Virtualized RAN: 4G/5G Strategies,

Opportunities and Pitfalls

Sponsored by

January 22, 2020

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 Today’s Speakers

Jennifer P. Clark Azhar Sayeed

Principal Analyst Chief Architect, Service Provider

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 Agenda
• Introduction and survey objectives
• Survey demographics
• NFV Functions telcos are virtualizing today – drivers and expectations
• The virtualized RAN
• vRAN 4G and 5G Implementations
• Impact of Container Technology
• Summary Findings
• Audience Q&A

3
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 Virtualized RAN Carrier Survey

Demographics: Type of Service

Provider

▪ Total of 81 responses
34% ▪ 50 Converged, 28 Mobile, 3
MVNO/MVNE with Infrastructure
62%
4%

Mobile operator
MVNO, MVNE with infrastructure
Converged operator (fixed and mobile assets)

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 Demographics - Region

U.S 49.4

Asia/Pacific 19

Central/South America 12.7

Central/Eastern Europe 5.1

Western Europe 5.1

Middle East 3.8

Africa 2.5

Other - Write In 1.3

Canada 1.3

0 10 20 30 40 50 60

Percent

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 Q4 Demographics – Job Function

Network Planning & Engineering 36.7

• 73.4% in Network operations;
R&D or technical strategy 19 Network Planning and
Engineering; R&D or Technical
Network Operations 17.7
Strategy
Corporate management 10.1
• 10% in Corporate
IT, Data Center & Cloud Domain 8.9 Management
Other - Write In 1.3 • Increased representation in
Product Management 1.3
IT, Data Center and Cloud
Domain
Software Design 1.3

Hardware Design 1.3

Finance 1.3

Security Architect 1.3

0 5 10 15 20 25 30 35 40

Percent

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 NFV Today - What Virtual Functions are Telco Implementing?

Question: Which of the following virtual network functions (VNFs) have you deployed in production?
To what percentage of your network?
100% 2.70% 2.70%
2.70% 5.40% 4.10%
1.40% 8.10% 8.10%
8.10% 6.80% 5.40%
90% 10.80% 9.50% 4.10%
17.60% 13.50% 13.50%
80% 12.20%
21.60% 20.30%
20.30%
70%
12.20%
24.30%
60% 24.30% 31.10%
25.70% 25.70%
50% 21.60%

40%

64.90% 100%
30%
52.70%
48.60% 45.90% 75 - 99%
20% 41.90% 40.50% 41.90%
50 - 74%
10% 25 - 49%
0-24%
0%
vRAN vIMS/ vSBC vDNS vEPC vFirewall vCPE SD_WAN
% of respondents (n=74)

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 Horizontal vs Vertical NFV Implementations

60
54.1
Question:
50
Are you implementing, or do
you plan to implement, a
40
horizontal platform (NFV
30 infrastructure supporting
24.3
18.9
multi-vendor VNFs) or vertical
20
solution (integrated, single-
10 vendor) for your network
2.7
infrastructure?
0
No plans Vertical Horizontal Both
% of Respondents

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 What Telcos are Expecting From their NFV Platform
Better customer retention/satisfaction
Reduced Capex/Opex/TCO
Increased revenue
Improved performance
Faster time to market
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• Over 40% of the respondents see
41.90%
benefits across the board…
• Customer retention and user
satisfaction shows low expectations
51.40%
• Lowered CAPEX/OPEX are seen as an
advantage but not the most important
driver
51.40%
• Improved performance is a heavily
favored advantage, 2nd only to faster
73.00% time to market
75.70%
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 What Telcos Care About in Virtualized Infrastructure

Question: Rank these infrastructure attributes in order of importance

scores for each value
• Security is still the boogey
424
399 man – keeping network
professionals up at night
356
323 • “Easy to Manage” is the least
281
important attribute – less
247
important than energy
efficient.
• Are these are still relatively
modest implementations –
rather than multi domain or
multi NFV?

