vendor networks
Domains of Opportunity for SIs in 5G How can SIs add value to 5G networks?
Network engineering including OSS/BSS transformation, service assurance, SDN/NFV
Cloud / IoT / AI domain Architecture and deployment planning
SIs are acquiring smaller firms to build scale and capabilities around
technologies that enable enterprises to take advantage of 5G (e.g. Network integration and testing
Accenture made 54 acquisitions from 2016-2018) Managed services, including operations center management and maintenance of
legacy networks
Use case development for industry verticals
Telco applications domain
Sys launched their own suite of telco software products, including
network automation platforms, cloud-native OSS/BSS products, What are SIs’ doing?
network testing labs, and SDN/NFV capabilities
SI - Enterprise SI - Carrier SI - Hyperscaler
(Automation, M2M, 5G infra.) (Network SW / virtualization) (Mobile edge, enterprise cloud)
Open infrastructure domain
Global SIs developed software solutions such as open architectures and 40+ SIs
test frameworks for a disaggregated and open 5G network stack (e.g.
Examples
Jan ’20: Ericsson partnered with Feb ’20: Accenture helps guide Dec ‘19: Similar to Google’s
Capgemini on private networks ServiceNow’s product roadmap MEC partnership strategy, AWS
Wipro partnered with TIP to invest in a 5G MNO reference architecture) due to its global scale, and create telco-specific digital Outposts relies on a network of
enterprise customer base, and workflow solutions to help global SIs for sales and
systems integration capabilities support carriers adoption of implementation at enterprises.
SDN and 5G.
© Strictly confidential - do not share 29Equipment manufacturers and SW vendors: what are they saying?
Even though both equipment manufacturers and software vendors are addressing 5G Equipment Manufacturers
requirements and demand, they have different views on Open RAN/ vRAN & SW Vendors
Top three RAN players on Open RAN/vRAN Key recent activities
• “DT chooses Ericsson for 5G deployment after Ericsson delivers
“…When Open RAN specified radios, basebands and configurations have successful modernization of their 2G/3G/4G networks”
the cost and performance benefits to the level of the integrated solutions • “BT has announced the UK's first live 5G factory installation has
provided by Ericsson today, we need to be the first player providing those been switched on at the Worcestershire 5G Testbed (W5G). A 5G
private network and mobile edge computing infrastructure was
in parallel to our current portfolio.” built using Ericsson equipment, that's now fully managed by BT.”
• “Nokia announced global commercial availability of new 5G SA
industrial-grade private wireless networking solutions, providing a
“Nokia is committed to leading the open mobile future by investing in open roadmap to fulfilling the needs of the most demanding industrial
RAN and cloud RAN solutions with the aim of enabling a robust telecom and manufacturing use cases.”
ecosystem with strong network performance and security.” • “Sandvik Mining and Rock Technology to deploy Nokia 5G SA
private network at its Tampere-based test mine.”
“For Huawei, Open RAN is a distraction for the industry that will only slow • “Rain, South Africa’s data-only mobile network launched its first
down market developments, according to Ryan Ding, the Chinese vendor's 5G SA network in the country. Powered by Huawei, this is the first
commercial standalone 5G network in Africa.”
carrier networks business group president.”
Source: Light Reading, Mobile World Live, Capacity Media
© Strictly confidential - do not share 30Use cases and real
world deployments
© Strictly confidential - do not share 31Current and emerging use cases
The 5G paradigm enables a wide range of use cases that are expected to become available in different
periods over the next decade, depending on standardization and technology requirements
SHORT TERM MID TERM LONG TERM
Present - 2022 2022 - 2026 2026 - 2030
4K/8K HD videos Connected homes Intelligent power distribution system
AR/VR based education and shopping L4 intelligent driving L5 intelligent driving
Mobile HD monitoring Outdoor logistics robots Sophisticated tele-surgery
Logistics Drones Assisted tele-surgery Life scenarios
L2 intelligent driving Commercial vehicle platooning Smart traffic control system
L3 intelligent driving AR/VR immersive entertainment Production scenarios
Agricultural drones Remote maintenance and inspection robots
High speed railways entertainment
The network requirements that should be met in order to enable each one of these use cases must be identified and analyzed so they can be properly addressed
by the players in the 5G ecosystem through innovative solutions and architectures
© Strictly confidential - do not share 32Real world deployment of the 5G use cases
Several 5G related use cases are in trials or have already been deployed around the world thanks to
partnerships between Telcos, tech players and enterprises
Agriculture
Project to investigate how an AI solution enabled by
Energy & Materials 5G can be used to monitor behaviors of cattle and
Remote maintenance of heavy equipment inside a adapt care measures
mine using AR technology, leveraged by 5G
capabilities
Construction
Usage of 5G to detect and alert about
malfunctions and dangerous situations
Consumer Apps
Mixed reality immersive gaming experience
delivered by a ultra-low latency network enabled
Manufacturing
Real time automatic detection of
by 5G
manufacturing malfunctions in factories
enabled by 5G
Retail
Robots that roam the grocery stores checking
for spills and monitoring inventory levels, Healthcare
enabled by 5G Deployment of 5G related technologies to
provide a set of smart health use cases that
improve hospital’s efficiency
Transportation & Logistics
Several 5G related deployments in maritime ports that
increased operational efficiency and enhanced Public Sector, Education & Utilities
worksite safety Project to investigate the technical and commercial
use of 5G network slicing for power grids
Banking & Insurance
Trials of E2E banking solutions using 5G
