Fierce Network Research Bulletin, Friday, May 10, 2024 The director of the National Science Foundation has harsh words for the nation’s telecommunications companies: “We lost the 5G race.”
But the Next G Game is just beginning, and U.S. companies can win by playing to U.S. strengths, said Sudharman K. Jayaweera, a program director at the National Science Foundation.
“We fall asleep at the wheel and we are lagging behind with 5G technology,” Jayaweera said.
Jayaweera spoke last week at the Linux Foundation Open Networking & Edge (ONE) Summit in San Jose, Calif. (Jayaweera emphasized that he was expressing his own opinions and not speaking officially on behalf of the NSF.)
In addition to carrier delays, Jayaweera said the 5G infrastructure equipment market is dominated by companies such as Huawei and ZTE, with no U.S. vendors with significant market share.
How did foreign companies overtake the US? Jayaweera said heavy investment in research and development led to low-cost, competitive products that won global 5G contracts.
Although U.S. companies have done a lot of good research with funding from the NSF, the Department of Defense, and other agencies, R&D investments in the U.S. have not translated basic research into technology.
Similarly, the US is also lagging behind in true 5G networks, with most of the country’s deployments being non-standalone (NSA) 5G, which doesn’t support 5G’s most advanced features.
Jayaweera said the 5G gap in the US is not only a threat to the telecommunications industry, but also poses a risk to emerging industries that require the advanced performance that can only be delivered by standalone (SA) 5G networks.
In response to a follow-up email query from Fierce Network, Jayaweera said these emerging areas include connected autonomous vehicles and other intelligent transportation, smart factories, training and gaming applications using virtual reality, augmented reality and mixed reality, and robotic remote surgery.
Many of these emerging industries require low-latency performance with high reliability and low jitter, which can primarily be achieved with 5G SA.
Open source RAN can help
An open source, open radio access network (RAN) can play a role in giving the U.S. an edge in Next-G networking.
“Open source can accelerate innovation and drive cost efficiencies,” Jayaweera said. “It can provide an early competitive advantage and give the U.S. the opportunity to build a domestically skilled workforce.”
He added: “This is only going to happen if we make a real concerted effort to grow the skilled workforce here.”
This will require further engagement of universities and research institutes in open source and building local ecosystems that can help develop skilled talent in open source, open RAN and wireless technologies.
Multi-vendor open RAN faces obstacles to adoption in that no single company is responsible for ensuring a multi-vendor implementation works, which presents a big opportunity for systems integrators, Jayaweera said.
However, open RAN alone will not give the U.S. an advantage in 5G or Next-G.
Samsung, Mavenir, NEC, Fujitsu, Rakuten Symphony and Parallel Wireless account for about 97% of the open RAN market share, according to Jayaweera.
Of these, only Mavenir and Parallel Wireless are based in the U.S. These market leaders will face competition from incumbent vendors such as Ericsson and Nokia, with Ericsson already inking a deal to deploy Open RAN on AT&T’s network.
Jayaweera predicts that by 2028, open RAN will account for around 20-30% of the RAN market, with up to 10% of that being multi-vendor.
Assuming 25% of the RAN market will be open RAN by 2028, even if current incumbents claim even half of that, only a small single-digit percentage of the total RAN market will actually be open. “In my view, it’s not going to be a game changer,” Jayaweera said.
Jayaweera said a sole focus on open RAN could hinder efforts to catch up with the 5G race and disrupt incumbents’ market dominance.
What will Next-G look like?
“Perhaps the most interesting and defining feature of next-generation networks is that they will be open and integrated in many ways,” Jayaweera said in an email. Next-generation networks will connect space, air, ground and undersea networks, connecting sensor, computing and communications networks, and will be open and integrated across domains.
These networks will require radios that operate across multiple available bands and are highly spectrum flexible. They will use open standards not only in Open RAN but also in other interface segments. Next-G will be cloud-native and AI-native.
All of this could be in America’s interest because it would play to its strengths, Jayaweera said.
The United States leads in open source and cloud technologies, especially bringing cloud to the edge (both Multi-Access Edge Computing (MEC, formerly Mobile Edge) and in space) and artificial intelligence (AI) and machine learning. The United States also leads in software and IT, power, and spaceflight. All of these areas will be essential for Next-G networking.
Jayaweera said the U.S. is good at developing skilled workers, but it needs to set targets for graduating and training workers in the numbers and fields needed.
Additionally, developing extremely low-power, energy-efficient software-defined radios to power Next-G networks will be a major challenge for the U.S., Jayaweera said.
Is the situation dire or is it still in its early stages?
Are Jayaweera’s insights about the dire state of the U.S. 5G landscape and the bright opportunities of next-gen G compelling? Mostly yes.
Industry analysts agree that non-U.S. vendors dominate the 5G equipment and software market, with Mordor Intelligence analysts explaining that the market is dominated by five major companies — ZTE, Nokia, Cisco Systems, Huawei and Samsung — and only one of them is a U.S. company.
Dell’Oro Group ranks Huawei first in 5G RAN market share with over 30% revenue, followed by Ericsson in second place with 20-30%, then Nokia (less than 20%) and ZTE (over 10%) – none of which are US companies, of course.
In its report, Gartner cited two US-based companies, Mavenir and Microsoft, as “emerging software vendors that are gaining traction with cloud-native solutions and offering unique added value. Both companies are leveraging their strengths and track record in adjacent markets and integrating open source components to deliver more agile solutions.”
Gartner’s commentary complements Jayaweera’s suggestion that U.S. companies can succeed by leveraging American strengths.
These advantages may not last forever: China, for example, is now spending more on AI research than the United States, according to a report from Georgetown University’s Center on Security and Emerging Technologies.
Dell’Oro analyst Stephen Pongratz disagrees with Jayaweera’s pessimistic assessment of the U.S.’s current state of the 5G market (though he cautions that he didn’t see Jayaweera’s presentation), saying in an email to Fierce that 5G deployment is still in its early stages.
“My personal opinion is that the US is in a strong position in the early stages of 5G, but this is really 4G+ and FWA. [fixed wireless access] “It’s a phase,” he said.
“When it comes to connecting machines and rolling out 5G across enterprises and industries, I’m not sure there are any big winners right now. We’re still very early in the journey, and over the next five to 15 years we’ll have a better understanding of the potential efficiency gains and value creation from cellular connectivity.”
Still, the U.S. is lagging behind in 5G SA rollout, according to Dell’Oro analyst Dave Bolan. The analyst firm tracked 50 5G SA enhanced mobile broadband (eMBB) deployments last year, but only two of them were in the U.S., by DISH Wireless and T-Mobile.
Bolan said the company tracked eMBB because those networks are available to anyone, as opposed to the 66 private networks tracked by the Global Mobile Suppliers Association (GSA), most of which are still in the testing phase.
David Lessin, director of ISG ProBenchmark, said 5G SA deployments will likely accelerate in both the US and Europe next year, peaking in 2027, “as with previous mobile generations.”
While the United States is lagging behind in the 5G race, the next generation opens up new areas for global communications leadership. By leveraging our core strengths in open source, cloud computing, AI, and developing a skilled workforce, the United States is positioned to lead the development of next-generation networks.
- According to Gartner, on average, only 48% of AI projects reach production, and it takes eight months to go from AI prototype to production.
- European operators BT, Deutsche Telekom and Vodafone report earnings next week, and Bloomberg Intelligence’s Matthew Bloxham said the carriers have “optimistic” outlooks for 2024.
That’s it for this week. Come back on Friday for the latest issue of the Fierce Network Research Bulletin.
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