Security Performance Cost efficiency Reliability Energy Easy to

efficiency manage

© 2019 Heavy Reading 10

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 vRAN Virtualization Plans

40
37
• One fifth have already
35 implemented vRAN
30 • Close to 40% more intend to
do so within two years.
25
20.5 20.5
Percent

20

15
11
10 8.2

5
1.4 1.4
0
Already Less than a 1-2 years 2-3 years 3-5 years More than No plans
have year 5 years

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 vRAN Deployments into New vs Existing Infrastructure

Question: Over the next 24 months where will you focus you
virtualization efforts – on existing RAN infrastructure or on new
RAN deployments? • Exclusively New and Mainly
60 New account for 52% of the
50 47.9 responses.
43.8
• Both new and existing
40
suggests that service
Percent

30 providers are not waiting for a

generational change in the
20 equipment.
10 8.2

0
Both existing and new Mainly new RAN Exclusively new RAN
RAN deployments deployments, but deployments for the
some existing RAN near term
infrastructure, as well.

© 2019 Heavy Reading 12

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 AUDIENCE POLL QUESTION 1

Do you expect to implement vRAN solutions in

your… (Check all that apply)

▪ LTE network Y/N

▪ LTE advanced network Y/N
▪ 5G RAN Y/N

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 Barriers to vRAN Deployment

• Product Maturity, ROI, skills

Product maturity lacking (i.e. features,… 52.7 gap and cost are the most
Uncertain ROI 44.6
significant barriers.

Skills gap 41.9

• Notable given the earlier
feedback on product
Prohibitive cost 35.1 performance.
MEC/vRAN Orchestration solutions not stable 31.1 • Fiber and Organizational
Organizational resistance 25.7
Resistance significant
• Moderate concern about
Lack of fiber access network resources 24.3
orchestration.
Not virtualizing RAN 18.9

Not planning for 5G 10.8

0 10 20 30 40 50 60
Percent

© 2019 Heavy Reading 14

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 What Service Providers are expecting in vRAN CAPEX/OPEX Savings

How much of a cost savings, in terms of both CAPEX and OPEX, do you
expect to achieve by moving to a Virtualized RAN, versus deploying an • Service Providers, on average,
appliance-based RAN solution? are hoping to save between
35
10% and 24% on both OPEX
30 and CAPEX
25

20

15

10

0
Less 10 - 25 - 40 - 55 - 70%
than 24% 39% 54% 69% and
10% greater

OPEX CAPEX

© 2019 Heavy Reading 15

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 4G Penetration

Question: What percentage of your mobile network today is 4G and how will these percentages
change in five years?
• The Data Shows the wave of
100% 4G implementations peaking
13.50% 17.60%
in two years, before giving
90%
28.40% way to 5G.
80%
27.00% 20.30%
• But, in fact, the needle is not
70%
moving a lot with 4G.
60% 23.00%
50%
24.30% 31.10%
40% 16.20%
100%
30%
20.30% 75 - 99%
20% 21.60%
27.00% 50 - 74%
10% 25 - 49%
14.90% 10.80%
4.10% 0 - 24%
0%
Today Within Two Years In Five Years

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 5G Penetration

100% 2.70% 5.40%

8.10% 12.20%
90%

13.50% 24.30% • With 5G, we see a well

80% 14.90%
defined move from
few/no implementations
70%

60%
40.50%
to between 50-74%
50%
47.30% implementation, on
40%
75.70%
100%
average.
30%
75 - 99%
20% 23.00% 50 - 74%

10% 23.00% 25 - 49%

9.50% 0 - 24%
0%
Today Within Two Years In Five Years

Question: What percentage of your mobile network today is 5G and how will these percentages change in five years?

© 2019 Heavy Reading 17

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 4G and 5G vRAN Today

Do you have a vRAN today?

