Ericsson and DT manage 100 Gbps over microwave

A trial of wireless backhaul over microwave jointly conducted by Deutsche Telekom and Ericsson has managed to top the 100 Gbps mark.

Current commercial microwave backhaul rigs only manage a mere 10 Gbps, we’re told, so this is a fairly substantial increase, albeit in a trial environment. This mega-fast data rate was transmitted over a distance of 1.5 kilometres, which isn’t a bad effort. It involved an 8×8 line-of-sight MIMO with cross polarization interference cancellation (of course), using a 2.5 GHz channel bandwidth in the E-band (70/80 GHz).

“This trial signifies the successful establishment of true fiber capacities over the air using microwave,” said Per Narvinger, Head of Product Area Networks at Ericsson. “This means that microwave will be even more relevant for communications service providers in creating redundant networks as a back-up for fiber, or as a way of closing a fiber ring when fiber is not a viable solution. By carrying such high capacities, microwave further establishes itself as a key transport technology, capable of delivering the performance requirements of 5G.”

“Advanced backhaul solutions will be needed to support high data throughput and enhanced customer experience in the 5G era,” said Alex Jinsung Choi, SVP Strategy & Technology Innovation at DT This milestone confirms the feasibility of microwave over millimeter wave spectrum as an important extension of our portfolio of high-capacity, high-performance transport options for the 5G era. In addition, it represents a game changing solution for future fronthauling capabilities.”

The reason microwave backhaul is suddenly a big deal again is that 5G is going to require a lot more base stations than previous generations, partly because it uses higher frequencies with poorer propagation characteristics. Backhauling all of those new sites with fibre will often be expensive and impractical, so if networks can fall back to a decent microwave link when that happens then everyone’s a winner.

Shock Ericsson report concludes 5G is great

5G kit vendor Ericsson has released a report implying it’s a really good idea to buy loads of the stuff it sells.

The report was written by its ConsumerLab and is titled: ‘5G consumer potential – busing the myths around the value of 5G for consumers’. Insisting it’s ‘backed by solid research’, the report seeks to confront the following claimed industry myths:

  1. 5G offers consumers no short-term benefits.
  2. There are no real use cases for 5G, nor is there a price premium on 5G.
  3. Smartphones will be the “silver bullet” for 5G: the magical single solution to delivering fifth-generation services.
  4. Current usage patterns can be used to predict future 5G demand.

Here’s a summary of the myth-busting:

  1. Loads of people reckon mobile broadband speeds aren’t fast enough and expect 5G to improve that, as well as giving them more domestic broadband choice.
  2. Most people are prepared to pay for premium 5G services such as good video streaming and as yet unidentified novel applications.
  3. Smartphones alone are unlikely to drive 5G adoption, but consumers expect the device market to evolve fairly rapidly.
  4. Consumers expect their usage to increase rapidly once they have 5G thanks to video streaming, connected cars and VR/AR.

“Through our research, we have busted four myths about consumers’ views on 5G and answered questions such as whether 5G features will require new types of devices, or whether smartphones will be the silver bullet for 5G,” said Jasmeet Singh Sethi, Head of ConsumerLab, Ericsson Research. “Consumers clearly state that they think smartphones are unlikely to be the sole solution for 5G.”

Here are some charts from the report. The first shows the main consumer expectations of 5G, with new service second only to improved performance. The second show the kinds of new services consumers are most interested in and the third illustrates their willingness to pay for them, with half of all consumers happy to shell out a 20% premium.

Ericsson consumer survey 3

Ericsson consumer survey

Ericsson consumer survey 2

While of course companies don’t tend to publish reports that don’t support their commercial objectives, that doesn’t mean there’s anything wrong with the underlying research. Ericsson is clearly trying to reassure operators that their 5G investments will yield good returns but a lot of this seems to rely on those operators coming up with exciting new services, which they have historically struggled to do.

KPN bans Huawei from its 5G network core

Dutch operator KPN announced it has signed an agreement with Huawei to build the 5G radio network but will only select a western vendor for 5G core.

KPN said it will modernise its mobile network towards 5G, and has adopted a tightened security policy with regard to vendor selection. The company believes that “the mobile core network which from a security point of view is more sensitive”, while the RAN is less so.