to enable, for instance, ATMs with face
recognition
© Strictly confidential - do not share 33How can we Help ? © Strictly confidential - do not share 34
Revenue opportunities enabled by 5G
5G opens new business opportunities for both Telcos and business verticals by enabling specialized
services that address specific industries requirements
Opportunities for Telcos Opportunities for Industries
Services tailored to current customers, enabling them to Reduction of operational costs, higher operational efficiency
get a premium ARPU and enhanced safety
1% increase in premium customers can increase revenue Business verticals are expected to invest USD 13.2 trillions
up to 3% in a network slicing scenario according to Nokia in 2035 with 5G related solutions according to IHS Markit
How does 5G
creates revenue Cost savings due to
~ 1% ~ 3%
opportunities for automation
Premium Revenues Telcos and
Higher efficiency in
Industries? operations
In a case with 50 network slices available and 15% of customers
Enhanced worksite
requiring tailored services, revenue can increase up to 46%
safety
5G enables the expansion of traditional businesses to all industries, by potentiating premium services focused on customer requirements,
such as higher network performance, and by addressing business verticals that need a customized NW
Source: IHS Markit, Nokia
© Strictly confidential - do not share 35STEP 1 - 5G Experience Lab - Overview
An Experience Lab – is an immersive experience for your leadership team to align & realize an outside-in
driven perspective on 5G and its impact on your business
The Lab The Approach The Outcome
Get Aligned articulate a single shared
“A 1-2 day workshop ambition of your company
to experience and having 5G as an accelerator
jointly commit to
specific initiatives Aspire & Determine & Get Focused Define your top 5G priorities
and accelerate your Explore Refine
based on your strategic, financial
journey towards the Activate
Future of your Pre-Journey and organizational readiness
organization with 5G
as an accelerator”
Get Moving Prepare for execution by
identifying specific actions
© Strictly confidential - do not share 36
3The 5G Testing Hub Port Of Antwerp – 14 sites covering 150km2
A unique opportunity to start with 5G and benefit from its opportunities
The ecosystem: co-create to develop 5G real-life applications
IMAGINE DELIVER RUN
DEFINE DEEPEN DESIGN BUILD / PROVE LAUNCH, SCALE OPERATE
1 2 3 4 5 6
Business Business Technical Implementation Implementation & Transition to Operations
Requirements Case Requirements Planning Integration
Assessment & Road Assessment
Mapping
Develop and test business
CLIENT
driven 5G use cases
Advise on shaping and realising
Providing country’s
the business potential of 5G
first 5G stand-alone
through real-life and business-
network and devices
critical use cases
© Strictly confidential - do not share 37Future of connectivity with 5G Experience Lab
The 5G Experience lab allows customers to address business challenges leveraging 5G
What is the 5G Lab? Impact of 5G on industries Get Aligned
Articulate a single, shared 5G
The lab is an immersive experience with Strategy, Think of an IoT empowered environment with millions of connectivity ambition
Industry and Network experts at the Deloitte Greenhouse connected devices, where the mobile network needs to
to better understand what 5G is and how can it benefit support faster, more reliable connections while handling
your business; The Lab will help envision the future of growing data demands. 5G will be capable of carrying Get Focused
your industry before converging on the successful use of data to these devices and have matching performance in Define 5G enabled use cases which can
5G by your company; The lab will also focus on beneficial terms of low latency, speed and density to cater to these
help solve your business challenges
use cases which can be implemented in the near term demands
Get Moving
Execute 5G POCs and identify actions to
Lab Approach implement them
• Behavioural science, design thinking, and strategy converge
to help you solve your toughest business challenges
1. Pre-Journey 2. Sense 3. Aspire 4. Decide through interactive lab sessions
• In the most sustainable and innovative building in the world,
• Create a shared • Be inspired and • Determine potential use- • Create a stepping stone our Greenhouse floor offers a unique, fully wireless
understanding of the experience 5G and the cases that can help to your connectivity experience for clients and visitors
objectives and Future of Connectivity address your business strategy
expectations of the 5G • Explore the key trends challenges • Develop an action plan to • We take you out of the ordinary and into a consciously
Lab impacting your industry • Define relevant 5G use- implement defined 5G designed setting
• Design inspiring • Understand key concepts cases and assess their use cases
• We assemble the right mix
experiences with key (e.g. private networks, benefits • Define activities and of high-tech and high-touch ingredients
participants and massive MIMO, MEC) • Create Proof of Concepts responsibilities
stakeholders • Define the impact of 5G • We tie it together with a recipe specially designed to produce
on your industry moments of impact
Amrit Singh Karl Linhart Pedro Sanguinho Maurício Pereira
TMT Networks CoE TMT Networks CoE Telecom Engineering CoE Telecom Engineering CoE
asingh@deloitte.com.au klinhart@deloitte.com.au pesanguinho@deloitte.com.au mauricipereira@deloitte.com.au
© Strictly confidential - do not share 38
38CONTACTS
Pedro Tavares Pedro Sanguinho Mauricio Pereira
TEE Global Operations TEE TEE
Lead 5G&Beyond Lead Network Automation
Deloitte Consulting Deloitte Consulting Deloitte Consulting
Portugal Portugal Portugal
petavares@deloitte.pt pesanguinho@deloitte.com.au mauricipereira@deloitte.com.au
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Global”) and each of its member firms and their affiliated entities are legally separate and independent entities. DTTL does not provide services to clients. Please see
www.deloitte.com/about to learn more.
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