• This paints a slightly more
rosey picture than our earlier
VNF slide where we were
asking about degree of
implementation.
• 59% of respondents have
28%
Yes - 4G deployed vRANs
Yes - 5G
41% • 31% in 5G or both 4G & 5G
Yes - 4G and 5G networks.
No
14%
17%

© 2019 Heavy Reading 18

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 Horizontal vs Vertical vRAN

Question: Are you implementing, or do you plan to implement, a horizontal vRAN (NFV infrastructure
supporting multi-vendor VNFs) or vertical solution (integrated, single-vendor) for your virtualized • A third of carriers are
RAN? implementing Horizonal
solutions, only.
• The high percentage for
6% “Both” along with 17% of
respondents responding with
31%
“Vertical” raises some
questions.

47%

17%

Horizontal Vertical Both No plans

© 2019 Heavy Reading 19

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 AUDIENCE POLL QUESTION 2

How critical an issue do you believe a horizontal

versus vertical implementation is for vRAN
implementation? (Mark one)

▪ Critical
▪ Important
▪ Not important
▪ No Opinion

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 Virtualization of 5G RAN
100% 1.40%
7.00%
8.50% 14.10%
90%
12.70%
16.90%
• The responses are ambitious
80%
14.10%
• In two years over 75% of our
70%
respondents plan to have
60%
25% or more of the 5G RAN
33.80%
Deployed to
what % of
virtualized.
50% 56.30% your network?
• In five years 62% of our
40%
100%
respondents with have
73.20% 75 - 99% deployed vRAN to more than
30%
23.90%
50 - 74% half of their network
20% 25 - 49%

0 - 24%
10% 23.90%
14.10%
0%
Today Within Two Years In Five Years

% of respondents (n=71)
© 2019 Heavy Reading 21
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 5G Core and Container Technology

100% 1.40% 1.40%

9.70% 9.70% 16.70%
90%

12.50% 9.70% • Use of container technology in

80%
18.10%
the core network is tracking
70% 5G implementations, in
60%
general.
50%
51.40%
30.60% • Today – the majority of
respondents place themselves
40%
76.40% in the 0-24% category.
30%
100%
75 - 99% • In two years, the majority of
23.60%
20%
50 - 74% respondents will have 25-49%
10%
27.80%
25 - 49% of their 5G core using
11.10%
0 - 24% containers
0%
Today Within Two Years In Five Years • And in 5 years the weight of
% of respondents (n=72)
implementations will have
sifted to 50-74% of sites.
Q19: What percentage of your 5G CORE infrastructure will use container technology in the following time frames?

© 2019 Heavy Reading 22

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 5G RAN and Container Technology

100% 1.40% 1.40%

1.40% 5.70%
7.10% 14.30%
90%
15.70% • 5G RAN container technology
17.10%
80%
20.00% deployment shows more
70% aggressive implementation
60%
than the core with 22 of our
respondents claiming to have
51.40% 27.10%
50% it deployed in 24-49% of their
40% RAN infrastructure today.
72.90% 100%
30% • Other than these early
24.30% 75 - 99%
20%
adoptions – the remaining
50 - 74%
number track very closely to
25.70%
10%
14.30%
25 - 49%
core container deployments.
0 - 24%
0%
Today Within Two Years In Five Years

% of respondents (n=70)

Q21: What percentage of your 5G RAN infrastructure will use container technology in the following time frames?

© 2019 Heavy Reading 23

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 Summary Findings

▪ Cloud Native 5G and vRAN are real and happening

now.
▪ Implementation of vRAN should be see in context with
other technology transitions such 5G and Edge
Compute
▪ Operators are making decisions today on how they are
evolving their infrastructure to cloud native models
▪ Service Providers/Operators need to learn from the
virtualization mistakes of vertical silos and build more
horizontal platforms for cloud native 5G and RAN to
build in agility and flexibility and to avoid vendor lock-in.

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