As a result, the operator has entered into a preliminary agreement with Huawei to provide the radio access part of the 5G network, but the agreement is adjustable and reversable “to align it with future Dutch government policy.” Meanwhile, the company “plans to select a Western vendor for the construction of the new mobile core network for 5G.”

Jan Kees de Jager, KPN’s CFO, told the media separately that the upgrade will also involve swapping out Huawei equipment from its current core network, according to a report by Reuters. In contrast to what his counterparts in Germany and the UK have claimed, de Jager did not believe switching from Huawei for other vendors would lead to addition cost. Equipment from Nokia, Ericsson and other suppliers would be as affordable as Huawei for the 5G infrastructure, he was reported to tell the media.

“We appreciate KPN’s trust and are honoured by their decision to partner with us for the mobile radio access network modernisation,” said a Huawei spokesperson. “We are committed to support KPN in their ambition to maintain and strengthen their lead in the global telecoms industry.In general, Huawei believes that excluding parties based on geographical origin does not provide a higher level of security. Cyber security can be improved by establishing standards that apply to all parties in the sector. Today, the IT supply chain is highly globalised. Cyber security must therefore be addressed jointly at a global level and suppliers must not be treated differently based on the country of origin.”

KPN is essentially adopting the same policy as the leaked UK government guideline related Huawei’s role in the country’s 5G network: banned from the core but fine to use in the RAN. But precisely because it is adopting the same policy, KPN has to face the same issue raised by Tom Tugenthat MP, chairman of the British parliamentary Foreign Affairs Committee, that it will be very hard to insulate the non-core from the core on 5G network thanks to its virtualisation and software-defined nature.

Additionally, although equipment from different vendors should work together as they all comply with the 3GPP standards, standards do not cover every detail. As Huawei stand staff told Telecoms.com during MWC, there are plenty of discreet innovations vendors can make to optimise the performance of the system if both RAN and core come from the same vendor. So, operators might risk having subprime performance out of the network equipment sourced from different vendors, if not facing downright incompatibility headache.

Nokia laments a weak first quarter

Finnish telecom vendor Nokia reported a disappointing Q1 of flat revenue and expanding loss. The company blamed competition and slow ramp-up of 5G.

Nokia reported a modest 2% net sales growth to reach €5.032 billion over €4.924 billion of Q1 2018, which would be down by 2% on constant currency basis. The gross margin was at 31.3%, down from 36.7% a year ago. The operating loss increased from €336 million (or -6.8% of net sales) to €524 million (-10.4%). Net cash was depleted by more than half from €4.179 billion to €1.991 billion. Earnings per share went from positive €0.02 to negative €0.02.

Nokia Q1 2019

Rajeev Suri, the President and CEO of Nokia, conceded that “Q1 was a weak quarter for Nokia.” Meanwhile, the company believes that its fortunes will improve in the rest of the year, especially in the second half.  “As the year progresses, we expect meaningful topline and margin improvements. 5G revenues are expected to grow sharply, particularly in the second half of the year, driven by our 36 commercial wins to date.”

In addition to the slow start of the year, Suri also saw risks in intensified competition and customers reassessing their investment. He said in the statement that “competitive intensity has slightly increased in certain accounts as some competitors seek to be more commercially aggressive in the early stages of 5G and as some customers reassess their vendors in light of security concerns, creating near-term pressure but longer-term opportunity.”

When looking at the results by business lines, Networks, by far the biggest segment of Nokia’s business, grew by 4%, both Software and Nokia Technologies kept flat, while sales from the Group Common and Other unit (including Alcatel Submarine, Bell Labs, Radio Frequency Systems, etc.) went down by 13%. Geographically, North America, which overtook Europe to become Nokia’s biggest market in the last quarter, fell back to below Europe in Q1 despite registering an impressive 9% year-on-year growth. Europe was largely flat with the sales keeping at €1.5 billion level. Asia Pacific grew by a decent 6% to get closer to the €1 billion mark, but the biggest loss was in Greater China, where the sales plunged by 10%, now only marginally bigger than Middle East & Africa.

To say things have not been going smoothly for Nokia recently would be an understatement. In late March, the company first announced that it had discovered certain “compliance issues” in the Alcatel-Lucent business it acquired years ago which might have “material adverse effect” on its business, causing a rush sell in the financial market, only to retract a couple of hours later to declare those issues would not have materials impact. More recently it was reported that the company has been struggling to fulfil its business contracts in Korea.

This must be a painful moment for the Nokia management and shareholders (it’s shares were down around 9% at time of writing), who have to watch its two major competitors reporting strong results while sitting on its own disappointments. Ericsson has just delivered an encouraging quarter, and Huawei, despite all the headwind, has reported a particularly impressive Q1. As Light Reading, our sister publication, said earlier, Huawei’s woes may not necessarily mean good fortunes for its two main competitors. So far they have not translated into good fortunes for at least one of them.

Comparing the numbers with Ericsson we could see that despite Ericsson’s total sales in Q1 was about 10% smaller than Nokia’s, it was considerably more profitable (gross margin at 38.4% vs. Nokia’s 31.3%), and its operation more efficient (€1.3 billion operating cost vs. Nokia’s €2.1 billion).

These are also the two key aspects the Nokia management are focusing on to turn things around. On the profitability side, Suri said “we will continue to take a balanced view, and are prepared to invest prudently in cases where there is the right longer-term profitability profile.” On the efficiency side, the company is “also progressing well with our previously announced EUR 700 million cost savings program,” Suri said in his statement.

Ericsson rides US 5G wave to another solid quarter

Swedish networking vendor Ericsson served up its third quarter in a row of organic growth, thanks largely to the rollout of 5G by US operators.

Chatting to Telecoms.com on her last earnings call before moving on Helena Norrman, Ericsson’s marketing head, flagged up the organic growth as her highlight. The single biggest reason for this growth is the US 5G rollout, she explained, with Ericsson having added US Cellular to the big four MNOs as part of eight new 5G deal winds since we last checked in with it.

Ericsson Q1 5G deal wins

Other than the sales growth Norrman pointed towards the healthy gross margin of 38% (last quarter was abnormally low thanks to its BSS write-down), strong operating income of SEK 4.9 billion, only 1.6 of which was due to exceptional items such as the sale of half of MediaKind and getting RCom to cough up what it owed. This all contributed to a decent cashflow number, so maybe Ericsson will ramping up its investment a bit more.

Ericsson Q1 table

“For the third consecutive quarter we showed organic sales growth, this quarter by 7%, said CEO Börje Ekholm in his comments accompanying the earnings report. “Growth was mainly driven by North America. Our strategy, to work with lead customers in lead markets, is generating both 5G business and hands-on experience in 5G rollout and commercialization. To date we have publicly announced commercial 5G deals with 18 named operator customers, which, at the moment, is more than any other vendor.

“5G services, including mobility, have been launched in South Korea and North America. While Switzerland has released spectrum allowing Swisscom to offer commercial 5G services, using our equipment, the development in other parts of Europe is considerably slower primarily due to lack of spectrum, poor investment climate and additional uncertainties related to future vendor market access.”

Ericsson Q1 segments

Ericsson announced the Swisscom 5G switch-on in a separate press release and the only fly in the ointment from this set of results is the near conclusion of the investigation Ericsson has been under in the US for several years.

As previously disclosed, we have been voluntarily cooperating since 2013 with an investigation by the United States Securities and Exchange Commission (SEC) and, since 2015, with an investigation by the United States Department of Justice (DOJ) into Ericsson’s compliance with the U.S. Foreign Corrupt Practices Act (FCPA),” said Ekholm

“We continue to cooperate with the SEC and the DOJ, and have recently begun settlement discussions. These discussions are in a very early stage and therefore we are not able to estimate their length. Further, as this is an ongoing legal matter we cannot provide any detail. However, based on the current status of the discussions it is our assessment that the resolution of these matters will result in material financial and other measures, the magnitude and impact of which cannot be reliably estimated or ascertained at this time.”

This wasn’t enough to prevent a manor spike in Ericsson’s share price, which was up 3% at time of writing. Ericsson should be careful not to over-rely on the US RAN gravy train, however, as that will run out of steam eventually and it had trouble recovering when the same thing happened in the 4G cycle. Getting Digital and Managed Services to contribute more to growth will be key.

Huawei forecast to have narrow advantage in 5G RAN race

Analyst firm Strategy Analytics has taken a look at the runners and riders in the global 5G race and has Huawei ahead of its rivals by a nose.

In a report titled ‘Comparison and 2023 5G Global Market Potential for leading 5G RAN Vendors – Ericsson, Huawei and Nokia’, SA took a look at the relative competitiveness of the big three kit vendors when it comes to 5G radio access network kit and made some market share forecasts accordingly.

The long and short of it, as you can see in the first table below, is that SA reckons by 2023 Huawei will account for around a quarter of the 5G RAN market, while Ericsson and Nokia will have closer to 23%. On top of that the ‘others’, largely Samsung and ZTE, will account for almost 30% between them, which is a decent effort. Samsung seems to be doing especially well in South Korea, funnily enough.

SA 5G RAN chart

“By 2023 5G looks to be a very competitive global market as this premium technology finally achieves economies of scale that will drive down the costs per Gigabyte of throughput to make 5G an affordable technology on a global basis,” said Phil Kendall of SA. “The neck and neck battle between Huawei, Ericsson and Nokia for share of 2023’s 5G radio access should lower costs for all segments of mobile, IoT and fixed 5G applications, even as smaller new vendors find specific niches below these three.”

The report also digs down into the strengths and weaknesses of the big three vendors. Specifically it looks at five broad categories: R&D, patents, product portfolio, product performance and deployment support. The bad news for the Nordic vendors is that Huawei comes top in all five categories, only having to share that spot with the other in the case of product portfolio. It looks like Ericsson needs to start putting its hand in its pocket and Nokia wants to take on a few more engineers.

SA 5G RAN comparison

“R&D investment backed by market scale is the most crucial factor for the long term competitiveness of 5G infrastructure vendors,” said SA’s Guang Yang. “Huawei has maintained steady growth in its 5G R&D investment, which bodes well for long term advances in energy efficient, cost effective 5G technology.”

With all that in mind it’s kind of surprising SA doesn’t anticipate a bigger lead for Huawei in four years’ time. The reason, presumably, is that Huawei will be excluded from a bunch of markets thanks to all the US aggro it faces. Opinion seems to be divided about how much slack will be picked up by Chinese sales, with Huawei revealing it has yet to do any 5G deals in mainland China, but the analyst in the video below still seeing that country as a big competitive advantage for them.

 

Ericsson gets some commercial 5G work from KT

Korean operator KT is buying a bunch of 5G NR kit and software to help it launch 5G commercially in a few weeks’ time.

It has been a decent week for Ericsson’s 5G sales team, with TDC in Denmark also signing on the dotted line. This latest win is the first commercial deal resulting from Ericsson being chosen as a 5G supplier late last year. They’ve presumably been working on this for a while, since the launch is so imminent, but KT only just gave Ericsson the green light to go public about it.

“Having worked successfully with Ericsson on 4G LTE, we are pleased to continue that partnership to make our 5G ambitions a reality with Ericsson’s leading 5G technology,” said Jinho Choi, VP of Access Network Design at KT. “By taking a global lead to enable nationwide commercial 5G services through commercially available 5G smartphones, KT is demonstrating our commitment to our customers and showing how we can drive a global 5G ecosystem where Korea plays a key role.”

“We’ve worked with KT for many years to bring the very best mobile user experiences to its customers,” said Patrick Johansson, Head of Ericsson Korea. “Notably on 5G, we worked closely together to show the world what 5G could do during a major global winter sports event in 2018. With 5G we aim to help KT to take their customers’ experiences to new levels, whether through enhanced mobile broadband for mobile subscribers, or helping to make national and global IoT and Industry 4.0 opportunities a reality for enterprises and industries.”

Specifically this gig concerns KT’s 3.5 GHz Non-Standalone (NSA) network. Korea is set to be the first country to offer some form of 5G nationwide on a commercial basis, although how many people will be able to make use of 3.5 GHz spectrum remains to be seen. In practice this is likely to be a Seoul thing, but it’s nonetheless an additional win for Ericsson to be associated with it.

Ericsson wins TDC 5G gig

Danish operator TDC has chosen Ericsson to help it build and maintain its 5G network.

The deal involves Ericsson’s 5G platform, supported by its Operations Engine, as support system that’s heavy on the AI and automation. The resulting network is heavy on the buzzwords, with lofty talk of industry 4.0 and Digital Denmark. They’re not planning to waste any time, with pilot testing due to take place later this year and full nationwide commercial rollout by the end of 2020.

Allison Kirkby, President and CEO, TDC Group, says: “I am truly excited that TDC will now start to build the infrastructure of the future in partnership with Ericsson, and enable a Digital Denmark with the best nationwide wireless network,” said Allison Kirkby, CEO of TDC. “5G will bring a step change in capacity, internet speed and intelligent connectivity – in other words – 5G will empower a new era for the digital economy and will allow Denmark to build on its position as a global digital frontrunner.”

“TDC becomes the latest service provider in Europe that we will switch on 5G for,” said Ericsson boss Börje Ekholm. “We are delighted to partner with TDC not just in 5G radio and core, but in related R&D and innovation, and the absolute latest in managed services through Ericsson Operations Engine. We will work with TDC to digitalize the Danish economy to ensure Danish consumers, enterprises and society benefit from the new experiences, services, and capabilities enabled by 5G.”

Ericsson has restructured its managed services business to focus on supporting networking kit business and this seems to be a classic example of the kind of thing it has in mind. The managed service contract with TDC will last five years and is so intimate that 100 TDC networking experts will be transferred to Ericsson.

RCom boss opts to pay Ericsson bill rather than go to prison

Indian telco Reliance Communications owed kit vendor Ericsson millions of dollars but didn’t feel like paying up. The threat of jail time seems to have changed its mind.

At the start of the year Ericsson requested RCom Chairman Anil Ambani be locked up unless his company settles its debts but a couple of months later it still hadn’t coughed up. The Indian court gave him until 19 March to find the cash and now, with one day to spare, it’s being widely reported that Ambani managed to scrape together enough shrapnel to remain a free man.

The precise amount handed over was 462 crore rupees, which we’re going to take Reuters’ word for that being equivalent to around $67 million because we can’t get our head around India’s number system. That still seems to leave $10 million or so outstanding, but is presumably enough to placate the Indian courts for now.

Had he not paid Ericsson Ambani would have been held in contempt of court because it had been judged that he had the cash handy, but just felt like holding onto it. We’ve all felt that from time to time and, if we’re honest, sometimes it’s only the law that keeps us honest. RCom’s shares were down 9% at time of writing and are trading at around the quarter of their price a year ago.

Huawei CEO tries to deflect cybersecurity spotlight onto Ericsson and Cisco

It was just a matter of time before Huawei played the whataboutism card and Founder/CEO Ren Zhengfei couldn’t resist in a recent interview.

Chatting to CNN in Shenzhen Ren said the following when referring to the US ban on Huawei gear: “They have to have evidence. Everybody in the world is talking about cyber security and they are singling out Huawei. What about Ericsson, what about Cisco, don’t they have cybersecurity issues? Why has Huawei been singled out? There’s no Huawei equipment in the US networks but has that made the US networks totally safe? If not how can they tell other countries that your networks will be safe without Huawei?”

When Huawei announced its lawsuit against the US government we figured it would have a pop at Cisco sooner or later, but Ren decided to involve Ericsson for good measure (but not Nokia). He has a bit of a point, we suppose, but there are a couple of flaws in this fallacious approach. Firstly, if he thinks any other vendors might be a security risk then he is subject to the same burden of proof he is applying to the US. Secondly, even if they are dodgy that doesn’t mean Huawei isn’t.

The main theme of this resumption of the Ren roadshow was to augment the points Huawei made when in its lawsuit. Ren stressed he would rather shut the company down than let the Chinese state muck about with it and said US tactics will result in scaring away investment in the country. He also tried playing the martyr card, insisting that what doesn’t kill Huawei will make it stronger and even suggesting this aggro represents a timely wake-upcall for complacent Huawei employees.

Ren’s media tour coincides with parallel attempts to win hearts and minds among US allies, but it looks like those are being trumped by a more direct approach from the US. A recent report from Bloomberg reveals German spooks think Huawei is just too dodgy to be allowed into the country’s 5G networks.

Apparently the German intelligence officials remain unconvinced by Ren’s vows never to collaborate with the Chinese state and are also worried about upsetting the US. “It’s above all a matter of trustworthiness and of the impact on our relationship with our allies,” a Foreign Ministry official told some parliamentary committee.

On top of that the EU has recently been publicly expressing concerns about Chinese 5G kit in general so, for the time being at least, momentum seems to have swung back in US favour. Ren’s attempt to metastasise the aggro to other networking vendors must be causing some alarm, not least because it raises the prospect of them being caught in the orbit of the law suit. If we’re on a Huawei to hell, we’re taking you with us, seems to be the message.